7 Effective Strategies to Overcome Financial Stress
There are a lot of uncertainties in today's economy. So, it's not really that unusual for a lot of Americans to feel worried and anxious about money. In fact, according to a survey conducted by the American Psychological Association (APA) in 2015, money is the top cause of stress in the U.S. Now, before you start to shrug off the impact of stress caused by financial issues, you should know that financial stress is not just about sleepless nights worrying about bills to pay.
Effects of Financial Stress
Financial stress can cause a host of health problems such as high blood pressure, upset stomach, headaches, skin problems, diabetes, and arthritis. In addition, less money in the bank means you're less likely to get yourself checked and treated. Most people in financial stress tend to cut corners in different areas in their lives, even the important ones such as healthcare. However, delaying medical care or forgoing it together can lead to more serious health problems and bigger expenses which, of course, causes even more stress. It's a vicious cycle.
Unhealthy Coping Behavior
Aside from physical health problems, financial stress can also negatively affect your mental health. In fact, studies have shown that individuals dealing with financial stress have a higher chance of experiencing mental health issues such as depression than those who are free from debt.
A survey conducted in 2014 by the American Psychological Association (APA) found that people in financial distress tend to engage in unhealthy activities such as drug or alcohol abuse and overeating in order to deal with stress.
Obviously, something must be done to get people out of this vicious cycle. Dealing with your financial problems should not only get you out of debt, but it should also enable you to focus more on other important areas in your life. The less debt you carry, the more you're able to stay healthy (physically and mentally), and the better you're able to enjoy life. Below are some strategies you can implement to help you take control of your finances and reduce your money stress.
Identify your Financial Stress Points
What exactly are you stressing about? Evaluate your financial situation and figure out where the money is causing you stress. Is it a lack of retirement funds? Too much credit card debt? Too many bills to pay? Lack of income? Can't get approved for personal loans? List down all your financial stress points. You can use this list as a starting point to determine your priorities and create a plan.
Determine Your Financial Priorities
Knowing your financial issues leads you to the next step, which is figuring out which ones to tackle first. What's at the top of your priority list? Create a budget because this allows you to decide when and where your hard-earned money will be spent. You can use it to calculate how much you'll need to cover immediate expenses and how to divide the rest to help you achieve your financial goals.
Determine What You Can Change
By determining your financial priorities, you're also able to see debt traps. This means you can stop any budget "leaks,” also known as “unnecessary spending.” For example, if you like getting coffee from Starbucks every morning, then you're going to need to cut back on that because the money will be better spent elsewhere (like on your retirement fund).
Speaking of income, part of your financial issues may be due to a low income. If you are currently not making enough to cover your monthly bills, then you'll need to decide what you can do to change this. One option would be to find extra sources of income. This could mean selling some of your stuff on eBay or Craigslist or getting a side gig.
Devise a plan that can help you change your financial situation. Just make sure that it's realistic. The same goes for your financial goals. The plan must be something you can follow through with until you are able to achieve your goals. If you are overly ambitious, you might find yourself abandoning your plan in just a few weeks or months.
Create an Emergency Fund
The importance of an emergency fund cannot be stressed enough. If you don't know what it is, an emergency fund is a savings account that is specifically for covering unexpected expenses. Financial emergencies like emergency medical care or unexpected car trouble are undoubtedly stressful. However, having money in the bank that you can tap into to pay expenses like these can reduce a lot of the stress you're feeling. Instead of juggling money around, you'll be able to follow the budget that you created. Experts recommend that you should have at least $1,000 in your emergency fund until you are debt-free. Afterward, you should have around three to six months' living expenses in your fund.
Track Your Expenses
Creating a budget is not the same as keeping it. Tracking your expenses is a good way of ensuring that you're sticking to the plan. Not only will it help you understand where your money is going, but it will also make it easier for you to stay resolved. How so? Well, tracking your expenses can also help you keep an eye on your progress. Changing your financial situation will be hard. But being able to see the steps you're taking towards financial freedom, no matter how small, can give you that extra motivation to stay on course. Plus, finding positives in your financial situation can help reduce your anxiety which, in turn, makes it easier for you to stick to what you're doing.
Change your lifestyle
One of the best ways to deal with any kind of stress is to change your lifestyle. Living a healthy life can reduce the negative impact stress has on your body and mind. This means eating nutritious foods, avoiding junk food, and not overeating. A healthy diet can boost your physical and mental game, enabling you to better deal with financial problems. The same goes for adequate exercise and sleep. All of these things will ensure that your body and brain are in the best shape possible to deal with financial stress.
More importantly, don't deprive yourself of leisure activities. You need to take breaks to enjoy yourself without feeling guilty or worried. There are plenty of free activities that can engage your body and/or your mind, providing you with much-needed entertainment. With an improved mood and a relaxed mind, you're much more capable of tackling your financial situation with a clear mind and an even stronger spirit.
Recognize How You Deal With Financial Stress
All of us cope with stress differently. When the going gets tough, some of us are more likely to put our heads in the sand while others will turn to unhealthy activities such as heavy drinking, emotional eating, or gambling. There are some who become depressed while others become angry. All of these behaviors can take its toll on you and your family. It can even cost you your job. If you start exhibiting any of these behaviors, consider getting outside help from a counselor or psychologist. Get ahead of the problem before it adds to what's already on your plate.
