How to Deal with Financial Stress
Now more than ever, I notice that many people, regardless of age and background run into stress – more so financial stress. Even before the pandemic, financial hardships can be found everywhere, and this is showing more than ever how we can change our ways to not have financial worries.
Did you know that 78% of Americans are living paycheck to paycheck every month? Another study by the American Psychology Association found that 72% of Americans feel stressed about money. These statistics are just the tip of the iceberg, and can even produce other strains on other areas such as relationships and marriages, healthy lifestyle, and even how to get ahead in your career.
I have been fortunate to not have financial stress during my life, and I am very passionate about personal finance. As a young child, I got very interested in personal finance through educating myself on topics such as debt, and how to get out of debt through different methods. I now am living a debt free lifestyle and a part of the FIRE movement (Financial Independence, Retire Early). As a hobby, I teach courses in my community on how to get out of debt, build wealth, and educate on new ways on how to eradicate financial stress in order to improve your mental health and well being.
The following are a few tips on how to work towards eliminating financial stress, and towards the end, I will be including a few resources I highly recommend looking into to assist further.
Evaluate & Realize
What is directly causing the stress in terms of financial concern? Is your stress rooted in missed payments of rent? Not able to keep food on the table, or even student loan debt accumulating? Whatever the direct reason you have financial stress, you need to evaluate and realize that this is something you can overcome with a few changes, if you commit. Also by realizing that the sooner you tackle that said stress, then the better your situation will get – not worse. In addition, I want to include how maybe you don’t have piles of bills or debt, but your situation is just saving money for a rainy day or emergency – these tips will benefit you as well!
Set Goals & Commit
After you realize the root of your stress, you are able to set goals and commit to them. The best way to do this is through writing them down somewhere that you can visibly see every day. Another idea is that I recommend you find someone in your social circle that can hold you accountable, and is also good with their own money. This person can be a friend, relative, or even someone from work (please, I can not stress this enough, make sure they are good with their own finances.) Your goal is entirely dependent on your personal situation, so it can range from paying off your credit card, paying rent on time, or even saving for a new car.
Make A Budget
Not everyone likes to budget, and I entirely understand that sentiment. Although, the only true way to tackle financial stress is seen through budgeting your income. The best way I recommend to budget is a “Zero Based Budget” – a great resource I recommend is the Every Dollar Budgeting App. A Zero Based Budget is essentially your (income-expenses=0). This allows you to put money where it needs to go, by pre-planning your monthly budget. This is highly successful, and can basically guarantee you savings every month if you follow the budget! Don’t forget, that budgeting is totally different for everyone, and there are many other apps and systems in place today that may work better for your situation. Budgeting allows you to stay disciplined in order to reach your financial goals as well. Another major part of budgeting is being money conscious. I know so many friends with financial stress, but continue to dine out, or buy clothes every month. These are little things that you can either limit how much you do it, or even stop entirely (especially, during the pandemic, this was the best opportunity to cut spending!). If you’re not the best budgeter, I recommend trying to create a budget and test it out for 3 months. During that 3 month time frame, see what you spend over or under, and adjust accordingly. This is a great way to practice budgeting along with seeing where your money goes (you might even realize you are spending way too much in certain places).
Create A Plan to Pay Off Debt & Bills
What I think is my favorite part of budgeting is setting more goals and milestones, along with putting a plan into action. The best way I recommend creating a plan is to have trackers – yes, like the ones for fundraisers! If you are trying to save $1,000 for an emergency fund, it may seem very daunting to reach that. Although, if you can try to save $20 a week or more, that may be more attainable to reach, and not be as stressful in your budgeting. This “tracking method” can be applied to anything, and is also helpful when you are just getting started.
Celebrate & Repeat
Once you reach your goal, I think it is something that is worth celebrating. Maybe instead of doing a steak dinner, treat yourself with a coffee or ice cream cone. This is crucial to reward yourself, but also, think about repeating the steps in order to reach another financial goal of yours.
Again, these are just a few very simple tips to assist you in eliminating your financial stress and help you reach your goals financially. If anyone has any questions or comments, please leave them in the comments section below, and I can answer them for you! If this post does well, I may even continue writing content around financial stress.
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Getting Your Finances Back On Track After Quarantine
Is money a stressor for you? Have you ever done anything to help yourself budget or to avoid feeling overwhelmed by anxiety that may be triggered by finances?