Are you stressed about money? You’re not alone. According to a study by Capital One, 73% of Americans rate money problems as the number one factor contributing to a more stressful life.
But it doesn’t have to be bad. In fact, situations can always be worst.
It comes down to mindset, practicality, and honesty. Keep reading to learn more about financial stress and how to conquer it once and for all.
What is financial stress?
Your financial health and well-being influence your mental and physical states of being.
Financial stress is like any other stress, but it’s related to money. It’s an overwhelming psychological state of worry, anxiety, and tension. More emotion than reason.
Signs of financial stress include excessive feelings of worry, uncontrollable fear, difficulty sleeping, withdrawal from life, mood swings, and more. Some feel hopeless about the future, and others feel shame and embarrassment.
If left unattended for too long, it can interrupt your life. It can take a toll on your mental health, physical health, and well-being. It can even spill over into your ability to love yourself or healthy relationships with loved ones.
What causes financial stress?
Money problems lead to financial stress. Excessive worry about money and things you can’t control. Perhaps you don’t have enough money or have large amounts of debt that you don’t know how to pay. Perhaps you have enough money but you’re scared to spend it.
Financial stress can appear during stressful times like buying a house, financing a car, and approaching retirement. Or it can be present all the time.
Tips for dealing with financial anxiety
Luckily you have choices. There’s a way to manage stress and get your finances together.
Here are nine tips to get you started:
1. Talk openly about your money worries
Money can be a taboo topic. It’s common to feel awkward talking about how much money you have or how you spend it. But thinking you need to do this alone increases your stress and leaves you isolated.
Consider opening up to a friend, family member, or spouse about your struggles. Talking openly about your emotions with someone you trust can help you cope with your financial stress and put problems into perspective.
There’s nothing worse than going to sleep at night and not being able to fall asleep because you feel a burden of financial responsibility on your shoulders.
If you’re talking to your partner, aligned your financial goals, and start a family budget to reduce your fears and stress about money as a family.
If you’re speaking to a friend, they might be able to help you see problems from a different perspective and come up with a positive outcome for your financial needs.
2. Keep your emotions separate from money
We tend to connect to money through our emotions. Unfortunately, these emotions can override logical thinking. Strong feelings can motivate you to take action that you regret later.
If you’re an emotional buyer, the urge to go on a shopping spree can be strong and feel therapeutic. However, in reality, it elicits a vicious cycle of dysfunctional money habits.
When you’re in a situation that makes you want to spend money without reason, give yourself 24 hours to sleep on the decision. Practice delayed gratification. Leave the item on the shelf and walk away. Or better yet, close the tab on your computer.
Try to talk to a friend instead. Maybe take your dog for a walk or review your budget. Then, come back to the decision later and see if your feelings have changed.
3. Create a budget and review your finances regularly
When you’re feeling stressed about money, the quickest and easiest fix is understanding your cash flow. It puts you back in the driver’s seat to make decisions for your money. It probably doesn’t look as bad as you thought it did anyway. But if it does, you’re in a better position to fix it.
One helpful exercise is to track your expenses for a month. This will put everything into perspective. You’ll see how the tiny things add up over time. You’ll learn where to cut expenses and gain control.
Only you can decide on what you want to cut out, what you need to keep and have a plan for meeting your financial goals. If you’re managing money with your partner, sharing the responsibilities can help reduce financial anxiety.
4. Build a financial safety net
An effective way to deal with financial stress is to save more money. Build an emergency fund where you have a minimum of 3 – 6 months cash available for unexpected situations. For example, if your monthly expenses to cover your basic needs are $2000, aim to save $6000 – $12,000 into your emergency fund.
How much cash you keep is really up to you. However, if you’re more fearful of unexpected emergencies, such as losing your job or having to pay for car repairs or medical bills, it could be wise to save more as an added buffer.
If you don’t have an emergency fund in place, start small and keep adding to it until you get to an amount that leaves you feeling less stressed about money and more confident that you can offset financial shocks to your wallet.
5. Put your financial goals into motion
While there can be many triggers to financial anxiety, several solutions and outcomes are possible to put a plan in place for your financial future.
When thinking about your financial problems, pinpoint what leaves you feeling stressed. For example, maybe you have student loan debt that’s accruing interest or car payments that take up a significant portion of your monthly budget. Make a list and brainstorm solutions for each of your money worries.
If you’re anxious about your student loans, refinancing for a lower rate could help lessen the burden. You could also look at ways of increasing your monthly payments by cutting down on unnecessary expenses in your budget or starting a side hustle to bring in extra income.
Get creative and track your progress. As you get closer to your goal, you’ll feel your stress start to turn into excitement.
6. Change your focus and remain positive
With money stress, we can forget about some of the fantastic experiences money has bought us. While positive thinking doesn’t pay your credit card bills, appreciating money can help calm your fears of scarcity and shame.
Developing a positive money mindset takes time and patience. First, try journaling—practice gratitude for the good things money has bought into your life. Then, reframe your focus and attention while building an abundance mindset.
7. Educate yourself about finances
Money worries and conflicting priorities can make future decisions difficult. Calm your fears through education.
You might be considering whether you should invest in your retirement account or pay off your credit card debt first. Or maybe you’re saving up for a deposit on a house, and you’re not sure if you should pay down the car loan.
There’s no one size fits all answer, as it’s all about what works best for you. Start with reading financial books and listening to podcasts about money. You could also speak to a financial advisor to help you navigate difficult life choices about your finances.
8. Stop wasting money and comparing yourself to others
You’ll never outspend lousy money habits. Focus on you. Two people can’t have the same financial goals and bank statements. Everyone has to walk their path.
Set your sights on your needs, wants, and goals. Figure out where you can cut wasteful spending and maximize how far your dollars go.
9. Take advantage of opportunities to grow your income
When we’re in survival mode, money worries can hold us back from progressing in other areas of our life that could improve our financial situation. So now is a good time to negotiate a pay rise, put yourself forward for that promotion, or start a business.
Stop stressing. Don’t let the symptoms of financial stress keep you from living. You can improve your financial situation at any time. Just give yourself time and deal with the stress upfront.
Learn how to manage the financial stressor of your life. Rather than getting stressed out, be proactive and honest about your financial situation. Then set a goal and make a plan to reach that goal.
Stress management is important. Look for ways to reduce stress and take time to relax. Create a positive mindset and practice some relaxation techniques or meditation. Make a financial plan and stick to it.
So, are you ready to get your finances back on track?
Theresa is a personal finance blogger. She writes content for busy professional women to take control of their money and investments. She enjoys reading, traveling, cooking, and writing. Her work has been featured on GoBanking Rates, Your Money Geek, Savoteur, the Corporate Quitter, Thirty Eight Investing, and more.