Wednesday, June 7, 2023

How To Manage Financial Stress

Its Common To Spend On Happiness

How to manage financial stress

Despite the almost universal feelings of financial stress, almost half of Americans are not letting one spending influencer go by the wayside: their happiness.

Forty-nine percent of Americans frequently or sometimes get into financial trouble by spending on their happiness, with those finding the most joy from spending on shopping or hobbies. Spending to improve happiness resonates across generations, although its more common for Gen Z and millennials than Gen X .

Spending on so-called happiness should not be something we eliminate altogether, says Amanda Clayman, a psychotherapist specializing in financial therapy, in Robinhoods press release. Incorporating the things you love, and even the hobby that may help you cope with that financial stress, into your budget is a way to control the spending, she says.

Putting things you actually care about into your spending plan can be a transformational act, says Clayman, in a statement to Fortune.

Not treating yourself to the potentially small expense that may improve your overall happiness and well-being in the long run is not the answer, Dr. Dennis P. Stolle, the senior director of applied psychology at the American Psychological Association, told Fortune.

What Causes Financial Stress

The main causes of financial stress are typically from rising debt, losing a job and wondering how to pay bills, medical bills, or spiraling into a lifestyle you cant afford. All of these instances can be financially devastating.

But as you can imagine, financial stress and anxiety can be caused by many different circumstances. And how you handle it can be different from the next person.

Some additional causes of financial stress include:

  • Unexpected emergencies
  • Overspending and shopping

These areas are nothing to be ashamed about, even financially stable people can still stress about money as well and worry about their own financial future.

What Are Some Options If I Just Don’t Earn Enough To Meet My Budget

You might have to consider some big changes if you think the situation is long-term, such as relocating to a less-expensive home. But numerous government programs stand by to help as well with rental assistance, energy bills, medical bills, and even groceries. Contact your local social services agency to find out what’s available in your area.

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Grant Yourself An Allowance

While its essential to save aggressively, saving too aggressively isnt great for your mental health either. To avoid this, carve out a little extra change every week or month to give yourself an allowance just like your parents might have when you were a kid.

An excellent savings account will give you the freedom to make fun purchases or treat yourself from time to time. Not only will this help you stick to your new saving habits, but itll also make you feel better about your financial situation without sucking the fun out of your daily life.

Tip 3 Understand How To Deal With Financial Stress

Handling Financial Stress: 3 Tips to Help You Manage

19 Depending on your financial situation, you may not be able to handle stress very well. Often people turn to activities that can harm their physical or mental condition. Resorting to smoking, alcohol, or other ways might seem to be a solution to feeling better emotionally. But, these habits will only cause more problems and are detrimental to any progress you may have made.

20 Look for healthy ways to deal with stress, such as exercising, walking, listening to or making music anything that will be helpful for your relaxation and logical thinking. If you need assistance, get in touch with someone you trust or even a professional who will help you with your mental health.

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Watch: Combating Financial Stress

Are you hoping to go on a really nice vacation? By paying yourself first, you’re almost guaranteed to make sure money is there when you need it. That means you won’t have to scramble at the last minute. Your savings is Your get out of debt card, Your, I lost my job plan and ultimately Your stress reduction plan.

Another stress redactor is knowing there are many practical resources here at UNG which can help! Eating three meals a day is important, but in our current circumstance that may not be easy or even possible for all college students. Lets face it, food isnt cheap. On average, Americans spend $250 a month on groceries, which adds up to $3,000 over the course of a year. Thats a large sum of money for most, especially college students! The University of North Georgia is aware of this and wants to help ALL students. On all UNG campuses, there are food pantries available to every Nighthawk by simply presenting a UNG ID. If youre in need of food, they can help, but theres more than just food! The UNG food pantry provides things like, toiletries, cleaning supplies, school supplies, and clothing. Another resource that is available for students is academic support. College is challenging, but with 24/7 online course tutoring, face-to-face tutoring on all campuses and supplemental instruction support, UNG is here to support you along your educational journey.

Put A Financial Plan In Place To Reduce Anxiety About Money

While situational circumstances can occur that are totally out of your control, financial risk can often be mitigated with a comprehensive financial plan.

When you partner with a financial professional, theyll work to understand your goals and objectives, your risk tolerance and your time horizon, says Fitzmorris. Theyre able to run what if scenarios to help you better understand what type of risk you’re taking in situations when the market is doing really well, or when the market is not doing so well. If you have a plan in place, youll feel a lot more confident you can weather the storm.

