Is your mind flooded with financial worries when you try to sleep each night? Most probably, that’s anxiety eating you up because your career isn’t going anywhere or you’re falling behind a certain mortgage. Almost everyone is affected by financial stress at some point in their lives. It manifests in various levels of intensity.
Financial concerns have been proven to cause anxiety. That’s especially true for most parents. And, that’s understandable granted the uncertainties of the economy today.
In a certain Washington Post poll, over 50% of the respondents said that they’re worried ‘a lot’ about losing their job. Such numbers just underscore how finances are a huge source of anxiety. The American Psychological Association’s annual surveys have consistently concluded that money is the first cause of stress for over 70% of Americans.
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Impact of Financial Stress on a Person’s Well-Being
A person’s financial situation has a significant impact on their emotional and physical well-being. Biologically, the human body reacts to the different kinds of stress in the same way – fight or flight. The constant flood of hormones like adrenaline and cortisol can result in multiple health issues.
WebMD lists finances as a stressor that’s capable of triggering long-term diseases and busting your budget even more. It’s a major area of concern.
Psychologists make use of the term ‘Money Anxiety Disorder‘ to refer to the sense of financial fear. As stress levels over finances increase, health problems also increase.
Those who stress over their financial situations too much may experience:
- Depression
- Feelings of denial
- Panic
- Anger
- Headaches
- Anxiety
- Loneliness
Financial stress can cause or worsen other conditions like:
- Weight gain/loss
- Substance abuse
- High blood pressure
- Eating disorders
- Insomnia
- Diabetes
- Heart disease/attack
The emotional feelings stirred up by financial stress can cross over into your relationships with your loved ones and cloud them. Additionally, the anxiety consumes almost every aspect of your daily life.
Fight Against Financial Stress
Yes, financial stress is inarguably unpleasant. Thankfully, there never lacks a way that one can work around it, regardless of how hopeless and desperate the situation seems.
Remember, worrying will barely solve anything. But, finding out how you can overcome financial stress will. You’ve got everything you require to fight back! This all-encompassing guide takes a closer look at what causes financial stress and how one can better their situation.
A Glimpse of What Causes Financial Stress
Here are five common causes of financial stress.
1. Overspending
If you’ve financial stress, the chances are that your expenses are often greater than your income. Maybe, you’re taking payday loans, taking some cash from your retirement fund, or maxing out on your credit.
Spending unintentionally affects almost everyone. Despite your best intentions, advertisers and marketers win your heart. Sooner, the stress from purchases you had made catch up to you.
2. Debt
Doesn’t it feel terrible to be indebted? You might even feel disgrace or shame.
Often, that destroys relationships between family members and friends. Paying up a debt off a significant portion of your income over a long time is likely to stress you out. Mental health studies indicate that a person in debt is more likely to have mental issues than one who’s not in debt.
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It’s a helpful program designed to walk you through everything from cleaning up your credit to protecting your money and more. It’s the perfect solution if you’ve had chronic issues with debt and can’t seem to get out.
3. Losing Control of Your Finances
Lacking a financial plan can lead to stress. You may feel that you’ve lost control over your finances because you don’t have any financial anchor or goal.
4. Paycheck to Paycheck Lifestyle
Perhaps, you’re among those that live paycheck to paycheck. You’re always counting days and hoping that you’ll make it till the next payday.
Maybe, your basic supplies are replenished every payday as your salary is entirely wiped out paying off debts and expenses.
5. Market Volatility
An unsteady economy can lead to extreme fluctuations in the job market. The potential of losing your job can be a scary reality. In turn, that causes financial stress and insecurity.
How Do You Overcome Financial Stress?
The real key to overcoming financial stress is changing your money habits, regardless of how much you earn. You can only achieve financial freedom by managing your money properly. Follow these practical tips to overcome financial stress.
Know the Enemy
The first step towards overcoming virtually any challenge is identifying the underlying problem(s).
Financial issues are not an exception.
Financial stress is almost always the result of another problem. It’s important that you define that problem in order to find a solution which is ideal in the long run.
For instance, unemployment or low income can result in using credit for basic expenses.
Having a child is another common cause of financial difficulties.
Addictions to alcohol, recreational drugs, video games, and gambling often lead to a significant drain on your income. Additionally, you can have financial stress when you realize you have not saved enough for retirement.
