Financial Planning and Long-Term Saving Guide

5 Fixes for Money Worries

These smart, simple suggestions will help you keep calm about your finances―and stay above water.

By Lesley Alderman
Illustration of a woman chained to a dollar sign with her head above water Heads of State

Stress less, starting now. If you could rewind your thoughts from a recent sleepless night, they might play back like this: Worry about money…wonder what you’re making for the bake sale…worry about money…remember to wish your coworker a happy birthday…worry about―you guessed it. In these challenging times, money worries are never far from any of our minds. What makes matters worse is that most people have a “recency bias, which leads them to feel that the future will be no different from the recent past, which in this case was not so great,” says Gary Belsky, coauthor of Why Smart People Make Big Money Mistakes and How to Correct Them ($14, amazon.com). How do you stop that negative cycle of worry and feel hopeful again? (Without winning the Powerball, that is.) Start by discerning between irrational worries that you can set aside and valid concerns that warrant action. Below, you’re bound to find at least one idea that shores up your pocketbook and eases your mind.
 
The worry: If I get laid off, there’s no way I'll survive financially.
The fix: You’ve probably heard that you should have three to six months’ worth of living expenses stashed away in an emergency fund―which, for most of us, is a daunting task. But here’s what you may not know about that old chestnut: “This guideline does not mean enough money to live at your current standard,” says Manisha Thakor, coauthor of On My Own Two Feet ($13, amazon.com). “Those savings need to cover only the essentials―your mortgage or rent, car expenses, utility bills, food, medicine, health insurance, and debt payments.” Even better news: If you are eligible for unemployment after getting laid off, a three-month emergency fund should be enough. So once your savings are on track, relax. (We mean it.) Nest egg not as large as it should be? Reducing your spending will calm your worries, says Richard Sacket, a New York City psychologist who specializes in stress management. Take a look at everything―yes, every single thing―you spend money on in a month, suggests Thakor. Then eliminate anything discretionary that doesn’t bring you joy, like those pay channels you never watch. Your savings will add up, and you won’t even miss what you got rid of.

 
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