Reduce Your Financial Stress

Well, here we are right dab smack in the middle of another tax season! There is (if you'll pardon the pun) nothing more taxing than taxes! Any time I feel listless and desire to have more stress in my life all I have to do is reach for an official IRS tax publication. If you aren't frustrated and stressed at the beginning of reading one of these volumes you certainly will be afterward. There is so much that is so confusing. I am so glad that my taxes are finally finished.

After relieving myself of my paperwork nightmare, I was struck with a bit of writer's block as to what subjects I should bring up in this article. I didn't really want to talk about taxes as there are plenty of good resources out there for coping with them and all that I would reveal would be the obvious. One good place I will recommend for "plain English" information is http://www.turbotax.com Also, their tax software is mighty stress reducing and it is what I used to prepare my return.

So what to write about? What suggestions could I offer? It then hit me that since I could not bring myself to write about taxes then perhaps I could offer my readers some stress-reducing financial tips which would be helpful all year long. So here they are!

Refinance now!
I don't need to remind you that mortgage rates are the lowest they've been in years. I'm sure that you (my wonderful readers) have received enough unsolicited email (from idiot spammers) informing you of this very fact. While I would not recommend that you refinance your house with just anybody who spammed you I would, however, recommend that you act swiftly and take advantage of the great rates. You can save a significant amount of money (literally tens of thousands in interest), improve your family's monthly cash flow and reduce the number of years you'll have to pay on your mortgage.

Build a checking reserve!
When was the last time you bounced a check? How much did it cost you? I remember the last time I bounced a check. It cost me $25 to the bank and $25 to the merchant. Fifty bucks for a lousy $15 check. Being the organized goddess that I am, I had never before bounced a check until I married my husband, Paul. Unbeknownst to me, my other half was using his check card and not entering his purchases into the account register. Viola! Goodbye $50. To say I was furious would be to say that the Great Wall of China is a nice little rock collection. I won't describe in detail the "conversation" we had that night. Suffice it to say it was not pretty.

The problem in having two people use one checking account is only one of them possesses the account register. I'm still working on hubby to get his receipts entered in promptly (he's getting better), but since he'll never be organized enough to do that daily I knew I had to find a way to prevent the stress of bouncing checks which wouldn't involve using some form of credit.

After thinking about it for a while I figured out a plan that would not only prevent bounced checks but would also create a nice emergency fund.

Any good personal finance book will tell you that the first thing to do is to "pay yourself first." This is so true! Each payday I put an entry into the checkbook which I call the personal checking reserve. It is as if I am writing a check to myself. I simply deduct $50 from my register total. The money is still in the checking account (it's not going anywhere) but in my register it is as if it was spent. Over a period of a year (26 paydays) my checking account reserve has reached $1,300. My account register might show a total of $1,000 in the account, but in reality the amount is really $2,300. This adds a nice buffer zone. And get this! I changed the account to an interest-bearing checking account and I am earning money off of the reserve. Now I do not have to worry about bouncing checks, I'm making money off of my money and I have a nice rainy day fund too.

Use a rewards card
While I still maintain our checking reserve we have adopted some new strategies since this article was originally written. As I now have a sufficient amount in the checking reserve and have a decent amount in a savings account I have taken hubby's debit card away from him. Since he does the majority of purchasing for the household (whether it is groceries, office supplies or what not) I have given him two rewards cards which he uses for all his purchases. One is a gas card which pays us a rebate for our gas purchases. The second is a credit card which rewards points for cruises. He uses this for everything and we rack up the points quickly. Now he doesn't have to worry about tallying up his receipts. Please note that we pay the full balance on these cards each month when they arrive -- otherwise it defeats the purpose. If you aren't disciplined enough to do this then I don't recommend you follow this tip. If you do you will be rewarded. We've since gotten two free cruises and hundreds of dollars in rebates from our cards. That's a nice change of pace.