Like car alarms that go off at 3 a.m. or those echoing drips
in the bathroom sink, financial worries are costing many
Americans sleep, according to a recent poll by the National
Foundation for Credit Counseling (NFCC).
Nearly four out of five poll respondents said that money
worries kept them awake at night. Those results might be a little
skewed, because the poll was taken via the NFCC website, and
presumably many of its visitors are people with credit problems.
Still, the point is valid -- when someone has money problems,
those problems tend to creep around in the middle of the night,
Keeping money worries at bay
Here is the key thing to remember: The middle of the night is not
the time to confront your financial fears. You need to work on
them in the light of day, when you can do something constructive
about them. Here are some positive steps you can take to put your
financial worries to sleep:
Create a budget to get current expenses below
Debt may be your most troubling problem, but you cannot think
about reducing it until you stop overspending. Focus on the
present by formulating a budget that brings spending below
income. Only then can you begin to think about addressing your
Prioritize debt by interest expense.
Line up those credit card statements on the kitchen table, and
sort them from highest to lowest interest, so you know which
sources of debt are the most costly.
Target high-interest credit cards.
With your credit cards prioritized by interest expense, start
attacking the highest ones first. Keep up with all necessary
payments, but put any extra money toward the high-interest
can also help reduce your credit card rates, but be
careful -- opening up new accounts can damage your credit
rating. However, if some of your existing cards have higher
rates than the others, simply transfer as much as you can from
the worst cards to the best cards.
Eliminate checking account fees.
Especially if you are scraping along with a low checking
account balance, monthly fees can eat up a big chunk of that
balance, and even cause overdrafts that lead to additional
fees. Free checking accounts still exist, though you may have
to look online to find them.
Create a pathway to zero debt.
At first, you may only be able to pay down debt in small
handfuls, but project that out to determine whether you are on
course to eventually eliminating your debt. Knowing the
destination can help you feel better about the steps along the
Communicate the game plan.
Talk to your family about what is going on. Financial stress
often comes from trying to hide the truth from other members of
the household. Everyone is going to have to be part of the
solution, so you need to fully explain the problem.
The first rule of getting out of financial distress is that
there are no easy or instant answers. It is a process, but as
long as you have mapped out the steps and go to bed each night
knowing you have taken the steps you should be taking, you should
start to sleep a lot better.
originally appeared on money-rates.com.
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