Five Financial Mistakes to Avoid to Reduce Your Money Worries

Creating a healthy relationship with money starts by reducing your money stress. Worry and stress deplete your energy and rob you of precious time that could otherwise be spent doing what brings you joy and happiness. Isn't it time you stop stressing about your finances?

When we feel we have little or no control over our financial life, this really means that our finances are running our life, causing increased stress levels and usually many hours of worry. Worry and stress often leave people feeling stuck and in a place of disempowerment. I want you to begin to feel more empowered about your finances.

Here are two important questions to ask yourself: How do you feel when you worry and stress about money? Maybe frazzled, preoccupied, upset, overwhelmed, or agitated. Now, imagine your life with less worry and stress. How do you feel now? The truth is that when you're the one managing your money and in the driver's seat, you'll be in total control and feeling more empowered.

You can begin to reduce your money stress, today! I recommend you avoid these 5 financial faux pas to get you started:

1. An un-reconciled checking account: You're taking a big risk here if you never balance your account. To avoid bouncing checks and paying your bank big overdraft fees, reconcile your checking account "every" month when your statement arrives. You can use personal finance tools like Quicken to help you complete this task quicker and easier.

2. Racking up credit card debt: The average household with at least one credit card has nearly $10,700 in credit card debt, according to CardWeb.com. Credit card debt has total control over your cash flow and with average interest rates running in the mid to high teens, your just giving money away. Save up for the things you want and begin taking back your financial power. Create a plan of attack to eliminate your credit card debt and refrain from using credit cards until you become more disciplined with your spending.

3. Borrowing from your 401(k): I've heard people say, but you're paying yourself the interest, so what's the big deal! What you borrow from your 401(k) will not be invested for your retirement for the length of the loan, so you forgo all potential investment growth. I'm guessing that because cash flow was an issue, which is why you borrowed in the first place, that you likely have stopped contributions, so you'll forfeit any pre-tax benefit as well.

4. Guessing: Without a plan, you're only guessing about the real state of your finances. It's common for people to think they are spending less than they truly are. That's why it's crucial for you to get a crystal clear picture of how much you're really spending monthly. Take an accounting of your prior three months of spending. If you're missing some receipts, you can begin keeping a journal in order to track your spending going forward. Once you know your historical spending, write down a plan detailing your monthly spending for the remainder of the year. Be sure you're spending in alignment with your financial goals and income.

5. An Empty "What If" Account: Although I saved this for last, it's probably the most important. Not having enough money in your "What If," otherwise known as an "Emergency Savings Account" (ESA), will certainly increase your stress level and money worries. Your ESA serves as your safety net. It's there for unexpected expenses like medical emergencies, vehicle repairs, breakdown of a household appliance, sudden loss of a job, which are not included within your budget. Build this into your monthly savings plan. Strive for six to eight months of your expenses. It may take a few years for you to build up to your maximum goal, but step-by-step and you'll get there! You will sleep better at night knowing you have a safety net.

Start taking control of your financial life by making a plan to avoid these 5 money stressors. When you do, you can begin to reduce your money stress immediately.