How many times have you heard the phrase “stressed about money” in the last few months? Chances are, you’ve likely heard it more than once. In fact, the American Psychological Association conducted a 2019 survey that discovered money as the greatest source of stress for 60% of Americans. This was pre-pandemic.
Inflation has since crept up and made itself way too comfortable. The steady rise in prices has impacted affordability throughout the country. Many are struggling to cover the increased cost of food, gas, and shelter. Inflation rates are the highest they’ve been in 40 years. No wonder people are stressed about money!
Manage Your Financial Worry
Financial awareness and concern are normal, but carrying major financial worry can be a heavy burden. Just as there are ways to minimize the effects of inflation, there are also ways to help reduce overall financial stress.
1. Separate Your Emotions
Take a step back before you make any big decisions. Major stress triggers the body’s fight or flight response, which can be a recipe for disaster if you don’t have any plans in place. Before you review your accounts and dive into problem-solving, take some time to decompress and assess your feelings.
- Put pen to paper. Create a bulleted list or stream of consciousness to download your thoughts.
- Call up a friend for a good, solid chat.
- Sit in silence and let yourself feel what comes to you.
- Go for a walk.
It’s important to put some distance between emotions and rational decision-making. Strengthening emotional intelligence can offer you clarity to determine the reasons behind your financial worries.
2. Track Your Money
Now that you have taken some time to sort through the What, Why, and How of your emotions, it’s time to review your status quo. Where is your money going?
Avoidance is a common coping strategy when faced with stress. You might be avoiding opening your statements or checking your accounts. In this situation, instead of taking control of your money, your money is controlling you. Open your accounts, start with the facts, and really examine how you are using your money.
- Check all of your accounts.
- Make a list of all income versus expenses.
- Figure out where you can pull back your spending.
- Create and stick to a budget (amend when necessary).
Admittedly, when I open my brokerage account lately, my soul shrivels up for a second before I come back to reality. Even though it hurts to see it in the red, I know I am in it for the long-term and that the market will recover. So, what do I do? I add more money into the market. I buy low and hope to eventually sell high. Because I am tracking my money, I have a game plan in place that works for me.
3. Manage Outside Noise
Do you know what the greatest defense is against financial peer pressure? Honesty. Be honest with yourself, your financial standing, and your goals. Honesty removes fear and creates a space for growth. Outside noise (or pressure) can add to an already stressful financial situation. As long as you can manage your own expectations, then you can manage and limit outside influences.
Friends, family, and society as a whole, will see you how they want to see you. People will always have opinions. Work on expanding your financial knowledge while remaining confident in your own choices.
- Limit your time spent on social media.
- Make no comparisons. Your path is different from others’.
- Take time to discover personal financial goals. Make changes as you go.
- Stop sharing your story with people who don’t care. You know who they are.
- Consider the news, but don’t let it push you to make impulsive decisions.
Outside noise will always exist. However, as long as you are honest about who you are and what you learn through your experiences, it shouldn’t be a negative stressor.
4. Find Support
Life feels a little lighter when others have your back! Make some connections and take some weight off of your shoulders. Different tribes help you widen your scope. Knowledge sharing and conversation create a space that allows for different ideas and strategies. This sense of community and support will help you feel less isolated and stressed.
- Start talking about money! It’s not a shameful topic.
- Confide in a trusted friend or family member.
- Consider participating in online or community-based support groups.
- Find an accountability partner to help you stay on top of your financial progress.
- Ask for suggestions and ideas to navigate your financial circumstances.
- Touch base with a financial advisor.
The more you connect with others, the better your chances are of finding the support you need.
5. Consider the Worst-Case Scenario
Consider the worst-case scenario. Don’t drown in it. It can be easy to go overboard on negative feelings and scenarios when you’re stressed about money. However, if you can take a healthy step back to look at your worst-case scenario, then you can work towards a contingency plan. Building a plan is empowering.
Though it’s impossible to account for every single aspect of your worst-case scenario, brainstorming solutions will help you stay calm in the present. It will give you a sense of control and purpose when you might feel hopeless.
- What would you do if you lost your job?
- How would you handle a family emergency?
- What assets could you sell if you needed to?
- How can you make additional income?
- Are all of your insurance policies up to date?
- Is your emergency fund adequately funded?
Asking these questions will reframe the way you see potential financial difficulties. Considering the worst-case scenario can prepare your mind and current financial standing to face future challenges.
6. Celebrate Recent Progress
Progress is still progress, no matter how slowly it happens. Instead of highlighting future challenges, focus on recent progress. Celebrating progress offers a moment to disengage from stress. It helps maintain motivation for achieving success rather than dwelling on past or potential failures.
- Don’t ignore hitting a savings goal, no matter how big or small. Recognize it.
- Treat yourself to a reasonable indulgence after paying off a debt.
- Be proud of yourself for having a tough financial conversation that needed to happen.
- Create a checklist of small financial goals. Have a mini dance party each time you mark one off.
Remember to keep the good things in mind and the negativity at bay. Progress doesn’t have to be monumental or earth-shattering, but it should be celebrated in your own way. When you take time to celebrate and acknowledge your wins, you feel more energized and confident about your abilities.
Keep Calm & Take Control
I think most of us can reach a place where we end up catastrophizing and spinning out of control. Sometimes, life can feel way too heavy – especially when you consider mass media, current events, and personal climates. Add money into the mix and you might find yourself in a severely stressed state.
Financial stress can be a tricky road to navigate, but it doesn’t have to be a lonely one. The six practices above offer a roadmap to help you find a way through worry. Choose calm over fear, take a deep breath, and pick a place to move forward.