I had the opportunity to interview Linda Neuman, CPA on my weekly Internet Show (10/24/07) and talk about financial stress. She shared seven steps to reduce financial stress.

7 STEPS TO REDUCE FINANCIAL STRESS

1) Budget: Keep it simple! Don’t spend more than you earn.

2) Determine your exact expenses: Make a list. Divide the list by:

a. fixed expenses like house payment, car payment, etc.

b. discretionary expenses like groceries, clothing, starbucks coffee, etc

3) Make a plan: Decide now what you want to spend on holiday shopping, savings, new house, charities, etc.

4) Reduce impulse buying: Use cash instead of cards for discretionary spending. It forces your awareness of your spending habits.

5) Reduce credit/debit purchases: Be aware there is no recourse on a debit purchase if you have a disagreement with vendor. The little amounts add up to a big amount before you are aware of it. The bill comes in at the end of month and AAUGGHH!

6) Be flexible! Save for that big ticket item instead of going right out and charging it. Look at slightly used items or scout E-bay instead of brand new. Wait a month after something new comes out.

7) Take baby steps: It’s hard to make major financial changes overnight. Work hard on putting one of the new habits in place and just be aware of the others. Decide what you want to work on the most and stick to it.