If money is the universal language, then you definitely want to speak it fluently. But to master the most important verbs — like “budget,” “save” and “invest” — you first need to get comfortable with the basics of money management.
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Learning the fundamentals of managing your money — from building a workable budget to understanding essential personal finance concepts — will help you feel less overwhelmed and more confident about your financial future. Think of it like learning any language: Before you can dazzle a crowd, you have to master the basics.
If you’re feeling stressed about money now, these five habits will help you gain control and reduce that stress.
1. Understand Your Relationship With Money
The idea of a “relationship with money” may seem odd — after all, don’t you simply want more of it? Not so fast. The messages you received about money growing up can continue to shape how you think about it, spend it and save it — or don’t.
If you watched your parents play fast and loose with their finances, you might have adopted the same approach. Or perhaps you veered in the opposite direction, becoming so tight-fisted with your funds that you avoid even productive risks, like investing. Maybe your household had very gendered expectations about who earned and managed the money, and you’ve internalized these roles more than you realized.
Regardless, understanding your financial mindset is the first step toward changing unhealthy patterns and reducing stress.
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2. Boost Your Financial Literacy
Stress often comes from the unknown. The more you know about money, the less intimidating it becomes, and the better equipped you’ll be to make smarter choices and feel in control of your money.
Got a library card? A favorite podcast app? A social media account? Then you have free ways of accessing financial experts and information, from basic terminology to step-by-step guidance on budgeting, saving and investing. You can learn at your own pace and on your own terms, making the process far less overwhelming.
3. Create a Budget That Works for You
You might think that a budget is simply a spreadsheet that tracks your expenses or an app that tells you what you’ve spent. It can be those things, but it can also be so much more: a powerful tool for achieving your financial goals.
To create an actionable budget, you’ll want to first calculate your income, including earnings from your main job, freelance work or side hustles. Then categorize your expenses into fixed costs (which stay the same every month) and variable costs (which fluctuate, like groceries and entertainment).
From there, assign spending limits to each category, prioritizing necessities like rent, utilities, food and transportation over discretionary spending like dining out or hobbies. Don’t forget to allocate a percentage for savings and debt repayment, both of which are essential for building long-term wealth.
A well-crafted budget helps reduce money stress by showing you exactly where your money goes and how you can reach your goals.
4. Prioritize Getting Out of Debt
One of the core foundations of good money management is avoiding high-interest debt, like credit card debt. Carrying a balance from month to month is a speed bump to building wealth — and a common source of financial anxiety.
There’s no single best way to pay down your debt: Some people prefer the snowball method, which focuses on paying off smaller debts first, while others opt for the avalanche method, which prioritizes high-interest debts to save money over time.
No matter which strategy you choose, the key is consistency. Look for ways to cut expenses or boost your income to repay your debt faster.
5. Set Up Essential Financial Accounts
Creating a safety net is crucial for feeling secure.
The first priority is to build an emergency fund in a high-yield savings account. Aim for at least three to six months’ worth of expenses. Even small monthly contributions add up and can protect you from sudden financial shocks, like job loss, medical emergencies, or urgent car or appliance repair costs.
As you insulate yourself from unforeseen emergencies, you’ll also want to think about long-term savings. If your employer offers a 401(k) with a match, contribute enough to capture that free money. If not, look into a traditional or Roth IRA for tax-advantaged retirement savings.
Spending time mastering these accounts today can help you build a rosier, more secure financial future.
Looking to build a legacy? Check out our Life to Legacy guide for expert advice and smart moves you can make today.
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This article originally appeared on GOBankingRates.com: Got Money Stress? These 5 Financial Habits Can Help You Feel More in Control
