Fifty-six percent of employees in America are financially stressed, according to a 2017 Workplace Benefits report prepared by Bank of America and Merrill Lynch. If you’re one of them, figuring out how to stop worrying about money could make your life a lot easier.
Unfortunately, there are lots of things to stress about when it comes to your finances. A survey by CreditCards.com revealed that a wide variety of money worries are keeping people up at night, including concerns about student loans, healthcare costs, retirement, credit card debt, and high housing costs.
Luckily, looking at the big picture and making a financial plan can help reduce stress. “Many individuals think their financial scenario is actually worse than it is,” said Magdalena G. Johndrow, a certified fund specialist and associate financial advisor at Farmington River Financial Group. “Often individuals have many moving parts and haven’t looked at their finances all together in one place.”
If you’re not looking at the big picture, you may be worrying unnecessarily. “Most people I’ve worked with are stressed because they don’t know if they’re doing enough,” said Michael Solari, a certified financial planner at Solari Financial Planning, LLC. “I find that most people who stress about money haven’t really thought through a game plan.”
Although it can be challenging to determine how to stop worrying about money, here are a few key pieces of advice for alleviating some of your potential financial concerns.
1. Tackle healthcare costs
Insurance coverage can reduce your worries about healthcare costs, as having a policy limits the potential expenses you face if you get sick. If you’re under 26, you’re allowed to stay on your parent’s health insurance plan — a convenient option for many young adults.
You may also be able to obtain subsidized insurance coverage through the Obamacare exchange. While open enrollment for 2018 coverage has already ended in most states, you could still obtain coverage if you have a qualifying life event such as getting married, having a baby, or losing your existing coverage.
Even with insurance, you might have concerns about high deductibles. Thankfully, there are several options to lower healthcare costs. One good option may involve opening a health savings account (HSA).
According to the IRS, you are eligible to open an HSA if you have an insurance plan with at least a $1,350 deductible for an individual. You can open an HSA at a wide variety of financial institutions including banks, brokerage firms, insurance companies and credit unions.
Look for a no-fee or low-fee account that makes it easy to access your money. You can make a pre-tax investment into the HSA and withdraw money tax-free to cover qualifying medical expenses like co-insurance costs, prescription drugs, and dental or vision care.
You can also talk with your doctor about how to lower care costs. Researchers from Duke University found that in close to 50 percent of conversations with doctors in which costs were brought up, a solution was found to lower out-of-pocket expenditures.
2. Plan for retirement
Worrying about retirement savings is justified, especially with studies, such as this one from the International Longevity Center, projecting millennials will need to save more of their income for retirement than past generations.
“Unlike for many other items in life — such as a mortgage or student loans — you cannot borrow for your retirement,” Johndrow said. Because retirement savings is so important, prioritize investing for retirement even when you have other financial obligations. “By not saving for retirement early, you miss out on years of compound interest.”
Starting to save for retirement as early as possible means you won’t have to save as much money each month to end up with a big nest egg as a senior. Start putting money into a 401(k) or an IRA, both of which allow you to invest with pre-tax income. While a 401(k) is available only if your employer offers one, anyone can open an IRA online.
Though experts recommend saving 15 percent or more of your income, even investing a small amount can put you on the right path.
3. Manage your student loans
If you’re struggling with high student loan payments, figuring out how to stop worrying about money can be very difficult.
In this situation, making a plan can also be helpful. Use a prepayment calculator to see how extra payments towards student loans could shorten your payoff time, and use strategies like the debt snowball or debt avalanche methods to pay down your debts faster.
In some situations, you may not want to pay off student loans early. Early repayment might not make sense, for example, if you are eligible for loan forgiveness or if your loans are at a very low interest rate and you can get a tax deduction for student loan interest. If this is your situation, you might focus on keeping your payments affordable instead.
Switching to an income-driven repayment plan could be one option to lower payments if you’re struggling to afford them. An income-driven plan sets your monthly payments at a percentage of your income, and could result in some of your debt being forgiven after 20 or 25 years payments.
4. Decrease mortgage and rent payments
Although many financial experts advise keeping housing costs to 30 percent of your income or less, close to 39 million households are paying more than this amount, according to the State of the Nation’s Housing Report .
If your rent or mortgage costs are very high, getting a roommate or renting out a room using Airbnb could help alleviate money woes and help you learn how to not worry about money. In the biggest rental markets in the U.S., renters can save 13 percent of income on average by sharing a home with a roommate, according to Trulia.