The cause of your crisis might not fit into any of those categories. It could be more complex than the problems mentioned earlier.
Regardless of that, it’s imperative that you identify the underlying issue(s).
Assess the financial situation you’re in. Most financially anxious people refuse to acknowledge their current economic situation. What they don’t realize is that they’re only perpetuating the issue.
Spend Reasonably
Financial stress comes about when your lifestyle doesn’t match up with your income. After identifying the underlying problem(s), the next step you can take is to remedy several financial concerns.
Accept the factors that you don’t have control over.
Start using the highly recommended, effective remedy—a sustainable budget.
We can liken creating a budget to turning the lights on when you’ve been in the dark. A monthly spending plan will enable you to track where your money goes. It’ll now be much easier to ensure that you’re spending only on things that matter the most.
The list of your expenses should reflect accurately on the reality that you’re living with. People are often deluded into thinking that they’re aware of where their money is going.
But, when you decide to take time and tally up your purchases, you might be shocked to realize that your spending doesn’t match up with what you assumed their priorities were.
It’s an excellent idea to track your cash flow. You’ll find it a lot simpler to analyze your budget critically. You’ll have an easy time identifying where you can save cash more practically.
Make a point of asking yourself some tough questions. Must I eat out this much in one month? Do I need to have that after-work drink? Can’t I bear not seeing that friend for a little while?
Perhaps, you can’t visit a sporting supply store without purchasing something. Then, stop visiting it. Don’t perceive it as taking on financial burdens. Instead, see it as part of living with what you can afford.
Define Your Priorities
To overcome the financial challenges weighing you down, you should clearly define your personal priorities.
That might include giving your family a better lifestyle, paying off that balance on your credit card, or paying for a certain home improvement project. Consider the financial obligations which trigger stressful feelings.
Having well-defined, non-negotiable priorities will make the tough financial decisions that you’ve been facing a lot easier.
In case you hit another conflict of spending options, all you’ll need to do is refer to your list of priorities. You should make use of this list as the ultimate guide for your financial decisions.
If you’re stuck for the first priority, you can try focusing on getting one particular problem under wraps. For example, you can pay off the lowest credit card balances.
Decide first to shave down the most crucial expenses.
Changes Take Small Steps
Regardless of what is causing the financial stress that you have, the solution is likely to involve increasing your income or reducing the expenses.
After doing the math, you’ll realize that you need to make a very significant change to your lifestyle to get yourself back on track. Most likely, it’ll be something that you wouldn’t want to do.
But, making small changes can also help relieve yourself of financial stress.
Big changes are often much harder to motivate yourself towards and make them happen.
Instead, try identifying the smaller steps you can take to move closer. Look for those small areas where you can reduce your expenditure.
Craft A Financial Plan
You’ve already identified the small steps you can take to achieve financial stability. You should now formulate a realistic plan to help you achieve those huge, overarching goals you wish to accomplish.
You’ll, thus, need to identify and write them down. As well, you’ll have to establish where you currently stand in relation to the goals you’ve listed.
All of that, along with your budget, will enable you to determine regular, small payments which are more manageable and doable than trying to make one massive purchase.
That’s usually where most people slip up. The idea here is to take charge and clinch the perfect balance.
Avoid making the payment routine so simple that it becomes very easy to let it slide or brush it off. However, that doesn’t mean you make it so ambitious that it becomes next to impossible to achieve.
Regularly Review Your Financial Plan
As with most other situations, digging oneself out of a financial crisis isn’t as simple as crafting a plan and pledging to stick to the same. Some details may slip out.
Unexpected complications might spring up, making it challenging to stick to the plan.
Taking that into account, it’s vital that you review how the plan is turning out and identify any problems. You’ll then be able to tweak things and make them better.
Are your finances showing any improvements?
Is the progress towards your goals happening as you planned?
If that’s not the case, you’ll have to look back through everything and define where something went wrong.
Find out why it went wrong.
You might realize that your old habits were easy to avoid at first, but things began to get difficult. Ascertain that you’ve set out a realistic plan. You shouldn’t strain yourself too much.
Maintain A Positive Mindset
Your mindset can play a significant part towards overcoming financial stress.
