Like almost everything else in life, emotions play a bigger role in your financial success than you might expect. Your feelings about money can dictate how you approach it, and if fear dominates those feelings, you might treat money as a threat rather than a tool to improve your life.
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Tori Dunlap knows more than a thing or two about overcoming emotional hurdles with money. The author, entrepreneur, money expert and founder of Her First $100K has dedicated much of her coaching to helping people feel less fearful about their finances. So, it’s no surprise that she has practical advice for conquering some of your most common money fears. Here they are.
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1. Don’t Panic-Mode Your Emergency Fund
Dunlap reminds us that an emergency fund should ideally cover three to six months of living expenses. This money should preferably be in a high-yield savings account that allows it to grow over time.
However, overstuffing your emergency fund instead of contributing to your retirement savings or investment accounts can limit your ability to explore other ways of broadening your wealth. Striking a balance ensures you’re prepared for emergencies without hindering reaching your long-term financial goals.
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2. Get Strategic About Spending
No matter how careful you try to be with your personal finances, your credit card history likely includes some mindless — or at least unnecessary — purchases. Rather than berating yourself, sit down with your bank statements and learn where you might be overspending.
If something doesn’t add value or joy to your life, cut it out and redirect that money to savings or investments. Dunlap recommends services like Rocket Money to help you identify and cancel forgotten subscriptions or recurring charges for things you no longer want or need.
3. Check In With Your Finances
You’ve likely heard the advice that taking yourself out on a “me time” date can be a great way to nourish your soul and boost your self-esteem. Did you know that treating yourself to a money date can also help you feel more connected to your finances?
Create a regular routine for checking in on your financial health in a low-pressure way. This beats hurriedly checking your accounts while breathing into a paper bag. It will help keep you on track with everything from boosting your credit score to paying off your student loans.
Treat yourself to a coffee or your beverage of choice, and take a thoughtful look at your spending and saving habits. In the meantime, you can also keep calm and carry on monitoring your finances by setting up automated systems for saving, investing and paying bills.
4. Figure Out Your ‘Ramen Noodle Number’
Okay, what exactly is a “Ramen Noodle Number,” and does it go down as easily as that sodium-packed dorm room staple? A Ramen Noodle Number is simply the minimum amount of money you need to cover your essential living expenses — think rent, food and utilities.
Just as ramen is the bare minimum of meals — it’s not fancy, but it’ll keep you fed — the Ramen Noodle Number represents what you need to survive. Dunlap explains that knowing this number provides clarity and reassurance, especially during emergencies or financial setbacks. It’s also a helpful tool for adjusting your budget in tough times.
5. Diversify Your Income
Freelance gigs, side hustles and passive income are excellent ways to alleviate money-related stress. Knowing you have extra money coming in provides peace of mind and ensures you’re not wholly reliant on a single source of income. With multiple streams of revenue, your backup plans can have backup plans.
Some things in life are objectively scary, like zombies, quicksand and your father-in-law’s fruitcake recipe. But, as Tori Dunlap shows, money doesn’t have to be one of them. By being reasonable about your emergency savings, monitoring your spending, treating yourself to financial check-ins, learning your financial baseline, and diversifying your income, you can conquer your biggest money fears — and take control of your financial future.
Caitlyn Moorhead contributed to the reporting for this article.
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This article originally appeared on GOBankingRates.com: 5 Ways To Overcome Your Biggest Money Fears, According to Tori Dunlap
