Taking Control of Money Anxiety
As a young adult, I’ve learned that managing finances can be a daunting task, especially when it comes to paying off student debt. After graduating from college, I found myself overwhelmed by the weight of my financial responsibilities. My anxiety was through the roof, and I knew I had to take drastic measures to regain control.
From Anxiety to Action
I started by tracking every single purchase I made, categorizing them into fixed expenses, groceries, debt, and miscellaneous spending. While this exercise provided me with a clear picture of my spending habits, it only added to my anxiety. I became obsessed with every dollar I spent, often putting off essential purchases just to avoid logging them. It was time for a change.
A New Approach to Budgeting
I needed a system that would provide structure without suffocating me. Through trial and error, I developed a plan that has helped me manage my money and alleviate my anxiety.
Step 1: Calculate Fixed Expenses
First, I calculate my fixed expenses for the month, including rent, utilities, and student loan payments. Since I’m paid biweekly, I divide this number by two and transfer it to a separate checking account. This ensures that I always have enough to cover my essential expenses.
Step 2: Determine Savings
Next, I decide how much I want to save each month, separate from my 401k contributions. This amount is also divided by two and placed in a separate account. My savings goals include building an emergency fund and contributing to a Roth IRA.
Step 3: Enjoy Your “Fun Money”
Everything left over in my main checking account is mine to spend. I use this account to pay off my credit cards, which I use for everyday purchases and pay off in full each month. While it may sound dull, the most exciting thing for me is watching my savings grow and my debt shrink.
Finding Peace of Mind
This system isn’t foolproof, but it’s worked wonders for me over the past year. I still get anxious when I see my credit card balances rise, but knowing exactly how much I have left to spend helps alleviate my worries. By allocating my income wisely, I can rest assured that I’m covering my essential expenses, aggressively paying off my student loans, and saving a healthy portion of my paychecks.
A Year Later…
It’s been a year since I implemented this system, and I’ve noticed a significant improvement in my mental health. I still have a long way to go, but for now, I’ve found a sense of peace and control over my finances. By taking small steps towards financial responsibility, I’ve been able to reduce my anxiety and focus on building a brighter future.
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