Stress can have a major impact on your overall emotional, mental and even physical health. Unfortunately, personal finance is one of the most common causes of stress for many people – but there is some good news. With a few simple changes, it is possible to get a better handle on your finances and reduce your levels of stress. Read on for five tips on how to reduce your stress around money, so you can feel better and start managing your financial concerns in a healthier way.
1. Crunch the Numbers
Many people experiencing financial difficulties may be so stressed out by the whole situation that they avoid looking at key numbers, because they’re just too scared to face the numbers. They might be unsure how much money they’re spending every month, or reluctant to track their income vs. bills ratio. They might not even know exactly how much money is in their bank account.
Does this sound like you? Don’t be afraid! In this case the old axiom really is true – there’s nothing to fear but fear itself. The anxiety around not knowing what numbers you’re working with, on top of your general personal finance concerns, will only contribute to your overall financial stress. Grab a pen and paper, or use an app or online program, and make a record of how much money you have, and how much is coming in and out every month. Then, give yourself a pat on the back, because you’ve just taken the first step to managing your financial stress!
2. Plan for the Future
Buying a house. Flying across the country to see your family. Getting the kids through four years of college. It can be stressful to think about future financial expenditures. What if there’s not enough money in the bank when the time comes? Well, take a deep breath! There’s no need to stress – all you need to do is plan.
Today there are tons of budgeting apps that help you visualize your savings goals and help you plan how much you’ll need to save – monthly, weekly, even daily – in order to plan for the future and reduce your financial stress. And it’s OK if sometimes it takes longer than expected to reach a financial milestone, or if other spending or an emergency gets in the way. That’s all part of life! The most important thing is to always have your goals set out in a concrete way, so that you can feel more empowered and in control of your personal finance.
3. Understand Debt
Debt by itself is not a “good” or a “bad” thing. Many people who are financially healthy use debt to help them buy a home, remodel their kitchen or pay for college. The problem – and the stress! – comes from getting trapped in the debt cycle, wherein a person must continuously borrow, without any sustainable way to pay back their loans or credit card.
If debt is responsible for all or part of your financial stress, you’re certainly not alone. Many Americans now find themselves in debt, and it’s a major stressor around personal finance. Start by reading more about the debt cycle, to understand why continual borrowing will only mean more debt and stress in the future. Then, take a thorough audit of your finances; working out what you have, what you owe, and where spending can be curbed. Debt can be complicated and stressful, but educating yourself and evaluating your finances is a fantastic first step to start your journey to becoming debt-free.
4. Save for Emergencies
You’ll rarely want to dig into your rainy day emergency fund, but simply having this money set aside can make a huge impact on lowering your financial stress every single day. The traditional advice for an emergency fund is to keep three to six months of living expenses at-the-ready in a savings account, but for many people this just isn’t financially possible.
Instead of focusing on whether or not you have enough money for an emergency fund, just start small. It might be a few coins in a jar, or an extra savings account where you put bonuses and birthday money. Even if you don’t have a huge emergency fund, knowing that the money is there should you need it will help you feel less financial stress when thinking about the future.
5. Ask for Help
One of the best ways to reduce your financial stress costs absolutely no money but will start making you feel more clearheaded and confident around personal finance almost immediately. All you need to do is ask for help. An HUECU representative, for example, can walk you through the ins and outs of banking, loans and debts, to see which financial solutions are right for your unique financial situation.
You can also check out upcoming classes and workshops for the community, which cover topics like understanding credit and credit scores, how to prepare to buy a home, and the fundamentals of personal finance. Workshops like these are free and can make a big impact on upping your financial education while reducing your financial stress.
Join our town hall next Friday 04/10 at noon to hear some of the ways we are here for our members, including free financial coaching and other services to support your current needs. Bring your questions! Register here.