I’m a Financial Advisor, and Here’s My 6-Step Checklist To Keep Stress About Money Away

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In the spring of 2020, daily life for many changed drastically as the pandemic swirled through the country and world. Living and working conditions started looking different for a great number of folks, unemployment rates skyrocketed, and many were forced to rethink their finances and savings strategies. And, well, those changes can translate to plain old stress. In fact, a Fidelity Investments Financial Sentiment Survey of more than 2,000 adults conducted in February 2021 found that 52 percent of respondents who identify as women named lack of savings as a major cause of stress that compromised their sleep.

"During the pandemic, what we did see for everybody, particularly for women, [is that] financial and money stress growing," says Lorna Kapusta, head of Women Investors at Fidelity. As a result of the economic downturn caused by the pandemic, she adds, people were motivated to rethink their emergency savings.

And thankfully, information is available that can curb worries about savings from becoming a living nightmare that ruins REM. Below, experts share a six-step financial checklist to help you get your money on track and hopefully, help ensure your sleep quality doesn't suffer.

Experts In This Article

Learn how to deal with financial stress with a 6-step financial checklist

1. Pay down debt

May Jiang, CPA, CFP, tax and financial advisor for Offit Advisors says debt can psychologically weigh people down. High interest rates associated with unpaid debt—especially consumer debt marked by borrowing from credit card companies to purchase consumer goods can leave your wallet hurting (and potentially, sleep game, too).

Of course, everyone's ability to pay down debts is different and depends on cash flow and a number of other factors. But in general, Jiang suggests to "keep gradually paying off interest-bearing debt" when you can. Start by creating a plan to be able to do so.

2. Create a budget

As a first step in creating a budget that will help you be able to deal with financial stress, Jiang suggests checking your cash inflow and outflow. That way, "you can see how they are spending the money," she says, adding that it makes sense to track expenses and paychecks on a weekly basis because seeing small chunks of information is digestible to manage.

3. Create a financial plan

A financial plan is an analysis of where you are financially that can help you set goals for what you want to achieve in the future. Whether you're paying off a mortgage or saving for your child's college education, a financial plan can help you take inventory of your assets and expenses and then strategize how to hit financial milestones by deciding where and how to allocate the remainder of your money.

4. Increase retirement savings contributions

Folks can open a retirement savings account such as a Roth IRA or a 401(k) and contribute the maximum annual amount. The earlier a person begins contributing to an account, the better because the money compounds and accumulates interest over time, says Jiang.

5. Determine how much is needed for retirement

Retirement plan contributions, balances, and needs will differ depending on a person's lifestyle and goals. To make sure you're saving enough to make sure your retirement lifestyle goals are attainable, she recommends calculating your annual living expenses such as housing, food, and care, and factoring in miscellaneous expenses that come up, such as travel and gifts, for instance. Once you have an estimate, you can start putting away your dollars on a monthly until you reach retirement.

6. Start to invest or invest more, outside of your retirement accounts

Beyond 401(k) and Roth IRA, there are a number of other ways to invest your money, such as stocks, bonds, and mutual funds—and you can get started pretty easily using a number of easy-to-use investment apps.

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