Financial stress in Olmsted County is skyrocketing, according to a recent report put out by the Olmsted County Community Health Improvement Plan. One third of Olmsted County adults are financially stressed, with many people worried about how they’ll be able to pay everything from medical bills to child care. Even more shockingly, over half of the people who are financially stressed have incomes that are between $35,000 and $49,000, significantly above the poverty level.
The good news is that if you are suffering from financial stress, you can take steps to reduce it, and potentially even eliminate it entirely.
A budget lets you make sure you have enough money to cover your expenses each month by prioritizing your necessary expenses first. Even better, you can use a budget to figure out the most effective way to use the money you have left over after you’ve taken care of your necessities.
One of the key causes of financial stress is not having enough money to take care of any unplanned financial emergencies. A well-funded savings account can go a long way toward alleviating that fear.
The best way to build up your savings account is to make sure you consistently put a percentage of your paycheck in an emergency fund each month. Most financial advisors say you should aim for at least 10%. You should aim to have at least three months’ worth of salary in your emergency fund, although once you have at least $2,000 you’ll be able to cover most emergencies.
Ironically, a lot of people in Olmsted county are financially stressed due to healthcare costs. While it’s hard to mitigate all the costs of healthcare, you can take steps to make sure you won’t drown in debt if you have a medical emergency.
The best way to get rid of this financial stressor is get health insurance. If your job doesn’t offer you health insurance, you can visit MNsure to purchase insurance. You may not enjoy the idea of adding yet another bill to your list of monthly expenses, but you’ll be happy you have it if you experience a medical emergency.
The best way to reduce financial stress due to credit card debt is, naturally, to pay off the debt. Focus on paying off one credit card bill at a time, while still making the minimum payments on all your other debt. Once you’re finished paying off one credit card bill, focus on another, and repeat the process until you’re debt free.
It’s worth pointing out that there are several tools that can make this process easier. First Alliance Credit Union has a debt organizer you can download for free, and you can also apply for a debt consolidation loan that will consolidate all your debt payments into one convenient monthly payment with a lower interest rate.
Financial stress can affect anyone. Fortunately, there are steps you can take to reduce it. Creating a budget will help you gain some much-needed control over your money and building up your savings account will give you some peace of mind. You can also guard yourself against financial stress by buying health insurance and taking steps to pay down your debts.
You can also use several of the tools First Alliance Credit Union offers its members to reduce financial stress. We have comprehensive guides to creating a budget and building up your savings in our resource center, and you can also talk with our partners at Green Path Financial Wellness to get free one-on-one financial counseling.