|Arla Wallace is an accounting professional with over 20 years experience. She spent several years working for both publicly-traded and private entities before founding her own business. Today she partners with small business owners so they can focus on operations while leaving the responsibility of staying on top of accounting tasks to her. She is a Certified Public Accountant (CPA) and a Certified ProAdvisor for Quickbooks Online.|
How often do you think about money? Financial stress impacts a large number of people at least some time during their life. While it is possible to experience a good relationship with money, many people struggle with personal finance skills and concepts. Your relationship with money is a lifelong journey compounded by the need for financial education. The sooner you can identify any problems you have with money, the better equipped you can be to make smarter financial decisions in the future.
Anxiety can be felt when trying to maintain the standard of living you enjoy. Paying monthly bills, including rent and mortgage, making credit card payments, and having money left over to save for retirement are all common financial concerns among Americans. Having money to pay for medical costs for routine healthcare or being able to cover medical costs for a serious injury or illness can also cause one to worry. While money worries for many Americans are similar, there is a strong correlation between income and financial stress. According to Gallup’s Economy and Personal Finance poll conducted in April 2022, worry about not having enough money to pay monthly bills and paying housing costs, like rent and mortgage, were significantly higher for those households making less than $40,000 annually. Nonetheless, regardless of income level, it is possible to take control of your financial situation and reduce financial problems that trigger stress.
Without confidence to carry out financial responsibilities, one can feel helpless and it can be hard to trust oneself. Stress brought on by financial problems can lead to sleep issues and can affect your social life and relationships with others if left untreated. What’s more, mental health can affect your ability to work, which can negatively impact how much income you can earn. Identifying your money problems—you need more money or you need to change how you spend money—is the first step toward obtaining financial freedom.
Credit products are more readily available than ever, making it easier to purchase goods and services and transfer funds electronically. Cash payments, once the primary method of payment for earlier generations, is no longer as widely used to make purchases. Without a good understanding of finance, credit products can lead to poor spending decisions and increased debt burdens. Coupled with a lack of financial preparation for the future, this spending behavior can lead to poor credit or even bankruptcy.
Good personal financial habits involve much learning and lots of practice. As such, implementing a plan can enable you to stay in step with your financial goals. Creating a budget is one tool to track how much you spend over a period of time against how much you receive. Paying bills promptly can eliminate interest and penalties that come with late or missed payments. Reviewing your credit report regularly can help you identify and report errors to the credit bureaus to keep your credit report free from inaccuracies.
There are many resources available to help you educate yourself about personal finance. Financial knowledge can be gained through reading books, listening to financial podcasts, or even talking to a financial professional. Taking steps to improve your financial literacy can help you decrease money mistakes, reach your personal financial goals sooner, and help your household prepare for financial emergencies.