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How to Understand Financial Stress
If you’re worried about money, you’re not alone. During these difficult times, many people across industries and around the world are facing financial stress and uncertainty. Whether your concerns are related to job loss, rising wages, unexpected expenses, or a combination of both, money issues are one of the most common problems in modern life. Even before the impact of the global coronavirus pandemic and the economic downturn, a survey by the American Psychological Association (APA) found that 72% of Americans worry about money at least sometimes. The recent economic downturn means that many of us are now facing financial difficulties and challenges.
Like any serious stressor, financial stress can have a profound impact on your physical and mental health, your relationships, and your overall life. Financial stress can affect your sleep, self-esteem, and energy levels. It can trigger feelings of anger, shame, or fear, cause conflict and conflict with loved ones, worsen sadness and mood swings, and even increase depression and anxiety. You may develop unhealthy coping mechanisms, such as drinking, using drugs, or gambling, to avoid stress.
In the worst cases, financial stress can lead to suicidal thoughts or actions. But no matter how hopeless your situation may seem, we can help. By addressing your financial challenges, you can find ways to overcome financial stress, relieve stress, and regain control of your finances and life.
The Effects of Financial Stress on Health
While we all know that there are more important things in life than money, when you are experiencing financial hardship, fear and anxiety can take over your world. They can damage your self-esteem, make you feel depressed, and fill you with a sense of hopelessness. When financial stress becomes severe, the mental, physical, and social effects of financial stress can be overwhelming.
Financial stress can cause
Insomnia or other sleep problems. Nothing can keep you up at night more than worrying about unpaid bills or missing money.
Weight gain (or loss). Anxiety can change your appetite, causing you to overeat or skip meals out of fear of saving money.
Feeling depressed. Living with financial stress can make anyone feel depressed, helpless, and unable to concentrate or make decisions. A study by the University of Nottingham in the UK found that people with high debt are twice as likely to experience depression as others.
Anxiety. Money can be a safety net, and without it, you can feel vulnerable and stressed. All the worry about unpaid bills or missing money can cause anxiety symptoms like a racing heart, sweating, shaking, and even panic attacks.
The negative impact of poor financial health on poor mental health
Several studies have shown a cyclical relationship between financial stress and mental health problems like depression, anxiety, and substance abuse.
• Financial stress can have a negative impact on your mental health. Worrying about debt or other financial problems can make you feel depressed or anxious.
• Worsening mental health makes it harder to manage money. You may find it hard to concentrate or unable to cope with the increasing amount of debt. Or, your income may be cut by missing work hours due to stress or depression.
• These financial difficulties can lead to further financial problems and worsening mental health problems, among other things. It is consistent with the downward spiral of worsening financial problems and worsening mental health.
No matter how bad your current situation is, there is always a way out. These strategies can help you break the cycle, reduce the stress of financial problems, and regain stability.
Tip 1: Talk to someone
When you have financial problems, it’s often tempting to just give up and try to solve them on your own. Many of us even think that money is a negative topic that shouldn’t be discussed with others. You may be embarrassed to reveal how much money you make or spend, embarrassed by financial mistakes you’ve made, or embarrassed by not being able to provide for your family. But holding back will only make your financial stress worse. In today’s economy, many people are struggling without doing anything wrong, and you may find that others are more understanding of your struggles.
Get professional advice
Depending on where you live, there are many organizations that offer free advice on solving financial problems, whether it’s managing debt, creating and sticking to a budget, finding a job, negotiating with creditors, or applying for financial assistance or assistance. (See the link in the "Getting More Help" section below.)
Whether you have a friend or loved one or you can confide in someone for emotional support, it's always a good idea to get some valuable advice from a professional. Asking for help is not a sign of weakness, and it doesn't mean you're failing as a provider, parent, or spouse. It means you're smart enough to recognize that your financial situation is causing you anxiety and that you need to seek treatment.
Tip 2: Save Your Money
If you're living beyond your means, you may think you can reduce stress by falling behind on your bills, avoiding calls from creditors, or ignoring bank and credit card statements. But in the end, denying the reality of the situation will only make things worse. The first step in creating a plan to address your financial problems is to chart your income, expenses, and spending for at least a month.
Various websites and mobile apps can help you track your financial progress over time, or you can work backwards by collecting receipts and studying your bank and credit card statements. Of course, some financial difficulties are easier to fix than others, but taking control of your finances can help you regain a sense of control over your situation. While this process may seem difficult and painful, thinking clearly about your finances can also help you regain a sense of control over your situation.
Include all income. In addition to wages, include any alimony, benefits, child support, or interest you receive.
Track all your expenses. When you’re facing a financial crisis and rising bills, grabbing a cup of coffee on the way to work can seem like a small thing. But expenses like small bills can add up over time, so keep track of all your expenses. Knowing exactly how you spend your money is key to creating a budget and a plan to solve your financial problems.
List your debts. Include all past due debts, outstanding debts, minimum payments, and any money you owe to family or friends.
Tip 3: Make a plan and stick to it
Just as there are many different types of financial problems that can cause financial stress, there are also many possible solutions. Strategies to solve your problem may include cutting back on your spending, lowering your interest rates and credit card bills, limiting your online spending, accepting government benefits, filing for bankruptcy, or finding a job.
If you are overspending, losing focus on your spending, but still spending more than you earn, you have three options: increase your savings, reduce your expenses, or do both. To achieve any of these goals, you need to make a plan and stick to it.
• Identify your financial situation. Once you have a budget, you will be able to identify the financial problems you are facing. When you are stressed or anxious, you may have a lot of credit card debt, not enough money to pay off your debts, or spend a lot of money on unnecessary purchases. Or it could be a combination of issues. Create an individual plan for each person.
• Find solutions. Discuss ideas with family or trusted friends or ask for financial advice. You may think that talking to your credit card company and asking for a lower interest rate will help solve your problem. Or you could reorganize your payments, get rid of your car loan, downsize your house, or talk to your boss about working part-time.
Tip 4: Create a monthly budget
Whatever your plan is for reducing financial stress, creating and sticking to a monthly budget can help you stay on track and regain a sense of control.
• Include everyday expenses, such as groceries and transportation, as well as monthly rent, mortgage, and utility bills in your budget.
• For things you pay for every year, like car insurance or property taxes, divide them by twelve to have a monthly budget.
• If possible, try to account for unexpected expenses, such as medical bills or prescription costs if you are sick, or home or car repairs.
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