Coping with Stress During Financial Difficulty
Coping with Stress During Financial Difficulty
At the time of this writing we are experiencing a global pandemic that has affected the employment and resources of many people throughout the world.
Whether or not there is a serious pandemic, money is just tight this paycheck, or anywhere in between, life can get incredibly stressful when your financial life is out of whack.
Let’s look at some ways you can ease the burden and relieve some anxiety over money problems.
Evaluate Your Situation
The first thing you will need to do is take an honest look at what’s happening with your money.
Review your budget to find out if there are any “money leaks” that need to be repaired.
Here are some questions to ask yourself:
- How much money do I have coming in? Include all sources that you receive money from.
- Where is my money going? Are you happy with what you are spending in each area?
- Is there anything coming down the pipeline that you need to be prepared for? Like a birthday or an renewal of a membership?
Create a Budget
Once you know what’s happening with your money, it’s time to put a plan into place. Your current budget may need some adjustments, even if they are only temporary.
If you haven’t been living by a set budget, you might feel that this will add to your financial stress. On the contrary, a budget is an extremely helpful tool to help you gain control of your money. Knowing you have enough money to cover your expenses brings immense financial peace of mind.
Steps to create your budget
- List your income
- List your priority expenses – housing (including utilities), food, transportation (including fuel, insurance, etc.) and clothing.
- List your debts
- List anything you need to save for (emergencies will take priority if you are having difficulty)
- List your other expenses that may or may not be necessary
- Think of expenses that don’t happen regularly that you may need to save up for. Birthdays, holidays, memberships, seasonal, etc.
Decide on Any Changes or Adjustments You Can Make
How do you feel after you’ve created your budget?
Do you have room to breathe, or could you use a few adjustments?
If you have a clear picture of your spending, you might be able to identify areas of spending that are contributing to your stress.
Here are some things to consider:
- Is this expense necessary? If so, am I paying too much?
- If the expense is a lower priority, can the expense be reduced or eliminated (even temporarily)?
- Is there another expense that can be lowered or eliminated to make room for something more pressing or necessary?
- Can I come up with creative ways to save money on some of my expenses? Like shopping with coupons and sales. Or contacting a provider to see if they can offer a discount.
- Can I come up with extra income or money to help pay for some of my expenses? This might involve selling a few old items or working a part time side gig until things improve.
Ask for Help
Asking for help would not involve borrowing money. This would put you into debt which may further aggravate the problems you are facing.
The kind of help we recommend is coaching or an accountability partner.
If your married, both you and your spouse should be involved with creating a budget that you can both commit to. You might also enlist the help of a trusted friend that will help keep you accountable for your spending.
If someone you know who is great with their money, ask if they might be willing to help you come up with a plan to help manage your finances. If your able, you might also consider hiring a professional financial coach to work with you one on one to hit your financial goals.
Build Your Emergency Fund
There is a great sense of security found in having an emergency fund. Even a small emergency fund of $1,000 can help you avoid going into debt and intensifying financial stress.
Once your budget is in place, put an emphasis on building a small emergency fund. Any extra money you find should go into this fund until you reach your desired goal.
Remember the fund is only for emergencies. Don’t use the money for anything that can be paid for another way or is not truly an emergency.
Pay Off Your Debt
You might be amazed at how much money you spend each month as payments on debt. Imagine if you were debt free how much money it would free up each month.
Go ahead and add it up … we’ll wait …
You’ll also free yourself of any debt collectors bothering you if you’ve become delinquent.
Establish your emergency fund first, then dive in and pay off your debt as aggressively as you are able.
Now instead of your extra money going into savings, it’ll go toward paying off your debts faster. When you’ve paid off your debt … you’ve essentially given yourself a raise. Hold onto it by avoiding debt in the future.
Start a Gratitude Journal
This strategy is great for any type of stress.
Take time to focus on the good in your life. Take a few minutes each day to reflect and realize the blessings in your life. There is always something to be grateful for. It might be as small as the sunshine in the sky or the breath in your lungs.
Schedule a time to write it down. You may want to do it in the morning to start your day off positive, or at the end of the day to reflect on the blessings of the day.
Finding things to be grateful for will become easier each day. When you seek for the good in life, it seems to show up more. You will ease your mind and realize there is much to be thankful for.