Have financial concerns been stressing you out lately? You aren't alone.
Between a pandemic and an unstable economy, many Americans feel financial pressure. A March 2022 study by Thrive Global and Discover found that 90% of participants said money was a current source of stress. Furthermore, around 65% feel they can't overcome their financial difficulties.
So what should you do to cope with the stress money brings? First, take a deep breath. We put together this guide to help you on the path to becoming financially stress-free.
What is financial stress?
Defined as money-related worry, anxiety, fear, or emotional tension, financial stress can come from losing a job, being unemployed for an extended period of time, or the inability to pay bills, etc.
Because everyone's financial situations are different, what causes stress can vary from person to person.
How financial stress affects your health and wellbeing
Financial stress can take a toll on your health and relationships with others. Some signs to look out for include:
insomnia/ trouble sleeping
weight loss or weight gain
depression and anxiety
unexplained aches and pains
withdrawing from others
arguing with loved ones about money
Ways to cope with financial stress
Getting a handle on stress is key to moving forward if you're overwhelmed by financial burdens. Anxiety and depression tend to steal our ability to devise practical solutions.
Here are some ways to fight the stress money may bring:
Evaluate your financial situation and make a plan
Take some time to analyze your current financial situation and pinpoint what's stressing you about money.
From there, identify areas in which you and your family can reduce monthly expenses. Maybe that means cutting back on takeout food or your daily coffee run.
If you're having trouble paying bills, ignoring them won't make them go away. Reach out to your bank, utilities, or credit card company to see about setting up a payment plan.
It's normal to feel more anxiety initially, especially when creating a budget and decreasing expenses. However, committing and sticking to it will help tremendously in the long run.
Prioritize what you can control
Accept that you can't control everything that is causing you stress or financial troubles. Instead of wasting time and energy on letting those things overwhelm you, put your focus on what you can control.
For example, your monthly grocery budget. Find ways to save money on your grocery bill. Maybe that means simplifying meals, shopping around, or cutting coupons.
Talk to someone
Money is still a taboo topic for many people, making it extremely hard for many of us to open up about it, especially when we have financial troubles. However, bottling the stress and anxiety inside can cause more harm than good.
Talk to someone you trust. Maybe, it's a friend or family. Perhaps, it's a church member. Or, even a counselor or therapist.
Manage overall stress
Improving your financial health is a marathon, not a sprint. In other words, it's not going to fix itself overnight. But taking even the smallest steps is a step in the right direction.
To succeed, you need to find ways to manage stress in general. Practicing self-care will help you find focus and clarity while decreasing anxiety and worry. Some ways to manage stress include:
Preventing financial stress
One of the best ways to avoid financial stress is to take steps to prevent it from happening. While some things are out of your control, like a job loss or a major medical event, there are simple steps you can take to manage your finances.
Make a budget
A budget is a strategy that helps you prioritize your spending by assigning your monthly income to different categories, like mortgage, groceries, car payments, savings, etc.
Creating a budget is one of the easiest ways to understand where every penny of your money goes while giving you financial stability by:
paying bills on time
building an emergency fund and savings account
saving for major purchases such as a home, car, or vacation
keeping you in control of your money
Keep track of expenses in the Notes app on your smartphone, in a Google spreadsheet, or even in a notebook to record money coming in and going out. There are also several online budgeting tools you can use like Mint, You Need a Budget (YNAB), or Goodbudget.
Recognize spending habits
Identify patterns when it comes to how and why you spend money. Recognizing these patterns can decrease bad spending habits like impulse buying or going over your allotted budget.
In addition, knowing how you spend your money can help determine if other issues are going on. Studies show, for example, a link between compulsive shopping and depression. It's important to address not only spending habits but also underlying issues.
Reach out for professional help
Carrying all the what if's around can cause financial anxiety. Working with a professional can help you plan for the future.
There are a few different options available:
A financial advisor works with you on financial goals, saving money, and decreasing debt. An advisor can be a broker, money manager, insurance agent, or banker.
A financial planner focuses on how to help you reach your long-term financial goals. They can cover many parts of your finances, including savings, investments, insurance, retirement, college savings, taxes, and estate planning.
A financial coach teaches money management skills, like building savings or paying down debt, to help improve your financial health.
It's no secret that many of us are feeling financially stressed. But it's important to remember there are ways to ease the anxiety and not to feel so overwhelmed with money.
Just remember to first take that deep breath.