10 Ways to Reduce Money Stress

Money expert Laura D. Adams shares her tips

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Evaluate Your Financial Situation

Start to deal with money stress by thoroughly understanding the ins and outs of your financial situation. If this is a daunting prospect, consider meeting with a fee-only financial advisor. You want someone who can look at your situation objectively and set up a specific money plan to help you achieve long-term goals, says money expert Laura D. Adams. Sites like GarrettPlanningNetwork.com can point you toward someone you can trust.

 

Click here to visit GarrettPlanningNetwork.com

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Recruit Support

If you don't know how to figure out your long-term goals, a financial life coach might be able to help. These advisors work with you to identify your values and dreams, and then get them in line with your resources. A coach can also help you earn more money or stick to a budget. Coaching is not regulated, so choose carefully.

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Track Your Expenses

Web sites like Mint.com are an effective and safe way of getting a good picture of your finances. It takes about five minutes to sign up on Mint.com and input your account information, and then you can track your spending for free. The site automatically pulls information from your accounts, then charts it into easy-to-understand tables. From there, you can visualize your spending habits and set clear goals.

 

Click here to visit Mint.com or download the app here

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For the Pen and Paper Type

Prefer jotting things down? Bill organizers will help keep your bills and receipts together in one easy-to-carry notebook. Never miss a due date or overdraw your account because you got your numbers mixed up.

 

Click here to purchase a bill organizer from AllBrightIdeas.com

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Take Advantage of Online Banking

Use direct deposit to automatically divide your income amongst your checking and savings accounts. Set up alerts to be sent to your phone when you dip below a certain limit and easily transfer money in a single text message.

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Avoid Credit Card Traps

By co-signing a card, you are responsible for that person’s debt even if she dies. Avoid this by assigning authorized users to your card instead. While you’re still responsible for a user’s charges, you can set her credit limit or drop her from your account at any time.

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Eliminate Bad Debt

Adams describes the difference between good debt and bad debt in her book, Money Girl's Smart Moves to Grow Rich. Good debt, like a home mortgage, allows you to make money over time, while bad debt (like an auto loan) causes you to lose money. Prioritize eliminating bad debt based on interest rates and the length of the loan.

 

 

Click here to buy Money Girl's Smart Moves to Grow Rich on Amazon.com

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Understand Your Credit Score

This number determines how expensive it is for us to borrow money—but many people don’t understand the factors that go into determining the score. Here, Adams breaks down the math:

 

Payment history: 35%

Accounts owed: 30%

Length of credit history: 15%

New credit: 10%

Types of credit used: 10%

Protect Your Income

Another common source of financial stress is not having enough money. A good way to combat this is by taking steps to make sure your job is as secure as possible. Shine at work—and ask for a raise.

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Have a Cash Cushion

A cash emergency fund will help you avoid turning to expensive credit cards in times of financial crisis, like needing to pay a bigger-than-expected medical bill. Adams suggests maintaining at least six months to a year’s worth of expenses (depending on your job stability and family situation) in a fully liquid, FDIC-insured account.

 

Click here to visit Laura D. Adams' Web site

 

Click here to read Need Extra Cash? Try This

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First Published February 8, 2011

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