Tips to Reduce and Cope With Financial Stress
Financial stress can damage your mental and physical health. Knowing how to not stress about money or how to deal with money issues you have already created is the key to feeling your best.
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Defining Financial Stress
Financial stress is an unpleasant feeling or an overwhelming feeling due to money. It can cause you not to enjoy other areas of your life and negatively affect your physical and mental health. For some people, it also negatively affects their relationships and how they carry themselves in everyday life.
Who Faces Financial Stress?
Financial challenges aren't limited to one type of person or someone in a specific financial situation. Anyone can experience it, but often people with lower incomes, partners who disagree on how to handle money, people with a lot of credit card debt, or those with unstable jobs experience it the most.
For example, someone with a lot of credit card debt can experience financial stress even if they earn a high income because even the minimum payments are too much to handle. The same is true of a high-earner who doesn't think twice about spending money. These actions can make it harder to stick with a monthly budget and pay your bills on time.
How to Deal With Financial Stress
Since almost everyone deals with financial stress, it's important to know how to deal with it. First, you should consider identifying and understanding your specific financial stress.
Identifying and Understanding Financial Stress
Determining how to deal with financial stress means figuring out the underlying factors. Why are you stressed?
Ask yourself the following questions:
- Do you spend money without thinking?
- Do you not make enough money to cover your bills?
- Is your monthly budget not properly set up?
- Do unexpected expenses cause you financial stress?
- Is your partner overspending and not considering your financial health?
- Are you over your head in credit card debt?
These are some questions to ask yourself to determine the underlying cause of your financial stress. When you know the root cause, you can create a plan to alleviate your financial worries.
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Correlation Between Financial Stress and Mental Health
At least 46% of people with overwhelming debt have poor mental health, and most agree that financial stress worsens their mental health. Overwhelming debt and financial struggles can cause anxiety and depression.
When your mental and physical health declines, it becomes harder to manage money, which creates a snowball effect. Eventually, you might realize that you can't manage stress or your money.
Symptoms of Financial Stress
Recognizing the signs of financial anxiety or stress is important so you can address them. Here's what to consider.
- Sleep Troubles - Financial anxiety can cause you to toss and turn at night, thinking about your financial situation and what to do about it.
- Disinterested in Self-Care - If you have poor mental health, you may not take care of yourself as much. You might lose interest in everyday things such as grooming, eating, or caring for the house.
- Weight Gain and Loss - Financial stress can also affect your appetite. For example, you might eat away your financial anxiety or stop eating. People that are depressed about money often stop eating due to a lack of appetite or the desire for self-care.
- Unexplained Physical Problems - Your mental health struggles can manifest as physical symptoms too. For example, you might experience an onslaught of headaches, stomachaches, lethargy, or have more serious issues like high blood pressure or even heart disease.
Money Stress Coping Mechanisms
If you determine that your financial health is causing significant stress, consider these coping mechanisms.
Inventory of Financial Issues
Sit down and determine what's causing your financial issues. This can be triggering, so do it at a time when you're feeling strong and can handle the news.
Pull your bank and credit card statements, reviewing your spending habits to see what's causing the money troubles. This isn't a time to blame yourself or feel stressed. Instead, you're arming yourself with the knowledge to create a plan to relieve stress.
Combat Financial Problems With a Budget
Next, create a monthly budget that you can stick to that tackles the problem debt. Finally, if you have a lot of debt, and can't meet your minimum payments, contact your credit card company or any other creditors and ask for a payment plan. Many companies will work with you if they know you'll make good on the debt instead of filing bankruptcy.
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Creating a budget is the first step, but you must implement it and track your progress. Each month, check-in and see if you stuck to your budget. Were you able to save money? Track your progress on eliminating the problem debt, and revisit your budget if things aren't going as planned.
Reduce Money Problems by Reducing Expenses
When you have financial stress, you often have too many expenses. Use this time to reduce your expenses. It's easier than you might think.
Here are some common areas to consider:
- Find a cheaper cell phone plan
- Eliminate unnecessary subscriptions
- Shop for less expensive insurance
- Create a weekly meal plan and stick to it
- Shop grocery sales and use coupons
Create Goals and Checkpoints
You aren't going to solve your financial stress overnight or even in a few months. The key is to create goals and set up checkpoints so you understand your financial situation.
