5 Steps to Reduce Financial Stress

  • April 19, 2022
  • By: GreenPath Financial Wellness

64% of Americans are Stressed About Money

A recent survey shows that approximately 64% of Americans report feeling stressed about money. Financial stress is a lot like physical and mental stress.

Many studies show that over time, stress wears you down. In general, chronic stress symptoms may affect your health – perhaps a source of a recurring headache, nightly insomnia or an inability to concentrate.

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Medical experts remind us that chronic stress symptoms can affect your body, your thoughts and feelings, and your behavior.

Financial stress is much the same – it can draw down on your financial wellness, increase financial anxiety, and cause a lot of worry about your overall financial situation.

Money concerns can also impact relationships with loved ones. Financial stress is often cited as a contributor to fractured personal relationships.

Getting control over your money can ease some of that stress.

Steps to Reduce Financial Anxiety to Improve Your Financial Health

When living expenses become overwhelming, or debt gets out of control, the financial strain increases.

Typical concerns with financial health and wellness involve worries about debt repayment, managing living expenses, keeping up with housing payments,

When we think of money worries, it’s worth considering what is in your control.

Like with mental stress, focusing on things you can change will help reduce financial anxiety.

What are the personal finance matters you can change to reduce financial stress? Consider your housing – one of the key items for your overall safety and wellbeing.

If you can remove the anxiety of being unable to pay the rent, for instance, by building up savings or paring down debt, your financial situation will improve and help reduce financial stress.

This list assembled here is specifically aimed at controlling what you can to ease your financial anxiety, help you move toward financial goal achievement, and reduce money stress:

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1: Take Steps to Build a Budget

Keep it simple by first making a list of all of your monthly expenses (money outflow), essentials like housing, food and medical costs. Be sure to include outflow items like paying down credit card debt or other loans.
Next, make a list at the amount of money you bring in each month (money inflow). Where do you stand each month?

If outflow is greater than inflow, try to consider at least one small change to make right away. For example, is their a streaming service you can cancel? Can you reduce the amount of take-out meals you purchase?

Can making a budget really make you feel better about life? You might be surprised! One of the most powerful things you can do to relieve uncertainty and financial stress is to take a step back and make a plan. A budget can help you figure out how to meet both your short and long-term financial goals. Think about it like a fitness plan: it’s not about dieting, it’s about getting healthy, staying healthy, and being ready for the life you want!

2: Reduce Financial Stress By Getting Support

When it comes to money stress, you don’t have to go it alone. Having a support system can help you reach your goals. Be sure to turn to trusted resources, like the national nonprofit GreenPath Financial Wellness. In addition, get as much education as you can about financial information such as budgeting, debt management, cutting costs, housing finances and other matters related to your financial situation. Surround yourself with people you trust who will support your financial goals and want to help you succeed.

3: Make one financial decision at a time.

When people are faced with multiple, back-to-back decisions that test willpower, research suggests that their willpower can easily be depleted. Space out your financial decisions instead of making too many at once and becoming overwhelmed.

For instance, perhaps you might decide to track your housing costs. Research shows that tracking can be an effective tool. Keep a daily list of how you spend your money.

Perhaps another decision is to keep a “stress less list.”  Take stock of your financial situation and where money causes you stress. Write down ways you and your family can reduce expenses or manage your money more efficiently. Then commit to a plan and review it regularly. Although this can be anxiety-provoking in the short term, writing a plan and sticking to it can reduce stress. If you’re having trouble paying bills or staying on top of debt, reach out for help by calling your bank, utilities or credit card company to set up a payment plan.

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4: Look at Your Financial Goals

To reduce financial stress it can be helpful to understand your overall financial situation so you can put your money to work for your goals! A few starter questions about your short and long term financial goals can help you get an idea of what you have to work with, what your commitments are, and what you have remaining to devote to your goals.

What do you want to accomplish? Set a specific and detailed goal (↗) . By putting specifics like an amount or a timeframe on your goal, it makes it easier to see your progress and accomplish it. For example, instead of “save more money” you could “save $100/month for all of 2019 to have $1,200 to buy a new computer.”

Look at that budget you already created. How much is already committed? Add up all the bills and expenses that you know you’ll have to pay each month. These are things like loans, minimum credit card payments, utilities, groceries, rent, taxes, cable bills, etc.

How much do you have left for your goals? This is the amount that you can apply toward your goals and choices. Think about what is most important to you, and what you need to get there. What you decide to do with your discretionary (leftover) income is all about you and your goals.

5: Stay Flexible

Remember, nothing is set in stone. You can reduce your financial stress by staying flexble. You’re in charge of your plan and your goals! It’s always a good idea to pay off debt (↗) and to make savings a priority (pay yourself first! (↗) ) You can always adjust your goal along the way, review your budget and make adjustments to trim expenses or direct money toward something different.

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If you want to get serious about reducing financial stress, connect with GreenPath. Our caring experts offer  free debt and credit counseling (↗) . For people who need it, a Debt Management Plan (↗) can lower your interest rates and fees, and help you save money and pay off your debt faster.