Research shows that overall health and wellbeing is directly correlated to financial health and wellbeing. And while it is possible for finances to stress us out, it’s also possible we can take action to help reduce the stress.
The difference between stressing out about finances and a more “calm” approach is all about having information to build up short- and long-term financial habits and skills that lead to greater financial well-being. Here's some advice from our partners at GreenPath Financial Wellness.
How does financial stress impact a person’s life?
The impact of financial stress is a daily challenge for many people. Based on GreenPath’s sixty-year experience serving clients with financial wellness counseling, some of the biggest challenges they hear from clients stem from uncertainty.
People face uncertainty about how to meet monthly living expenses, how to prioritize cost of housing in the face of any income changes, as well as financial strain being felt by the newly unemployed or furloughed as well as those still working but facing an uncertain future.
Rising prices on everyday essentials as well as household debt also contribute to financial stress. Being faced with growing debt balances, late fees and high interest rates, or even collection calls, makes for an extremely challenging situation. This kind of financial stress can increase worry and anxiety, compromise getting a good night’s sleep and overall physical health.
Financial stress can also impact family relationships.
As an example, a young family shared with GreenPath how their financial challenges, including getting a pre- foreclosure notice from their mortgage lender, caused tension in their relationship – leading them to work with GreenPath to get options to manage their finances.
Another client shared his journey from “swiping like a ninja” with high interest credit cards, to grappling with nearly $50,000 in consumer card debt. You can read more about their stories here.
What are some healthy habits to help manage financial stress?
Financial health improvements can start with building better money habits, and celebrating the small wins.
- For instance, from setting a simple spending plan to setting realistic saving goals, being your own cheerleader is actually a good way to reinforce your new habits, which in turn makes it easier to stay on track if you hit a bump in the road at some point.
- Budgeting doesn’t have to be difficult. Learning new spending habits, and building savings are choices that can change your life. They can affect your overall well-being by reducing stress levels.
Debt can be especially stressful to a household’s overall financial picture. Some tips to reduce the stress of debt include:
- Know how much you owe.
- Write down the total amount of all your debts, monthly payments, interest rates and due dates. Limit credit card use and curb discretionary spending
- If possible – supplement income with extra hours, a second job or side hustle to help manage rising prices for household necessities, build up savings and/or resume payments on debt.
- Choose a debt payoff strategy that works for your situation — perhaps the Snowball method (paying off smallest debts first) or Avalanche method (paying more on debt with the highest interest rate).
- Many people who speak with GreenPath consider a Debt Management Plan which helps you pay off unsecured debt in 3 to 5 years.
- Don’t go it alone when it comes to debt. GreenPath can work with your creditors to bring your accounts current, lower interest rates, and eliminate fees. More of your payment goes toward reducing your account balance and you save money on interest.
Take a Closer Look
It pays to take a close look at how financial stress might be impacting your overall mental health. Connect with a caring financial counselor to conduct a free financial counseling session for options to reduce your financial stress.
If you are ready to manage, and eventually eliminate, your debt, turn to GreenPath for a free financial resources.