Who isn’t stressed about money sometimes? A 2022 survey reveals very few people.
According to Thriving Wallet, a financial literacy platform, a whopping 90 % of people say their finances impact their stress levels, and their stress has a direct impact on their ability to enjoy everyday activities or achieve life milestones.
While stress may be commonplace these days, it’s not good for you. Follow the tips below to manage financial stress in your life.
Financial Stress Management Tips
1. Retool Your Budget
Some anxiety comes from feeling as though you can’t make changes in your life. It’s made worse when your finances are influenced by outside factors (like inflation) that you truly cannot control.
Let’s be honest: there’s no way for you to impact the way the central bank regulates the economy. The fluctuating markets are far out of your scope of influence. So, let’s narrow your focus to things you can control: your budget.
You can make small changes to the way you run your household by budgeting. A budget empowers you to take charge of your spending, limiting expenses that make it harder to achieve the goals you set.
2. Cut Non-Essentials and Save an Emergency Fund
Another way to feel in control of your finances is through saving. Having a well-stocked emergency fund can help you handle unexpected expenses that you don’t think to plan for in your budget.
Forget to fill up the meter and get a parking ticket? You can use these savings to cover your fine, plus any other unexpected auto, household, or medical expense that comes out of the blue.
But how can you build an emergency fund? Your budget helps you find these savings. All you have to do is look at non-essential spending to see what you can limit on entertainment, streaming services, takeout, sporting events, clothing, and travel.
How much spending do you need to eliminate to find savings? You don’t have to live the austere life of a monk to be prepared in an emergency. A far more balanced approach to your finances is easier and provides protection. The general rule of thumb is to save about 20% of your paycheck, so crunch these numbers and make the equivalent changes in your spending.
3. Know Your Backup
During a busy month full of unexpected expenses, you can use more of your emergency fund than you can replenish. Finding a backup in these situations can help you beat the stress of coming up short of what you need. Many people choose a line of credit as their preferred backup in these unusual circumstances.
To learn more about a line of credit, you can check out a website like MoneyKey. At its core, a line of credit is a revolving loan that comes with a credit limit, not a loan amount. This slight distinction means you have ongoing access to your account, as long as you have funds available.
Every purchase ties up a portion of your limit, and this amount is only released when you make payments. That means you can draw against your limit on a revolving basis, as long as you make timely payments.
4. Automate Bills
Outside emergencies, most of your expenses arrive on a predictable schedule. If they are also fixed (this means the amount you owe doesn’t change month to month), you should automate these bills.
Automating fixed, regular expenses takes the onus off you to remember to pay them on time. Your bank will transfer this money from your bank without ever missing a due date.
Keep this in mind if you live paycheck to paycheck. Your bank will try to transfer the money even if you don’t have it in your account.
Why is that? Your bank’s automated system is good at remembering due dates, but it’s bad at making independent decisions on its own. While a human in charge of transferring funds would recognize you’re low on funds and stop the payment, an AI program can’t without failsafes. It will attempt to transfer funds, which might cause you to overdraw your account.
What about expenses that fluctuate according to your usage, like your water and heating bills? Without a fixed schedule and amount, you can’t automate your bills. Instead, you’ll have to remember to pay them the old-fashioned way. Write down their due dates and set up reminders on your phone to ensure you don’t forget to send this money.
5. Talk to Someone
Last, but not least, talk to someone you trust, if not a family member directly involved in your financial situation, then a close friend. Remember how 90% of people admit to feeling stressed about their finances? There’s a good chance that whoever you talk to will know what you’re going through because they’re struggling in their own way.
You know what they say: misery loves company. It’s relieving to know that you aren’t the only one feeling anxious about money. You can also lean on these people to help you stick with a budget and the other tips listed above. Ask them if they’re willing to be accountability partners and work on fixing your finances together.
If you can’t stop thinking about money, talking with friends may not be enough. You may have to consider getting the professionals involved.
Check out free credit counselling and speak to a mental health expert. Debt and credit counsellors share practical ways to improve your finances, informed by experience and tailored for your unique situation. They can help you rebuild your savings and pay down debt.
Therapists, on the other hand, give you the tools to manage your stress levels productively. You can complain to them about your ongoing money owed, and they can share coping mechanisms to deal with chronic anxiety.
The Takeaway
Chronic stress caused by money may be normalized simply because everyone is feeling anxious these days. But that doesn’t mean you should make peace with feeling stressed about your finances for the rest of your life.
Talk to someone you trust and get these worries off your chest as you follow a budget to reclaim control over your finances. The five tips shared here today can help you reduce your overall stress levels so you can enjoy everyday activities and achieve life milestones.
