There was an old saying in Wall Street to buy "when there is blood in the street.
" Some historians attribute to this famous saying to people who commit suicide after the market crashes.
According to a poll from financial websites, approximately 7 out of 10 respondents have experienced financial stress over their lifetimes.
The condition seems to be prevalent among us and could well be the cause of other health-related problems like lack of sleep and depression.
It is important that we should be aware of the causes of financial stress for us to avoid them.
We list them down and offer short and simple advice on how to deal with them.
1.
Lack of a Financial Plan and Goals People who do not have a financial plan usually would go nowhere in their finances.
Rather than spending all the money we earn, we should prepare a feasible budget to meet our financial goals.
What are financial goals? This may include a retirement fund, a trust fund for the children or probably an emergency fund.
2.
High Debt Levels Think of the large companies in history and the causes of their down fall.
They usually take on a lot of spending spree with the use of debt.
Debt is a ticking time bomb and it would take time before you realize you are in trouble.
A sign that you are in trouble is when debt collectors are starting to call you to remind you to pay.
3.
No Savings You may well have a financial plan or goal but you do not start working on them.
Some people are writer than doers.
They write their goals in papers but never act on them.
In the end, they spend more what they earn.
The result would be zero savings and when disastrous events like a recession or job loss happen, they are the first ones to breakdown.
4.
Looking for Higher Yields but Risky Investments Many people that investing is like gambling.
They would often go and find investments that offer higher returns but at the expense of losing all of their capital.
The recent crash of 2008 is a good example.
People are rushing for the fool's gold but end up losing everything in the end.
Building wealth takes time and preserving your capital is above all things.
5.
Lack of Financial Literacy Most people have common misconceptions about handling their finances.
They think that real estate always goes up, government bails out individual and the stock market will bring you tremendous wealth.
The problem is that people do not take time to read and learn everything about money.
In the end, they blame others for the investing decisions they have made.
The good news is that there is a cure for financial stress.
The first step is being aware of the causes of the financial stress, taking time to read books on handling money and finances and taking steps to conquer them.
The key is to develop good money habits.
As Warren Buffett would say, "Chains of habit are too light to be felt until they are too heavy to be broken.
"
" Some historians attribute to this famous saying to people who commit suicide after the market crashes.
According to a poll from financial websites, approximately 7 out of 10 respondents have experienced financial stress over their lifetimes.
The condition seems to be prevalent among us and could well be the cause of other health-related problems like lack of sleep and depression.
It is important that we should be aware of the causes of financial stress for us to avoid them.
We list them down and offer short and simple advice on how to deal with them.
1.
Lack of a Financial Plan and Goals People who do not have a financial plan usually would go nowhere in their finances.
Rather than spending all the money we earn, we should prepare a feasible budget to meet our financial goals.
What are financial goals? This may include a retirement fund, a trust fund for the children or probably an emergency fund.
2.
High Debt Levels Think of the large companies in history and the causes of their down fall.
They usually take on a lot of spending spree with the use of debt.
Debt is a ticking time bomb and it would take time before you realize you are in trouble.
A sign that you are in trouble is when debt collectors are starting to call you to remind you to pay.
3.
No Savings You may well have a financial plan or goal but you do not start working on them.
Some people are writer than doers.
They write their goals in papers but never act on them.
In the end, they spend more what they earn.
The result would be zero savings and when disastrous events like a recession or job loss happen, they are the first ones to breakdown.
4.
Looking for Higher Yields but Risky Investments Many people that investing is like gambling.
They would often go and find investments that offer higher returns but at the expense of losing all of their capital.
The recent crash of 2008 is a good example.
People are rushing for the fool's gold but end up losing everything in the end.
Building wealth takes time and preserving your capital is above all things.
5.
Lack of Financial Literacy Most people have common misconceptions about handling their finances.
They think that real estate always goes up, government bails out individual and the stock market will bring you tremendous wealth.
The problem is that people do not take time to read and learn everything about money.
In the end, they blame others for the investing decisions they have made.
The good news is that there is a cure for financial stress.
The first step is being aware of the causes of the financial stress, taking time to read books on handling money and finances and taking steps to conquer them.
The key is to develop good money habits.
As Warren Buffett would say, "Chains of habit are too light to be felt until they are too heavy to be broken.
"