Financial stress is one of the top stressors in many of our personal lives and can take a serious toll on our mental health. A recent survey shows that approximately 64% of Americans report feeling stressed about money. Financial stress is a lot like physical and mental stress.
Many studies show that over time, stress wears you down. In general, chronic stress symptoms may affect your health—perhaps a source of a recurring headache, nightly insomnia, or an inability to concentrate. Chronic stress symptoms can affect your body, your thoughts and feelings, and your behavior.
Financial stress is very much the same. It can draw down on your financial wellness, increase financial anxiety, and cause a lot of worry about your overall financial situation leading you to be in a consistent state of fear and panic.
Money concerns can also severely impact relationships with loved ones, which can take even more of a toll on you. Financial stress is often cited as a contributor to fractured personal relationships.
But what if we told you that there are ways to reduce financial stress? When you actively take initiative to get control over your money, you can start easing some of that stress you may be feeling regularly.
Steps to Reduce Financial Anxiety to Improve Your Financial Health
When living expenses become overwhelming, or debt gets out of control, the financial strain increases. Typical concerns with financial health and wellness involve worries about debt repayment, managing living expenses, keeping up with housing payments, and more. When we think of money worries, it’s worth considering what is in your control.
Like with mental stress, focusing on things you can change will help reduce financial anxiety.
What are the personal finance matters you can change to reduce financial stress? Consider your housing—one of the key items for your overall safety and well-being.
If you can remove the anxiety of being unable to pay your rent, for instance, by building up savings or paring down debt, your financial situation will improve and help reduce financial stress.
Follow along as we share five steps you can take that are specifically aimed at controlling what you can to ease your financial anxiety, help you move toward financial goal achievement, and reduce money stress:
1. Take Steps to Build a Budget
Keep it simple by first making a list of all of your monthly expenses (money outflow), and consider essentials like housing, utilities, food, gas, and medical costs. Be sure to include any other outstanding items you have like paying down credit card debt or other loans.
Next, make a list at the amount of money you bring in each month (money inflow). Where do you stand each month? If your outflow is greater than your inflow, try to consider at least one small change that you can make right away. For example, is there a streaming service you can cancel? Can you reduce the amount of take-out meals you purchase? How about getting rid of that gym membership?
Budgeting isn’t always easy, but it can make you feel better about your life. One of the most powerful things you can do to relieve uncertainty and financial stress is to take a step back and make a plan. A budget can help you figure out how to meet both your short- and long-term financial goals. Think about it like a fitness plan: it’s not about dieting, it’s about getting healthy, staying healthy, and being ready for the life you want!
2. Reduce Financial Stress by Getting Support
When it comes to money stress, you don’t have to go it alone. Having a support system can help you reach your goals. Surround yourself with people you trust who will support your financial goals and want to help you succeed.
In addition, get as much financial education as you can and turn to trusted resources. All of us at GOLD are always here and standing by to help, but we’ve also got a great partnership with our friends at GreenPath Financial Wellness, where they are happy to provide you with education about finances such as budgeting, debt management, cutting costs, housing finances, and other matters that may relate to your personal financial situation.
3. Make One Financial Decision at a Time
When people are faced with multiple back-to-back decisions that test willpower, research suggests that their willpower can easily be depleted. Space out your financial decisions instead of making too many at once and becoming overwhelmed. Track your finances by keeping a daily list of how you spend your money and what your spending and saving habits are.
You may also benefit from keeping a “stress less list.” Take stock of your financial situation and where money causes you stress. Write down ways you and your family can reduce expenses or manage your money more efficiently. Then commit to a plan and review it regularly. Although this can be anxiety-provoking in the short term, writing a plan and sticking to it can reduce stress. If you’re having trouble paying bills or staying on top of debt, reach out for help by calling your credit union or bank, utilities, or credit card company to set up a payment plan.
4. Look at Your Financial Goals
When it comes to reducing financial stress, you may find that it’s helpful to understand your overall financial situation so you know how you can put your money to work to help you reach your goals. A few starter questions about your short- and long-term financial goals can help you get an idea of what you have to work with, what your commitments are, and what you have remaining to devote to your goals.
Set a specific and detailed goals that will encourage you to accomplish them. You may find that when you add an amount or set a timeframe for your goals it’ll be easier to track and see your progress and motivates you in achieving them. For example, instead of “save more money” you could “save $100/month for all of 2022 to have $1,200 to buy a new computer or laptop.”
Remember the budget you created from earlier? Look at that next. How much is already committed? Add up all the bills and expenses that you know you’ll have to pay each month. Be sure to include things like loans, minimum credit card payments, utilities, groceries, rent or mortgage payments, taxes, cable bills, etc.
Now, calculate how much you’ve got left for your goals. Think about what’s most important to you, and what you need to get there. What you decide to do with your discretionary (leftover) income is all about you and your goals.
5. Stay Flexible
Remember, nothing is set in stone, and you may notice that you’re making tweaks to your budget or your goals more often than not, especially when just starting out. But I promise, it gets easier and it will be worth it!
You can reduce your financial stress by staying flexible. You’re in control; you’re in charge of your plan and your goals. It’s always a good idea to pay off debt and to make savings a priority (pay yourself first!). You can always adjust your goals along the way, review your budget and make adjustments to trim expenses or direct money toward something different.
Connect with GreenPath
If you want to get serious about reducing financial stress, be sure to connect with our friends at GreenPath. They’ve got caring experts and offer free debt and credit counseling and can help you work on a Debt Management Plan that can lower your interest rates and fees and help you save money in order to pay off your debt faster.
Give them a call at 877-337-3399 to see how they can help improve your financial situation today.