Few things can create and sustain stress like money. The stress can build slowly, from unrealistic spending habits, or appear suddenly, such as following the loss of a job or the appearance of unexpected expenses. But when it appears, stress regarding money issues can spread to other areas of your life. You might begin to feel helpless or hopeless. You may lose interest in friends and family, find sleep difficult or develop health issues.
If you find yourself suffering from the emotional effects of debt or other financial issues, know you are not alone, and there are real, effective ways to address and get through it. It likely will not be a quick journey back to financial health, and it can be a roller coaster ride, but the best part about following these steps is that every increment of each one can provide some sense of relief. Every time you make a smart decision regarding money, you will be creating an opportunity to feel some of the stress being lifted.
Go through each of these five steps and identify how they can apply to your immediate and long-term situation and goals. Share these with a partner or trusted friend to get some objective insight. Then commit yourself to seeing each one through — and enjoy the relief as your financial stress symptoms begin to fall away with each concern.
1. Redefine “Necessity”
When it comes to addressing financial stress, one of the first things you can do is look at your spending habits. Are there areas where more discipline and planning might help? You may be accustomed to a certain comfort level or lifestyle and it may not be easy to imagine living any other way. And so you use that as a baseline for your budget.
While it seems like it may create additional stress at first, you will quickly learn to appreciate how eliminating unnecessary expenses can reduce stress. Be frank in your self-analysis — are you used to spending $200 a month on coffee? $500 a month on clothes? Is this absolutely necessary? If something makes the “must-have” list, revisit it and see if you can think of any less-expensive alternatives or hacks. Maybe you can make your coffee at home most days or pack your lunch more often.
2. Build an Emergency Fund
Once you have been able to eliminate frivolous spending, some of that money will likely go toward paying down debt or getting caught up on other commitments. But you cannot overstate the importance of an emergency fund. Emergency situations arise when we least expect them. Your car will need a repair. The washing machine will break down.
The peace of mind that follows a growing emergency fund is one of the best ways you can reduce financial stress. The stability of knowing you will be safe in the event of an unexpected turn will help you feel more secure and protected financially.
3. Be Budget Conscious
A good budget will be your best tool in getting finances under control. Create a spreadsheet that lists all necessary monthly expenses, such as a mortgage payment, bills, food, car payments and travel expenses. During this stage, you will be able to further hone in on what you truly consider a necessity.
When you get paid, set aside the money to cover these essentials. Knowing you are prepared for these essentials will minimize stress. This is also a good time to determine how much money you can contribute to your savings - or "emergency fund" every month. Making this a part of your budgeting will make it easier to consistently save money.
4. Boost Your Income
You might be limited to solving financial woes with an income that might not be changing anytime soon — but you do not have to limit yourself to one income. What are your talents, experiences or skills you can use to make money outside of your normal job?
Today, in what is increasingly called the “gig economy,” more people are taking on work-from-home jobs as their primary or secondary source of income. A quick search online can provide you with dozens of options to explore.
5. Acknowledge a Shopping Addiction
While there are many factors that can bring on financial stress, one, in particular, is an addiction to shopping. When spending money becomes an addiction, it's easy to rationalize it as an uncontrollable part of your life. But until you can address it, financial stress will continue to be present in your life.
When shopping, do you:
- Feel you have no control over your choices and impulses?
- Find it reduces guilt over a previous shopping spree?
- Spend more than you are able to afford?
- See it as a reaction to depression or anger?
- Find it to be harmful to a relationship?
If you are experiencing financial stress, these tips can prove valuable in managing it. However, if you are aware of a shopping addiction that is fueling that stress, you may need help finding a solution. The good news is that Brookhaven Retreat can help. Reach out to us to learn how.
You can also take our shopping addiction self-evaluation here.