If you're single, set a monthly date to review your bank account, credit card debt, and other financial accounts. You could also set up a support system to have someone check in with you and keep you accountable.
If you're married, set a monthly money date to check in with one another. Talk about each partner's emotional well-being and review your bank balance, credit card statements, and progress on your financial goals to determine if you should keep the same path or adjust.
Don't be afraid to ask for emotional support when dealing with financial stress. An outsider, even if just friends or family, may provide practical advice or help reduce your emotional tension so you can regain control of your finances.
Here are a few ideas for a support system.
- Finance Professionals - Financial professionals aren't just for the rich; they can also help people facing financial difficulties. For example, a financial advisor can help you create a budget, learn how to get out of certain situations, and alleviate some of the financial pressure you feel.
- Mental Health Professionals - If you're experiencing financial depression or anxiety, consider seeking help from a mental health professional. Addressing your mental health issues can help you make better financial decisions and take steps to fix your financial situation. In addition, when you reduce stress overall, you'll have a clearer mind for important decisions.
- Family and Friends - Creating your own support group can also help with stress related to finances. Find people with strong financial goals and an understanding of personal finances to keep you accountable. Don't let your self-esteem get in the way of letting a trusted friend or family member know you need help; they may be able to provide what you need.
Self-care is the key to overcoming stress. Don't play the blame game or reduce your self-worth. Give yourself some TLC. Take walks, exercise, eat right, get adequate sleep, and spend time with people you love. When you have money concerns, you shouldn't focus on them 100% of your time; take time for yourself so you have the strength to create better money management skills.
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Is There a Way to Prevent Financial Stress?
Financial stress doesn't have to be inevitable; there are steps you can take to lower your stress levels and prevent feeling stressed about finances.
Chisel Away at Debts
Don't let debt get out of control after taking inventory of your debts; create a plan to eliminate them. If you aren't sure how to get out of debt, talk to a financial professional. The key is to take small steps, focusing on one debt at a time. When you pay one debt off, move on to another until you've made your budget more manageable.
Saving and Emergency Funds
An emergency fund is the best way to deal with emergencies, such as a job loss or medical emergency. Your emergency fund should have three to six months of expenses, but that can take a while to save; rather than overwhelming yourself with the amount you must save, take it one step at a time.
Set small goals to save $100, then $500, and eventually $1,000+. Each time you reach a goal, celebrate your progress.
Additional Income and Side Hustles
If a lack of money causes your financial anxiety, consider making additional income. You can start a part-time job or a side hustle. If you want to do something flexible in your free time, consider gigs like driving for Uber or DoorDash.
Avoid Emotional and Impulsive Spending
Retail therapy isn't therapy and causes additional stress. Don't let yourself spend impulsively to make yourself feel better. If you see something you want, give yourself 48 hours. Then, if it's still on your mind, figure out how to fit it into your budget so you don't cause more financial difficulty with impulsive spending patterns.
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Focus On Your Mental Health
Mental health and money go hand-in-hand. Taking care of your mental health will help you develop strategies to stop struggling financially.
- Apply Gratitude - Change your mindset about money. For example, instead of saying, 'I have to pay these bills,' say, 'I get to pay these bills' because, let's face it, if you didn't have accounts, you wouldn't have a roof over your head, food to eat, or utilities to keep you comfortable.
- Give to Others - When you feel good about your finances, consider giving to others. Giving to others can improve your emotional well-being, even if it's only a few dollars or something pre-owned.
- Treat Yourself to Something You Really Need - When you're concerned with money, it doesn't mean you shouldn't give yourself the things you need. Instead, reward yourself from time to time. This doesn't mean overspending or impulsively spending; rather, it means showing yourself that you matter and are doing your best.
- Apply Mindfulness - Throughout this entire process, be mindful. Take things slowly, think about your decisions before making them, and give yourself grace if you make a mistake.
Recognize Financial Stability Takes Time
Good financial health doesn't happen overnight. The key is making small, consistent changes, recognizing your progress, and moving forward. Those baby steps will eventually relieve your financial worries if you don't give up.
Financial stress must be handled, or it can ruin your overall health and well-being. Financially struggling doesn't mean you've failed, nor does it make you a bad person. Find healthy ways to deal with your money worries and enjoy life because it's short.