If you have the flexibility to do so, moving to a different city where you can benefit from higher wages or a lower cost of living could also help you stop worrying about money. Some cities, such as Durham, North Carolina and Houston, Texas, are especially good places to live when trying to pay down debt.
5. Repay credit card debt
If you’re concerned about credit card debt, making a payoff plan could also be your answer to the question of how not to worry about money.
One way to reduce the costs of credit card debt and make payoff easier is to consider debt consolidation. There are two popular ways to consolidate credit card debt:
- You could use a balance transfer to consolidate debt. This involves paying a small fee to transfer your current debts to a balance transfer credit card that offers a low introductory rate, such as 0% for a year.
- You could also apply for a personal loan with a bank or credit union and use the loan to repay all of your current debts.
Either of these options often reduces interest costs and monthly payments, making it easier to get out of debt. A credit card consolidation calculator can show you exactly how much consolidation could save you.
Whatever approach you take to repayment, Johndrow recommends you automate your credit card payment to ensure you pay on time. “Timely payments compose roughly around 64 percent of your credit score, so it is important not to miss them,” she said.
How to stop worrying about money
Your money worries are unique to your situation, so ultimately it’s up to you to decide what steps you need to take.
For many people who have financial concerns, making a plan and looking at the big picture will go a long way towards reducing stress. By following these tips, you can tackle some of your money concerns so you’ll feel more in control of managing your money.
Interested in refinancing student loans?Here are the top 6 lenders of 2018!
|Lender||Variable APR||Eligible Degrees|
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1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 7.89% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 6.97% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of Month/Day/Year, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 08/21/18. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at firstname.lastname@example.org, or call 888-601-2801 for more information on ourstudent loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
APR stands for “Annual Percentage Rate.” Rates listed include a 0.25% EFT discount, for automatic payments made from a checking or savings account. Interest rates as of 11/8/2018. Rates subject to change.
Variable rate options consist of a range from 3.27% per year to 6.09% per year for a 5-year term, 4.64% per year to 6.14% per year for a 7-year term, 4.69% per year to 6.19% per year for a 10-year term, 4.94% per year to 6.44% per year for a 15-year term, or 5.19% per year to 6.69% per year for a 20-year term, with no origination fees. APR is subject to increase after consummation. The variable interest rate will change on the first day of every month (“Change Date”) if the Current Index changes. The variable interest rates are based on a Current Index, which is the 1-month London Interbank Offered Rate (LIBOR) (currency in US dollars), as published on The Wall Street Journal’s website. The variable interest rates and Annual Percentage Rate (APR) will increase or decrease when the 1-month LIBOR index changes. The variable interest rates are calculated by adding a margin ranging from 0.98% to 3.80% for the 5-year term loan, 2.35% to 3.85% for the 7-year term loan, 2.40% to 3.90% for the 10-year term loan, 2.65% to 4.15% for the 15-year term loan, and 2.90% to 4.40% for the 20-year term loan, respectively, to the 1-month LIBOR index published on the 25th day of each month immediately preceding each “Change Date,” as defined above, rounded to two decimal places, with no origination fees. If the 25th day of the month is not a business day or is a US federal holiday, the reference date will be the most recent date preceding the 25th day of the month that is a business day. The monthly payment for a sample $10,000 loan at a range of 3.27% per year to 6.09% per year for a 5-year term would be from $180.89 to $193.75. The monthly payment for a sample $10,000 loan at a range of 4.64% per year to 6.14% per year for a 7-year term would be from $139.65 to $146.76. The monthly payment for a sample $10,000 loan at a range of 4.69% per year to 6.19% per year for a 10-year term would be from $104.56 to $111.98. The monthly payment for a sample $10,000 loan at a range of 4.94% per year to 6.44% per year for a 15-year term would be from $78.77 to $86.78. The monthly payment for a sample $10,000 loan at a range of 5.19% per year to 6.69% per year for a 20-year term would be from $67.05 to $75.68.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
3 Important Disclosures for SoFi.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.
All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.28% effective October 10, 2018.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.47% – 6.99%3||Undergrad & Graduate|
|2.46% – 6.97%1||Undergrad & Graduate|
|2.57% – 8.44%4||Undergrad & Graduate|
|3.05% – 6.47%2||Undergrad & Graduate|
|2.50% – 7.24%5||Undergrad & Graduate|
|2.79% – 8.39%6||Undergrad & Graduate|