We find that when clients have a plan in place to achieve their goals, theyre more resilient in the face of market volatility and uncertainty, adds Baustian.

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You Can Learn To Deal With Financial Stress

The National Institute for Mental Health defines stress as, how the brain and body respond to any demand. Financial stress can present as feeling overwhelmed, anxious, or frustrated whenever you think about your money. My grandmother would say, At my wits end! However, you can learn to cope with financial stress. Below are a few tips to cope with financial stress and anxiety.

When facing financial stress, dont bury your head in the sand. Rather, bury your head in a relaxing meditation to calm you before thinking about your money situation.

Dont tackle your money challenges alone. Enlist a trusted friend or confidante to be your support on this journey.

Let bygones be bygones. Rather, let buy-gones be buy-gones. Take time to forgive yourself for your past money mistakes and leave them in the past.

Set smaller financial goals to give yourself the adrenaline rush of accomplishment, success, and fulfillment. Then build on that success.

Create a spending plan that includes a line item for fun. The plan will help you tell your money where to go and the fun line items let you reward yourself.

Take a six-month sabbatical from one spending category that is not a need. During that time, use the money you save to help reduce anxiety in another area.

Lastly, remember you are not the first person to be in a financial challenge and you wont be the last. Be kind to yourself.

What Is Financial Stress And How Do You Cope With It

How to deal with financial stress

Key takeaways:

  • Money, work, and finances are top stressors for a significant number of people.

  • Financial stress can contribute to many physical and mental health problems, some of which may take a long-term toll on your body.

  • Taking steps to manage your stress and your finances can lower your risk for additional health concerns.

Do you lie awake at night worrying about credit card bills? Argue with your partner about whether you can afford a new car? Money issues are a big source of stress for many Americans. Financial stress can cause long-lasting physical and mental health problems. Getting control of your financial life and learning to manage stress is a top priority for healthy living.

In this article, well cover the causes and effects of financial stress and some strategies for coping with it.

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Financial Support If You Have A Low Income

Of course, financial problems can often be outside of your control. About 1 in 7 Americans lives in poverty. An estimated 42 million people may not have enough to eat. If youre struggling to meet your basic needs, you may be eligible for support through the government or a number of nonprofit organizations.

Look into support programs for people with low incomes through your state, county, or local government. You can also search for community organizations in your area. Most communities have food banks, for example.

The federal government has a list of benefit resources if youre struggling to afford housing, medical care or health insurance, and food. You may also qualify for special government benefits related to the COVID-19 pandemic.

If you need assistance applying for a job, search for organizations that provide free job search resources. This could include resume help or even training to learn new job skills. Resources such as Generation, mySkills myFuture, and My Next Move may help you get started.

Find Opportunities And Tools To Help You Today And In The Future

One great way to reduce your financial stress it to put much of your money management on autopilot.

First, take advantage of autopay options to reduce how many bills and payments you have to remember each month. At the same time, set up automatic savings plans to build an emergency fund for future economic downturns.

Leverage apps and other software to track your spending and find areas to cut back. There are many wonderful free ones available. Sign up for alerts from your bank or credit card providers to make sure you can fraudulent charges quickly.

Lastly, try to implement good financial management and planning and maintain that program beyond the downturn.

This is a turbulent time, but just know that it will end, says Eisenberg. The reality is that we have gone through one crisis or another every few years. This too shall pass.

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Tip : Take Inventory Of Your Finances

If youre struggling to make ends meet, you may think you can ease your stress by leaving bills unopened, avoiding phone calls from creditors, or ignoring bank and credit card statements. But denying the reality of your situation will only make things worse in the long run. The first step to devising a plan to solve your money problems is to detail your income, debt, and spending over the course of at least one month.

A number of websites and smartphone apps can help you keep track of your finances moving forward or you can work backwards by gathering receipts and examining bank and credit card statements. Obviously, some money difficulties are easier to solve than others, but by taking inventory of your finances youll have a much clearer idea of where you stand. And as daunting or painful as the process may seem, tracking your finances in detail can also help you start to regain a much-needed sense of control over your situation.

Include every source of income. In addition to any salary, include bonuses, benefits, alimony, child support, or any interest you receive.

