5 ways to deal with and reduce financial stress
Financial stress is an emotion many people feel, but they may not know how to deal with it.
Consider these numbers from a study conducted by the Global Financial Literacy Excellence Center at the George Washington University and the FINRA Investor Education Foundation:
- 60% of people say they feel anxious when thinking about their personal finances.
- 50% of respondents indicated feeling stressed when discussing their finances.
Feeling stressed about money can be draining mentally and emotionally. And ongoing money stress could even lead to physical ailments as well.
If you're experiencing financial stress, here are some tips for coping with it effectively.
1. Pinpoint your biggest money stressors.
The first step in dealing with financial stress is learning where the problem lies. For example, common financial stressors include:
- Lack of budgeting.
- Overwhelming debt.
- Income challenges that make it difficult to pay bills.
- Disagreements about how to manage money with your partner.
Step back and look at your money situation to figure out what's causing your financial stress. This kind of self-evaluation is important for putting any money struggles you might be having into perspective.
2. Focus on what you can control.
Some sources of money stress you can tackle head-on; others, you can't do anything about. When dealing with financial stress, it's important to worry about the things you can control and let go of the things you can't.
For example, you may be stressed about your grocery bill going up because of rising inflation. Since you can't do anything to change the prices the grocery store charges, it's better to focus on what you buy and ways to save.
Focusing on what you can change, rather than what you can't, gives you a measure of control over the situation.
3. Go back to basics.
Sticking to the basics can help when dealing with financial stress. That includes things like:
- Making a monthly budget that's realistic, based on your income and expenses.
- Keeping track of how and where you spend money each month.
- Automating deposits to a savings account each payday.
- Creating a plan for repaying debt if you don't already have one in place.
- Getting caught up on your most important bills if you've fallen behind.
- Staying in touch with your creditors to discuss options for managing debt.
These are all fairly simple things, but they can be overwhelming if you're weighed down by financial stress. So, here's a tip: Pick one item to start with. Once you complete that item, move on to the next thing on the list.
Getting ahead financially often means taking things slow and steady, crossing items off your list as you go. If you stay committed to completing each item on your money checklist, that can help you eliminate sources of financial stress one at a time.
4. Automate what you can.
Automating your finances can reduce money stress if you're no longer worrying about bills being paid late or how you're going to be able to save money. If you've got a budget in place, you can schedule automatic bill payments from your bank account. This can help you avoid late payments and the fees that go along with them.
You can also automate deposits into a savings account. This can help you to build an emergency fund, which can alleviate the stress of not being able to pay for an unexpected expense in cash. This doesn't have to be a large amount either. Even $10 or $20 per pay period will help you grow your savings over time.
5. Talk to a professional.
If financial stress continues to weigh you down, consider talking to someone who could help you come up with solutions. This could be your banker, for example, or a certified credit counselor. Or you may talk to your financial advisor about things you can do to improve your money situation.
Having an outside point of view may help you to spot issues or challenges you might have overlooked. And talking to someone who understands what you're going through can be a stress reliever if you're able to unburden some of your concerns.
Money doesn't have to be a headache. Dealing with financial stress proactively can help you get on track to reaching your goals.