Do you worry about money and your financial situation? Did you know that your financial situation is one of the most common causes of anxiety and stress? Are you living paycheck to paycheck and worrying about being able to pay your rent and bills?
Your financial situation is one huge thing that can trigger anxiety and stress. However, there are ways for you to minimize your anxious thoughts and actually improve your relationship with money and your finances.
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Does the topic of money leave you in a cold sweat? If this is the case, there might be a deeper meaning or reason by your anxiety or stress.
The good news is, that you can absolutely control how you feel about your financial situation. Money and financial anxiety is all about your behavior. How you spend money and pay your bills are all determined by your habits.
Learn how you can improve your relationship with your finances
Focus on the positive of your money matters
Let it be said, that thinking positively is simply not going to pay your bills or grow your budget automatically. However, it can help calm your fears and worries about your financial situation.
Even though you might be living paycheck to paycheck and you are stretching your budget thin, staying positive will help you find your financial strengths, which could lead to solutions to some of your problems.
What you can do right now is find a piece of paper and write down the positive aspects of your financial situation. Do you have an amazing job? Do you put money away for an emergency fund even if it’s not much?
When things are tight, and your financial situation is causing you a lot of stress and anxiety, taking a moment to appreciate what you are doing right, can help you stay calm and focused.
Review your budget
At the time I was most anxious and stressed about my financial situation, which was when I knew my personal budget was a mess.
I was overspending on certain categories, and I was not properly planning my purchases. Doing regular budget check-ups has made all the difference.
Do some reviewing
Make sure you know exactly what kind of expenses you have every month and write them down accordingly.
Know which ones of your bills are variables (car maintenance, emergencies, traveling, etc.) and which ones are fixed every month (your rent, mortgage, gas, etc.).
Going into debt is amongst the greatest source of stress and anxiety. If you find that your credit cards are in the red more months than not, it’s time to rethink your money habits.
If you don’t have enough money to cover your bills, you could either try to take a second job to bring in more money, or you need to reduce some of your bills. This could be your phone bill, TV package, or travel plans.
If you have debts of any kind create a debt payoff plan and stick to it. This will give you an idea of when your student loans or car payments are going to be paid off.
Simply having this knowledge can help you breathe easier – even if you are not going to be debt-free for another 5 years or so.
Get rid of financial shame
If you have not been that great with handling past money affairs it can lead to a great deal of shame. This could be incorrect budgeting, not having a budget at all, or even being ignorant of the proper way to handle your finances.
These past mistakes can lead to future stress and anxiety as well as future problems managing your finances. You need to start taking it seriously.
In America alone there’s an average unemployment rate of 3,5% (source). The average household credit card debt is around $7,000 (source). This leads me to believe that there a lot of people, who don’t really know how to handle their money.
Are you feeling ashamed or embarrassed about your financial situation? Don’t. Instead, take some time to educate yourself about money and budgeting as well as organizing your finances. Even if the numbers are very small. This can set you on a much healthier path in the future.
Seek out an advisor to help with money matters
Financial advisors are amazing. They can help you calm your fears about money and your financial situation. They can also help you create a budget for your exact household.
Do you want to save more money for retirement? Maybe you want to start investing? A financial advisor can help you with everything you need. I am not sure how to go about it in the US, as I live in Denmark.
In Denmark, you simply go into your bank and ask to speak with a financial advisor. When you first sign up for a bank, a financial advisor has been assigned to you. If you later want to seek financial advice, it usually won’t cost anything extra.
I am not sure how it works in the US. If you want to seek out a financial advisor, I advise talking to your bank and see what they suggest. They know who to point you towards.
Set up an emergency fund
Maybe you think that you are truly secure in your current job position. The truth, however, is that you can never know for sure. You are never 100% secure in any position. Not even as a director.
Saving up for situations like losing your job, illness or death can help make you feel more secure. What if you get sick and you need to go to the hospital for treatment? In the US, this costs money. And a lot of it, I hear.
In Denmark, we pay 40% of taxes every month. Free hospital treatments are one of the things we get out it. We don’t have to pay for surgeries of the bigger kind. In this regard, I know I am pretty safe at least. However, I still need to pay for insurance.
Saving up for emergencies like these can feel like a safety need. Having an emergency fund can keep you going for a couple of months if you should lose your job. That’s safety and it can help make you feel less stressed and anxious.
Saving up for these kinds of situations depends on how much you can put away each month. It will take most people years to build this up. But just having enough to pay for a few months of rent, can keep you at ease.
A great goal is to work your way up to at least 6 months’ worth of living expenses. How would this feel to you, if you had that kind of money set aside for emergencies?
Stop comparing yourself
We all compare ourselves to other people. All the time. The accounts I have on Facebook, Instagram, and Twitter are generally showing pictures and whatnot of trips, cars, and other clear indicators of the wealth of my friends.
I may know what some of my friends’ financial situations are alike, but I can’t help but compare myself anyway. Know this feeling? It’s frustrating, right?
Constantly comparing ourselves to others is not a healthy way to live. Especially for our mental health. Here are a few things for you to remember the next time you feel the urge to compare yourself to a friend or someone entirely else:
- They might show pictures of a recent trip or a brand new car, but you need to remember that you don’t know how much money is actually in their bank account. You don’t know if they have gotten themselves into debt to get these things.
- If a friend of yours has achieved financial success, you haven’t seen the hard work they put into this success. You don’t know what or how much they might have sacrificed to get to this point.
- Your friends’ journeys and success are not yours – you have your own dreams.
- Remember that what you see on social media is a moment, just a moment, of their lives. It might be a good moment, and the best version of themselves they put on social media, but you don’t know what is actually going on behind the scenes.
- The only person you can really change is you. Instead of comparing yourself to the success of others, create your own measuring stick by which you can feel more in control over your money. This could be a healthy savings account, an accurate monthly budget or paying off debt.
Educate yourself about budgeting, money & finances
Maybe you don’t really know anything about finances or budgeting. That’s ok. But if you are stressed or anxious, because you don’t know anything about these things, start educating yourself today.
Let’s say that you want to start saving for your retirement or pay off your student loans, but you have absolutely no idea where to start. This will leave you worried and anxious about your future, right?
If you don’t believe that you know enough about finances or budgeting, remember that ignorance is not bliss in this case. Ignorance could be your worst enemy. Start by:
- Research retirement saving options online
- If you are able to take a course about finances or budgeting in your local area, this is a great way to learn with others
- Talk to a financial counselor or advisor about your options
If you take matters into your own hands and start educating yourself, it can help reduce some of your stress and anxiety symptoms, which is why you are even reading this in the first place, I’m guessing. By educating yourself your financial situation becomes something you can control.
My favorite books about money management
By now you have probably realized, that staying up all night and worrying about your financial situation won’t make extra cash appear in your bank account. It won’t help you decide how to save up for the future.
If you learn how to calm your fears by educating yourself on money matters, your financial situation and budgeting you will begin to feel confident about your financial choices. It’s all a matter of education, action, and respect for money (not fear).
Finding proactive ways to stay on top of your finances, just might help ease your anxious or stressed thoughts. It can help lift a burden off your shoulders.
In my next article coming up on January 14th, 2020, I will talk about how you can manage your money if you are on a low income or disabled. I will give you 12 ways you can use yourself to manage your money.
Do you ever feel anxious or stressed about your financial situation? How do you cope? Let me know in the comments below…
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