It can motivate you to fix any financial crisis you’re in. Manage your emotions. Don’t bog yourself down with thoughts of never paying off your debt.
People have been in even worse financial challenges. Focus on the amount of stress that decreases as your debt get smaller.
Have a strong belief that you can solve any financial problem you have. Avoid overly ambitious goals which you’ll probably abandon soon.
Solve what you can today. In the meantime, stay at peace with what you can’t.
Be Accountable
Take up the responsibility of strictly following the plan you’ve devised and implementing changes.
You can lean on your relationships to stay on track.
Hard tasks become easier with support from friends and/or family. Share your goals. No one better can remind you of your goals and hold you accountable than someone you trust, love, and respect.
Don’t Overthink Things
Take the practical steps that you can. Overthinking or indulging your anxiety won’t alleviate your financial concerns.
If you realize that you’re too worried, take one or two deep breaths and think about an entirely different thing.
Take one step back and think about good things that are free. Remind yourself that things like friendship, love, spirituality, and passion bring true happiness, yet they’re freely available.
Reach Out for Help
Should you find yourself always struggling, you can try reaching out for assistance.
Various government initiatives have been put in place to offer free support to those overwhelmed by financial stress. Financial specialists or coaches could be of excellent help, too.
At times, just getting the issue off your chest can be a big relief. The solution might be as simple as chatting with someone else (friend, relative, or job colleague) who’s better with finances than you about your financial situation.
You shouldn’t be so proud that you can’t seek the help you require.
Note: Get-Rich Schemes Are Not a Definite Solution
Don’t be lured into thinking that get-rich schemes are sure to solve your financial stress.
Having more money won’t solve your problem outright. In fact, more money can bring about more financial stress. That isn’t always the case, though.
But, it shouldn’t surprise you to know that most billionaires are stressed out, as well.
Four Elements Fueling Financial Anxiety
Below are several things that fuel anxiety over money. If any of these factors are fueling your financial anxiety, it’d only be wise to find appropriate solutions.
1. Anxiety Over Other Issues
At times, financial stress isn’t even about money.
Case in point, some people fear that they won’t be valued anymore. Aging, relationships, and health are powerful feelings which hide behind financial anxiety.
It has been noted that even those with ample financial resources tend to worry about money. A sense of belonging and emotional connection with family and/or friends can help lower financial stress levels.
2. Shame
Many people feel shame around anything to do with finances. That, in turn, fuels stress.
This shame grows to become an emotional ‘glue trap’.
Sometimes, you might feel ashamed that you should have done or known better when it comes down to money. This feeling often leads to ‘money avoidance‘. With time, one becomes unwilling to deal with matters of finance.
Make an effort to let go of this shame.
3. Lack of Information
Lacking solid information is known to intensify financial stress. Panic can be triggered by not knowing what you’re dealing with.
Although it might sound simplistic, your financial stress can decrease once you get an idea of the amount of money you currently have for retirement and the amount you’ll require.
You might be pleasantly surprised when it dawns on you that you’re in a better position than you think. Consulting a financial adviser will help with finding out the exact position you’re in.
Books to Become a Personal Finance Pro
4. Misguided View of Retirement
People need to rethink how they perceive retirement. Panicking over retiring at a particular age won’t help. In fact, that’s outdated and doesn’t fit today’s reality.
It’s just unrealistic to think that you can work for 35 years and fund a 35-year retirement.
Most psychologists advise people to consider shifting to more modest lifestyles to lower the stress levels.
Parting Words
Don’t let financial stress consume most of your life.
Things might look somewhat bleak right now. But, following this guide can place you on the path to a stable financial future.
The benefits of fighting financial stress (paying down debts, saving more, etc.) will improve your bottom line, and overall mood, too. You’ll be able to enjoy life more when you can worry less about money issues.
Should you become overly anxious about money, make use of techniques like meditation, yoga, and deep breathing to alleviate stress. Also take a look at our list of 170 stress management techniques.
Finding support from those close to you can be extremely fulfilling, as well. Plan for tomorrow. But, don’t worry too much about it.
Try to stick to the plan you create. Start making those small changes. You’ll be amazed at the lasting impact they will have on your future.
Spend smart, invest well, and save some. Most importantly, stay positive. By taking heed of the above tips, you’ll be free from financial stress sooner than you realize it.