Keep track of ALL your spending. When youre faced with a pile of past-due bills and mounting debt, buying a coffee on the way to work may seem like an irrelevant expense. But seemingly small expenses can mount up over time, so keep track of everything. Understanding exactly how you spend your money is key to budgeting and devising a plan to address your financial problems.

Pay Off All Your Debt

Manage Financial Stress

Our research shows that nearly half of Americans say their debt level creates stress and makes them anxious. But you dont have to live that way. Just imagine what it would be like if you didnt have to keep giving your paycheck to student loans, credit cards, medical debt, vacations and more. Seriouslyjust imagine!

When you know your why, youre ready to start attacking that debt with a vengeance! And Ive got a plan for how to do just that: Its called the debt snowball. Heres how it works:

Step 1: List your debts smallest to largest, regardless of interest rate. Pay minimum payments on everything but the little one.

Step 2: Attack the smallest debt with everything youve got. Once that debt is gone, take that payment and apply it to the second-smallest debt while continuing to make minimum payments on the rest.

Step 3: Once that debt is gone, take its payment, and apply it to the next-smallest debt. The more you pay off, the more your freed-up money grows and gets thrown onto the next debtlike a snowball rolling downhill.

Its worth mentioning: If youre in the middle of any kind of emergency , things may need to look a little different.

The best thing to do in that case is only pay minimum payments on your debt and focus on taking care of your Four Walls instead: food, utilities, shelter and transportation. This will help you stay afloat until things get back to normal.

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How Do You Relieve Financial Stress

Coping with financial stress and working towards correcting your issues will help you take control of your money.

Too often, we let money control us and let it dictate what we do, that it leaves our stress and anxiety through the roof. Instead, money should be working for you.

Below are a few ways to relieve your financial stress and feel more at peace.

Reach Out For Support

Try reaching out for support from your family and friends to help reduce stress. You might try attending a support group for people who are struggling with financial stress, too. Remember, you’re not alone. You can develop a system of trusted friends and family to help you stay optimistic about your finances.

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Get An Emergency Fund

An emergency fund is a savings account meant to cover unexpected expenses and financial emergencies. Although a car repair can be expensive and stressful, if you know you can tap into your emergency fund to cover it, a lot of the stress will go away. It is also easier to use the money in your budget the way you planned if you know you have the extra money in the bank ready to cover the unexpected emergencies that may crop up.

You should have at least $1,000 in your emergency fund until you are out of debt. Then you should aim to have three to six months’ living expenses set aside.

Building an emergency fund may seem tough at first, especially if you are struggling to make ends meet each month. Start by putting aside a small amount, whether it’s $10 or $100 each month, so you can build up your emergency fund. You may also consider selling any unused items around the house to build up that cash as quickly as you can.

Use Expense Tracking And Accounting Tools

Reducing Stress With Financial Wellness | N26

You can and should use budgeting tools to keep track of expenses and ensure that you manage your finances correctly. But, unfortunately, many people lose control of their finances just because they dont have a birds eye view of how much they spend or earn and think they have to live paycheck to paycheck.

Expense tracking tools and accounting software can help you determine:

  • How much money you make
  • How much money you spend on necessities
  • How much money you spend on things you dont really need

The bottom line: the right tools will give you critical information about your finances and make it easier to practice this next step.

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Resources To Help With Financial Issues

If you need outside help, a might be worthwhile. These are generally nonprofit organizations that can:

  • Advise you on managing your money

  • Help you create a budget

  • Coach you on how to get a copy of your credit report and scores

  • Help you develop a plan to pay down your debts

Visit the Financial Counseling Association of America to find credit counseling services in your area. Check each service out with your state attorney generals office and state consumer protection agency before making a decision.

Statistics Around Financial Stress

There is quite a few stats around financial stress, but these were just a few I came across that stood out to me.

  • According to the American Psychological Association , 72% of adults report feeling stressed about money, whether its worrying about paying rent or feeling bogged down by their debt.

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Set A Budget And Track Your Spending

Financial stress is often, at a fundamental level, caused by a disconnect between the money youre spending and the money thats coming in. You may be avoiding creating a budget and tracking expenses for fear of what youll learn about your spending, but creating a budget is the most important step toward making changes that improve your finances and reduce money-related stress.

Establish a budget that fits your monthly income. Then use a spending tracker or other money management tool to follow your progress. Youll learn about your spending habits and identify new ways to reduce your spending. These insights may spark some added worries depending on what you discover, but the knowledge you gain will put you in a position to make meaningful changes.

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