If you are suffering from financial anxiety, you are not alone. According to a recent US Census Bureau Household Survey, more than a third of Americans reported difficulties paying bills; adding to mounting financial stress in American households.  In this article, we discuss how to manage financial stress by creating and maintaining a budget in 4 easy steps.  


  • Budget Your Money Worries Away
  • Step 1: Determine your Income
  • Step 2: Calculate your Expenses
  • Step 3: Plan your Monthly Budget
  • Step 4: The Key to Success

Financial stress can result from many factors including low income, poor financial management, excessive debt, or even raising kids. The good news is, by learning how to relieve your financial stress, you will improve your relationship with money and overall mental and physical health.

According to debt.com, the majority of Americans surveyed reported creating a budget “helped them get out and stay out of debt.” This is great news for Americans who are working towards building a stable financial future free from excessive debt.

Budget Your Money Worries Away

It may seem overwhelming at first, but with regular practice, creating a budget is the best strategy for reducing financial worries on average in the United States. Limited financial support and education programs have made it so it seems like operating on a restricted budget isn’t possible, however financial educators have seen this practice reduce the common financial stress related issues in American households.

“A budget is telling your money where to go instead of wondering where it went.” – Dave Ramsey

A budget provides a spending plan that works as a visual picture of how you will spend your money every month. It will help you decide what you must spend your money on and in which areas you can spend less money on some things and more on others. Without a budget, you risk running low on money at the end of the month, which can result in paying costly overdraft fees or taking out payday loans with hefty interest rates. By creating and maintaining a budget, you will be able to cover monthly expenses, set financial goals, reduce debt, and save money for your future.

Creating a working budget can be achieved by following 4 easy steps.

Step 1:  Determine your Income

Determine your total monthly income, including your paychecks, child support, and any other income sources. If your paycheck amount differs due to fluctuating hours or commission, take an average of your last 3-6 months pay and use the amount as your average monthly income.  

Your total monthly income should equate to more than your monthly expenses.  If this is not the case, you might consider adding to your income by taking on a side hustle.

Popular side hustles:

Once all income sources have been assessed, you will need to add up your total expenses.

Step 2: Calculate your Expenses

Total your monthly expenses. Expenses include everything you spend money on and can be divided into three categories.; fixed expenses, flexible expenses, and discretionary expenses.

  • Fixed expenses are needs that are the same amount each month. For example, housing is a fixed expense with a known monthly cost.  
  • Flexible expenses are needs that differ month to month and may be more difficult to pin down. They include gas, food, utilities, credit card payments, loan payments, medical bills and more.  To calculate flexible expenses, simply review your transactions and take a three-month average.
  • Discretionary expenses are nonessential costs based on your wants. Grabbing that Starbucks coffee, eating out, and entertainment subscriptions are all discretionary expenses that may vary month to month.  Setting a spending limit for discretionary expenses is a great way to keep your budget on track.

After reviewing your monthly income and expenses, you have a complete picture of your finances and an opportunity to consider cutting back on monthly spending.  Decreasing spending will increase your income, reduce financial stress, and free-up money for savings, investments, paying down debt, and covering unexpected expenses.

Save money and put cash back in your wallet with these money saving products and tips:

  • Use eql Finance coupons and promo codes to save money at retailers you shop with.
  • Use eql Saver extension to save money shopping online.
  • Audit your subscriptions.
  • Reduce your electric usage and save on utilities.
  • Make a grocery list before shopping and cook meals at home.

Now that you have outlined your income and expenses: it’s time to create a budget plan.

Step 3: Plan your Monthly Budget

Plan your monthly budget.  Write down your income amounts by dates. Next, subtract your fixed and flexible expenses from your income. The number you have left is your discretionary expenses budget, which can be divided by the number of weeks in the month to determine a weekly spending allowance. Once you know the amount of free cash you have available weekly, you can decide if you want to stash some money in savings, pay down a debt, or splurge on an evening out.  

If you prefer to use a digital platform for budget planning, there are countless online tools and apps you can use, but most people prefer using good old fashioned pen and paper.  Nevertheless, here are a few budget planning and budget managing apps recommended by Nerdwallet:

If you desire a fillable pdf, consumer.gov provides one here: budget worksheet.

Whichever platform you choose, creating a monthly budget plan is the first step to improving your financial wellness and decreasing money worries. However, creating a budget plan isn’t the ending; it’s the beginning.  The next step is to maintain and review your budget frequently.

Step 4:  The Key to Success

Budget Maintenance is key.  It’s important to track your spending throughout the month to ensure your budget stays on track. Get into the habit of keeping receipts and adding the amounts to your budget worksheet.  You’ll be less likely to overspend if you know exactly how much cash flow is leaving your accounts daily.  You may find a need to adjust your budget plan as the month progresses.  

At the end of the month, review your spending and use the information to create the next month’s budget. You may find that you can cut down on discretionary expenses or need to add a little cushion to your flexible spending budget.  Either way, it’s important to remember you are in control and actively taking steps to reduce your financial stress and live a happier and healthier life.  

Learn more about how EQL may be able to help you manage financial anxiety and achieve financial wellness.