7 Tips for Dealing With Financial Stress
Nearly two in three adults identify money as a notable source of stress in their life, and roughly half of adults have experienced negative financial effects as a result of the coronavirus pandemic, the American Psychological Association (APA) reports in its 2020 Stress in America™ survey.
Dealing with money stress affects your physical health, mental health and relationships. In this article, we discuss the impact of financial stress while offering a mix of practical financial advice and thoughtful mental health tips to help you when dealing with financial stress in your life.
The impact of financial stress
Financial stress is real, and it affects a lot of people. If you’re wondering how to deal with financial stress, you’re not alone. For example, consider these statistics:
- Ahead of matters related to work, relationships, health and other concerns, financial challenges are the leading source of stress for American employees. (PwC)
- Approximately 90% of individuals agree that financial considerations negatively affect their level of stress each day. (Thrive Global and Discover)
- Roughly 65% of people feel that they can’t overcome their financial difficulties. (Thrive Global and Discover)
- About 34% of individuals’ financial stress negatively impacts their sleep. (Thrive Global and Discover)
- For 43% of people, their current financial situation prevents them from thinking about the future. (BlackRock)
7 tips for financial stress management
First thing’s first: take a deep breath. No matter your circumstances, there are things you can do to ease the financial burdens in your life. By taking small steps to better manage your finances, seeking support from others and adopting a positive mindset, you can take control of your finances. Keep reading to discover seven practical tips for financial stress management.
1. Track your spending.
Have you ever wondered where all your money’s going? Tracking your spending is a great way to find out. It may seem scary, but documenting your expenses enables you to plan for predictable expenses and spot ways to save on extra expenses. For example, you likely have to pay for things like housing, utilities and car gas every month. But, maybe you can cut back on your coffee or Amazon purchases. Tracking your spending is an empowering part of financial stress management; once you know where your money’s going, you can do something about it.
2. Create a monthly budget.
Tracking your spending also helps you create a realistic monthly budget. Budgeting might feel intimidating or restricting, but it’s actually liberating. With a budget, you have a monthly plan for predictable expenses related to housing, utilities, debt, etc. and spending guide rails for expenses related to food and entertainment. The best thing about a budget is you have a plan for your money—and you might find ways to cut your spending.
Here’s a list of example budget categories and their percentages of your monthly expenses:
- Savings: 20%
- Housing: 25%
- Debt (credit cards, student loans, etc.): 10%
- Food (groceries and restaurants): 10 to 15%
- Utilities (water/sewage, gas, electricity, cable/internet, etc.): 5 to 10%
- Transportation: 10%
- Insurance (auto, dental, health, life, etc.): 15 to 20%
- Entertainment and personal spending: 5 to 10%
3. Seek support from family and friends.
Of people who recently handled a stressful financial situation, 60% relied on the support of their family to cope with their stress, according to Thrive Global and Discover’s joint report. Confiding in a family member or friend can ease the burden of dealing with financial stress. In fact, having emotional support helps us cope with our problems, the APA reports.
Friends and family can not only be a source of support during difficult times, but also a source of financial knowledge and accountability. If you’re wondering how to deal with financial stress, consider reaching out to a friend or family member who prioritizes smart financial decision-making in their own life.
4. Start small when working toward a financial goal.
Are you looking to pay off your student loan debt? Get rid of your credit card debt? Buy a new car? Save for a vacation? Afford the house of your dreams? Congratulations! These are all excellent financial goals. Sometimes, however, dealing with the financial stress of a large savings or debt repayment goal can be overwhelming. To deal with this, start small; put a realistic amount toward your goal each month and revisit the goal every few months, or at least once per year.
After a while, you might be able to put more money towards your vacation, credit card payment or student loan debt. Starting small helps you build the habit of saving or repaying debt so when you have more money to put toward your goals, the decision comes easily.
5. Set up automatic payments and payment alerts.
Plenty of bills are due monthly, but somehow they still manage to sneak up on us. If forgetting to pay your bills stresses you out, consider setting up automatic payments. This way, you’ll never miss a monthly bill. You can set up automatic payments through your online bank account or directly through the supplier, such as your credit card company or local utility company. When you use this financial stress management technique, you have one less thing to worry about.
If you’re not ready to set up automatic payments, the next best thing is to use payment alerts. Setting alerts—either on your calendar or through the bill payment site—can help you remember to pay your bills on time.
6. Do your best to stay positive.
Positive self-talk is one way to cope with stress, the Mayo Clinic reports. When it comes to money management and stress, it’s easy to let negative thoughts creep into your mind. Do your best to stay positive, and try reframing negative thoughts when they come.
Here are some examples of how you might reframe a negative thought into a positive one when dealing with financial stress:
|Negative Thought||Positive Thought|
|I can’t afford anything.||I’m capable of living comfortably within my means.|
|I have way too many student loans, and I’ll never pay them off.||I’m grateful for my education and will make extra payments on my student loans when possible.|
|Having a budget is restricting.||Having a budget helps my finances stay on track and shows me what I can afford.|
|I’ll never be able to save for a vacation, let alone retirement.||With a realistic plan, it’s possible for me to achieve my savings goals.|
|I’m alone in my financial struggle.||I can reach out for help from those I trust.|
7. Practice gratitude and celebrate small victories.
After you make your next purchase or loan payment, pause for a moment to practice gratitude. Maybe you’re grateful for the groceries you bought because you’re excited to make a new meal. Or maybe you’re grateful you made the loan payment because you’re one step closer to being debt free. Regularly practicing gratitude is linked to health benefits and stress relief, according to experts’ research from the University of Southern California. Making a habit of gratitude helps you savor what you have and appreciate victories small and big, from starting a budget to buying your first home.
Learn more about managing your finances
Financial stress is real, but there are many ways to manage it so you can live a happy, healthy life. We hope this article makes you feel more equipped to deal with financial stress. To read more about managing your finances, check out our other Fresh Insights articles.
If you want to learn about Cadence Bank’s personal finance solutions, contact us today.
This article is provided as a free service to you and is for general informational purposes only. Cadence Bank makes no representations or warranties as to the accuracy, completeness or timeliness of the content in the article. The article is not intended to provide legal, accounting or tax advice and should not be relied upon for such purposes.