The best horror film directors know that what we don't see is much scarier than what they can show us. The same can be said about personal finances. It's not the balanced checkbook or the updated household budget that worries us. It's the unknown that's scary. Soaring credit card debts, piles of household bills, and the unexpected, yet inevitable expenses can plague us, like zombies. Face your bills head on and put those worry demons to rest.
Face the credit card demon first - The biggest source of money worries often stems from credit card debt, which seems to grow bigger and bigger, like The Blob, even when you've stopped swiping your card.
* Credit score check up - Use an online, free source like CreditSesame to track your credit score and your credit card expenses.
* Use a credit card repayment calculator to know exactly how long it will take to kill the debt.
Identify your income - The first defense against worrying about money is identifying all sources of income. If you have a job with stable pay and hours, this should be easy. Gather your pay stub (and that of your partner if applicable), as well as documents showing child support, alimony or financial aid. When you receive a raise, health care contributions increase, or you start contributing more to your 401k, readjust your budget as necessary.
I have worked a job for the last seven years that does not have steady income. My income has fluctuated greatly from week to week, and from month to month. Working for yourself is not for everyone, at least as a full-time job.
Supplement your income - One way to ease your worry if you aren't making enough money is to consider a second job. You will make more at a second job if you work at something you are good at, on your own. It could be selling your knitting projects online, or setting up a cupcake stand at the local Farmer's Market. Not only will be enjoy being an entrepreneur, you will feel more in control of your ability to make money.
Track your real spending - Do you really know how much you spend daily, weekly and monthly or are you just guessing? Some banks now have useful account features that split your expenses into categories, from transportation to groceries. These systems are somewhat limited, and the software doesn't always know how to categorize purchases from large stores like Walmart which sell groceries as well as electronics.
* Write in expenses on the FDIC worksheet for daily spending.
* Use a website like Mint.com to automatically track your bills and expenses.
* Track your real expenses the old-fashioned way by saving receipts. You can categorize them and add them in a spreadsheet. Start asking for receipts for all purchases.
* Manually add daily expenses into an app like Expensify, Spending, Receipts Pro, or Expense Manager.
Budget monthly expenses - The only way to feel at peace with money is to make a budget. Make a list of household, medical and personal expenses. Monthly budgets are the most manageable because the bulk of bills (mortgage, car insurance, utility bills) are due monthly.
* Some expenses occur annually (memberships, taxes, excise taxes) or quarterly (trash/recycling feeds, life insurance payments
Looking ahead - Retirement funds and savings account don't grow much without some input from you. Think ahead and start saving now, you'll sleep better at night knowing some of your money is set aside for your future.
* Savings calculator
* The compound interest calculator shows that saving for retirement now is better than starting later.
Identify Assets - Make your first personal financial worth statement by comparing your debts with your assets. When you see this on paper, in actual numbers, you can make steps toward improving your situation. Seeing that you actually do have assets may make you feel better about money and stop worrying needlessly.
More by this contributor:
How to Gain Control of Your Personal Finances
How Much Money Will I Need for Retirement?
Sources
IRS Withholding Calculator, http://www.irs.gov/Individuals/IRS-Withholding-Calculator
MyMoney.gov
