The American Institute of Stresslists down ‘finances’ as one of the top 10 stressors in America. According to the American Psychological Association (APA), 72% are stressed about money occasionally and 22% are extremely stressed about it. It’s no surprise. Among the most common financial issues people confront are mortgage foreclosures, overwhelming debts or bankruptcy, and low income.
Understanding financial stress is very important because it affects a person in many ways. Primarily, it affects your psychological and physical health. Like any other forms of stress, fretting about money problems can cause health problems like depression and poor sleep. Worse, some people resort to unhealthy coping mechanisms such as smoking, drinking, and substance abuse that further damage their health.
10 Tips to Beat your Money Problems
1. Determine the cause of your financial stress
Worrying about finances from time to time is normal. However, constantly worrying about it can easily take over your life. Here are the most common causes of financial stress, according to the 2016 Employee Financial Wellness Survey:
- Unmanageable debt – many people who enter the debt cycle are unable to get out. Some people turn to even more loans to pay of their previous debts, which often lead them to more trouble.
- Having to work forever – the thought of having to work for the rest of their life stresses many people. It makes them feel helpless to think that the bills will never go away, even after retirement.
- Lack of emergency fund – not having enough fund to cover for emergency expenses is a leading concern among most employees. When an emergency strikes, the struggle is real.
- A desire for a nicer lifestyle – everyone wants to have a better lifestyle, get a nicer home and car, travel and get the best of life. This want constantly puts pressure on many.
- Mortgage and rent – struggling to pay for mortgage or rent put so much anxiety to a person as having a home is fundamental to the feeling of security and happiness.
2. Seek inspiration.
You’ve probably seen a lot of how-to-get-rich videos and books and felt inspired to follow their lead. Surely, you will learn a lot of things from the people who made a fortune – their habits, mindset, strong determination, and perseverance despite the many failures they’ve gone through. However, you should keep in mind that not everyone’s circumstances are the same. Simply following their steps without taking into account your personal circumstances might set you up for more stress. It is important to seek inspiration in the right way. Instead of following their actions, adhere to their values and habits which made them successful and learn how to apply those in your everyday life.
3. Change your perception of money.
To change your financial life, you have to change your view of money. First of all, think of money as a ‘tool’, not a ‘result’. A tool to acquire more and do more in life. When you start to view your money as a tool, it allows you to use it to grow your wealth. You will want to invest rather than spend more. Another important thing to remember is that money does not define who you are. Your self-worth is not related to your clothes, the kind of house you live in, or the car you drive. If you do this, your money problems should not be too powerful as to affect your emotional state.
4. Believe in yourself.
Just because you weren’t born rich doesn’t mean you will never be rich. Just because you’re earning very little now doesn’t mean you will never be able to keep up with your debts or get a nicer lifestyle. Believe in your abilities. Instead of fretting about what you lack, take time to list down your skills, talents, and hobbies. Maybe you can start a business out of the things you like doing. Maybe you’re good at cooking. Why not start an online meal delivery service? Maybe you’re good with arts. Many people make a good fortune from their artistic skills. Whatever you do, always believe in yourself.
5. Adopt a positive mindset.
People who see the glass half full tend to make better financial decisions and stress less about money than those who see the glass half less. Dwelling on negativity isn’t healthy. Why? Because it makes you think about the problems, not the solutions. Instead of finding ways to elevate your financial status or pay your debts easily, you spend more time thinking about the worst things that could happen, which are in no way helpful. Pessimism also prevents you from taking risks (such as investing or putting up a business), limiting you from great possibilities.
6. Ask for help.
Don’t be afraid to seek help. Depending on your current financial problems, remember that there are people and places to turn to for help, such as your immediate family, relatives, and friends. If you’re dealing with an emergency, such as a natural disaster, look for grants and financial assistance programs provided in your state or community. You can also look for low-interest personal loans for unexpected expenses. Business loans are provided by banks and third-party financing companies for individuals wishing to start a business but don’t have enough capital. Help is available in many forms. You just have to seek.
7. Manage your debt wisely.
You might be hungry for tips to cut your debts. But it is equally important to understand that not all debts are bad. A loan can make all the difference between paying for your college degree, owning your home, or starting your own business and losing those opportunities. Evaluate your debts to know which you should prioritize. Pay your credit card bills on time as well as your mortgage early. It all gives you peace of mind and financial freedom. Loans are helpful especially if you know how to use them.
8. Invest and save.
One of the major causes of financial stress is lack of savings. Keeping aside some of your money each time you receive your paycheck is a skill you should learn to master. Make savings a priority, and not just an option when you feel like you have extra cash. Also, start investing now. It’s a great way to boost your savings than simply keeping your money in the bank.
9. Create a budget.
Many people underestimate the power of creating a budget. At first, you may think that a budget is only going to add to your financial stress. But the more mindful and organized you are about your spending, the more you will feel a peace of mind. Creating a budget allows you to decide how to spend your money based on what you currently have. It lessens the possibility of overspending and lets you set aside money for savings and debt payments.
10. Determine what you can change.
Take time to reflect on your financial status – your worries, current problems, and goals. Decide what you can do to change the situation. For example, if you don’t make enough money, what can you do? Will you look for an extra source of income or go back to school so you can qualify for a better-paying job? If you have impulsive shopping tendencies, what solutions can you think of? Should you seek advice from a financial consultant? Take a look at how you manage your finances and change those that you think are adding to your stress.
Finances are often a source of stress for many people. If you are constantly bombarded with money problems, consider these tips. It all starts with identifying the causes of your financial stress. From there, you can adopt positive changes that will make you feel more in control of your finances and give you peace of mind.