th images menu user export search eye clock list list2 arrow-left untitled twitter facebook googleplus instagram cross photos entrep-logo-svg

Financial Adviser: 5 Ways to Beat Financial Anxiety When You're Stressed About Money

There are strategies you can follow to stay secure when it comes to money issues
By Henry Ong |

 

 

Q: I have been working for 10 years now but I don’t seem to have clear financial direction in life. I am having sleepless nights lately worrying how I can sustain my personal expenses in the future. Although I have set aside some savings, I have no idea if it is sufficient to take care of my finances later on. What should I do? Lix, by email

 

 

There is every reason to be anxious about your financial security when you don’t have control of your personal finances.

 

Many people, even those who are already successful in the business, also struggle when it comes to financial planning. It is difficult to focus on work when you are constantly bothered by money issues.

 

Rising expenses at home, missing credit card payments, feeling of not earning enough to support your family are some of the causes of financial stress.

 

While it is good that you were able to set aside some savings for rainy days, you should also know how to secure it and make it more productive. You can minimize your financial stress when you know how to manage your financial situation.

 

Here are five strategies you can follow to reduce your financial anxieties and build your security in the future:

 

 

1. Knowing where you stand financially

Take an honest look at your finances and analyze your cash flows. How do you prioritize your expenses? How much of your income do you set aside as your savings? Do you spend your money more on consumption or investment? How much money do you need to set aside as emergency fund?

 

Answering these questions will help you assess your ability to do financial planning. It will also help if you can estimate your current net worth. You can do this by summing up your total assets, which can be your savings in the bank, house, car or any property, minus all your payables. Your net worth will tell you where you stand financially and you can manage it from there on.

 

 

2. Knowing what your financial goals are

Set your financial goals by identifying what you need to achieve with a target timetable. Your goal must be specific so you know how much you need to earn in order to achieve it.

 

For example, do you have any idea what your living standard will look like when you retire? How much income do you need when you retire so you can afford to sustain your daily expenses and enjoy life?

ADVERTISEMENT - CONTINUE READING BELOW

 

How much do you need to earn to move into your dream house? How much do you think you need to have in order to travel the world? How many years do you intend to build your savings to achieve your goals? These are the questions that will guide you in determining how much savings you need to accumulate.

 

 

3. Knowing how you will achieve your financial goals

When you have made up your list of goals, classify them as short-term or long-term. If you think you can carry out a goal within the year then that will be considered short-term.

 

Any goal that is beyond one year should be considered long-term. Your short-term goals can be about buying a new laptop or mobile for yourself. It can also be achieving a savings target of 20 percent of your monthly household expenses, or finding a new job that pays well.

 

Your long-term goals, on the other hand, can be about investing in a retirement fund that will take care of your finances when you reach 60 years old.

 

 

4. Knowing your financial roadmap

Develop a financial plan to achieve your goal. This plan will serve as your guide in your journey. You may need to revisit your plan from time to time as there may be some assumptions that you have made that need to change due to changes in economic environment.

 

For example, you may have to adjust your retirement projection because of changes in interest rate or exchange rates, or you may have to adjust your goal higher because your income situation has changed.

 

In the plan, you also put an action plan for every goal in your list. For example, if you want to cut down your monthly expenses by 20 percent, your action step would be to reduce the number of times you buy your café latte to once a week from daily.

 

 

5. Knowing how to put discipline in your finances

Make a budget of your income and expenses and try to follow it consistently. A budget is similar to how you assess your cash flows earlier but, this time, it is not about how you spent but how you plan to spend.

 

You may not be able to follow every peso in the budget but this will help you become conscious of your spending. You can make your budget flexible so you can adjust when you need to until you get it right.

ADVERTISEMENT - CONTINUE READING BELOW

 

Monitor your progress regularly. You may also need to consult a Registered Financial Planner (RFP) to help you at some point for specific counseling about your financial situation when necessary.

 

 

*****

 

 

Henry Ong, RFP, is president of Business Sense Financial Advisors. Email Henry for business advice hong@businesssense.com.ph or follow him on Twitter @henryong888 

Latest Articles

Vice President Leni Robredo Launches New Program to Fight Poverty

The program will help create jobs and develop skills of local residents.

byPaolo Chua for TownandCountry.ph | October 22, 2017 00:00:00

PH’s Leading Online Stock Broker Reports “Possible Breach” Affecting Client Data

But COL Financial assures clients of the integrity of their account balances and stock positions

byEntrepreneur Staff | October 21, 2017 11:00:00

(Infographic) The Future According to Elon Musk

Plans and predictions for our world and beyond, according to the man behind SpaceX

byEmily Conklin | October 21, 2017 08:00:00

Don't Be Like the Woman Who Poisoned the Office Coffee Pot -- Follow These 10 Steps to Conquer Work Stress

Essential principles to help you get grounded, so you feel confident, calm and secure when things...

byMarianne Clyde | October 21, 2017 06:00:00

The 4 Mindsets You Need to Adopt to Succeed

How you approach your work is more important to your success than what specifically you're working...

byTimothy Sykes | October 21, 2017 02:00:00

This Easy Psychological Hack Could Increase Your Savings

Apparently, emotions play a huge role when it comes to financial health

byKhatrina Bonagua for FHM.com.ph | October 21, 2017 00:00:00

How Much Money Are College Entrance Exam Review Centers Making?

A close look at revenues and profits of MSA Group and AHEAD Learning Systems

byPauline Macaraeg | October 20, 2017 14:00:00

Which PH Tycoons Are Partnering with Their Potential Disruptors?

PwC’s 2017 Philippine Startup Survey says big businesses are tying up with innovative startups

byLorenzo Kyle Subido | October 20, 2017 13:00:00

The Most Common Habit of Self-Made Millionaires

Develop this habit if you sincerely want to retire as a self-made millionaire

byBrian Tracy | October 20, 2017 08:00:00

Sorry, Millennials -- You Are Not Entrepreneurs

Younger entrepreneurs should look to their older counterparts for guidance to be successful

byDavid Meltzer | October 20, 2017 06:00:00

Transform Vulnerability Into Your Wonder Woman Superpower

Being more human may just be the answer to leading superhuman disruption

byDr. Patti Fletcher | October 20, 2017 02:00:00

With 100 Stores and Counting, This Restaurant Proves That "Lutong Bahay" Will Never Go Out of Style

Kuya J opened 100 restaurants in just two years

byTrixie Zabal-Mendoza for Yummy.ph | October 20, 2017 00:00:00