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Does thinking about money stress you out? If so, you’re not alone. A 2015 study by the American Psychological Association found that 72% of people had felt some sort of financial stress in the past 30 days. Financial anxiety is real, and if you’re suffering from it, then that anxiety can damage your health and well-being. It doesn’t have to be that way! Here are five ways you can start reducing your financial anxiety today.
1. Know Your Finances
Do you know how much you have in your bank account? Do you know the balances on your credit cards? If not, then every time you pay for something at a restaurant or supermarket is probably a stressful experience. If you want to reduce some financial anxiety immediately, start tracking your financial information more closely. Check your bank account balance regularly; ideally, you should have an account you can monitor online or through an app. You should also know the balances you have on your credit cards. Having this information easily accessible will allow you to keep close tabs on your accounts, and it’ll help reduce some of the anxiety you have in making daily financial decisions.
2. Make a Budget
Another way to lower your financial stress is to have a budget. Surprisingly, most people eschew household budgets. In a recent study, researchers found that fewer than half of all Americans are using a budget to help manage their finances. If you’re managing your finances by the seat of your pants, you’re surely stressed out! If you make a budget, you’ll know exactly how much money you have coming in each month, and you’ll know how much you have to pay out in expenses. This will take the guesswork out of each financial decision you make, thereby helping to reduce your anxiety.
3. Set Financial Goals
Another reason that your finances may be stressing you out is because you cannot figure out how you’ll ever achieve anything with the money you make and the bills you have to pay. One way to help reduce this sort of anxiety is to set clear financial goals. What do you want to accomplish financially in the next six months, year, or five years? Do you think you’ll want to buy a new car or purchase a home? Do you want to go back to school to get an advanced degree? If so, you should determine how much money you’d need to save in order to achieve these goals. Additionally, you should also determine whether you’d need additional income to reach your financial goals. If so, you could more hours in your current job, or adopt a side hustle such as Lyft or Uber. In any case, setting some financial goals and determining how to achieve them should help to lower some of the financial anxiety in your life.
4. Plan for Contingencies
What would happen if your car broke down tomorrow and needed to be repaired, or you lost your job and were unemployed for several weeks? Do you have the money on hand to get through an unexpected financial setback? The sad fact is that fewer than 40% of Americans have enough savings on hand to manage a $1,000 emergency. The inability to deal with a sudden financial problem no doubt contributes to people’s high level of anxiety. Therefore, if you want to reduce your financial stress, start planning for contingencies.
Ensure you have enough money on hand to cover emergency home or automobile repairs. You should also consider how much money you’d need to cover basic expenses for a month or so if you lost your job. Additionally, if you’re worried about unexpected mishaps hobbling your business, or how expensive damages could affect your home or property, you should also evaluate if you have enough insurance. Taking positive steps like this could help ensure you’re prepared for the unexpected and reduce your financial anxiety in the process.
5. Get Help
When it comes to financial anxiety, you should never go it alone. If money issues are stressing you out, you should seek out trusted experts to provide you the financial advice and assistance you need. Credit counselors, for example, can help you determine the best ways to tackle all the problems you’re facing due to excessive debt. Additionally, a good accountant can assist you with budgeting, and help you deal with federal and state tax issues. Finally, insurance experts can determine the best ways to mitigate financial risks associated with your business, property, and health. Obtaining help from trusted financial advisers can help reduce your financial uncertainty and lower your anxiety in the process.
While it’s difficult to eliminate all the financial anxiety in your life, these five tips can definitely help lower some of the stress you’re facing when it comes to money. Don’t let money issues get you down. Consider the tips here and use them to start lowering your financial anxiety right away!