Five Easy Steps to Reduce Your Financial Stress

Five Easy Steps to Reduce Your Financial Stress

Stress related to money may be reduced and you can take charge of your financial situation with the aid of self-reflection, concentration, and resolve.

A few of the problems in life that might make us feel stressed out and depressed include health difficulties, relationship troubles, career pressures, and family obligations. However, who is the main offender? concerns about money. You are not alone if financial concerns are causing you stress in your life. It's also more typical than you may imagine.

According to the American Psychological Association's 2023 Stress in America study, the main stressor among 18-34 and 35-44-year-olds is money-related. Furthermore, two thirds of each age group said that their financial concerns "consumed" them. 36% of respondents stated they don't know where to begin, while almost 47% of respondents said they wished they had someone to assist them manage their stress. It's OK to seek assistance in controlling your stress if you are experiencing those kinds of feelings. Both physical and mental wellbeing are now covered by many health insurance plans.

Take heart if you are determined to address your financial problems. There is a way to turn your financial stress into a sense of empowerment and strength. Though it's not always simple, you may be able to take more control of your financial situation if you think on your situation, are determined, and maybe enlist the aid of a reliable friend or expert.

How did you travel to this location?

Most likely, your financial anxiety didn't start up suddenly. Finding the source of your financial worries and taking stock of your journey here are the first steps towards regaining control. But financial problems are seldom about money alone. They may be connected to our innermost concerns (failure, poverty, inadequacy) and emotional demands (security, success, comfort). It might take some time to go through all of this, so allow yourself some time to identify the attitudes that may be influencing both your short-term and long-term financial sentiments and actions.

Consider the following questions as you examine your relationship with money:

How did your family talk or handle money when you were a child? In a good way, bad way, or not at all?

Did you have a sense of scarcity or plenty as a child?

Were you taught fundamental financial skills by your parents?

How do your current actions and sentiments regarding money relate to the ways in which your parents behaved and the experiences you had?  

Consider your previous activities carefully and without passing judgment. Self-discovery, not self-shaming, is the aim.

Change your perspective on money to one that is future-oriented

Changing directions may be challenging. I don't want to downplay how challenging it may be; it can need a great deal of reflection and willpower. But it is possible to change your perspective. Consider the future and the desired good results rather than your faults and concerns.  

Keep in mind that progress does not equate to perfection while you make this change! It's OK to make mistakes from time to time, treat yourself to a supper you can't really afford, or fail to pay a payment on time. It's crucial to remember that these errors are the exception rather than the rule. And please, oh, please try not to do what I refer to as "compare despair." That's evaluating yourself based on how you think other people—friends, family, or—more likely—celebrities or other social media influencers—see you. This kind of thinking could not even be grounded in reality and might be damaging to oneself.

Here are five actions that might assist you in gaining financial control.

It's time to prepare for your new financial future after you've gained control over your money beliefs and stressors. To get you started, consider these five steps.

1. Determine and record your objectives

Consider carefully what you want to achieve in the next year, the next two to five years, and the farther future:

Do you want to purchase a house?

Change careers?

Launch a company?

Be getting married?

Retire without worrying about money problems?

Put your top priorities down on paper, together with a deadline, a budget, and a degree of importance (i.e., "must-have" vs. "nice-to-have").

2. Examine the figures

Find out whether your present expenditure permits savings toward these objectives now that you know what, where, and when you want to accomplish them. Stated differently, is there enough money left over each month after deducting your "must have" costs (such as rent, electricity, and student loan payments) from your net salary and then your discretionary spending (such as eating out, entertainment, and travel)?  

If not, start making trade-offs! How can you change your wiggle room to reach your objectives? For instance, if you could have your ideal wedding in three years, would you be prepared to swap one annual trip for a staycation? Or are you content to have a smaller wedding in order to satisfy your ambition to visit other countries? There's no one correct response. It is up to you to choose what is best for you. But concessions could be necessary.

3. Make saving a priority

Consider saving as an upfront payment to yourself. What is the appropriate amount to save? It might be a good idea to save between 10% and 15% of your salary, particularly if you are under 30. But the later you start saving, the more you need to put away to make up for it.

4. Set everything up automatically

Although it may not seem significant, try to automate bill payment and savings as much as you can. Making it easier for good actions to occur is backed by a substantial amount of behavioral economic research.

5. Keep learning new things

Continuing your financial education is the last step on your path to financial well-being. You may do this by reading books and articles, listening to podcasts, building a connection with a reliable adviser, talking with informed friends and family, or doing all of the above. Make sure you comprehend the value of diversity, compounding, and frequent check-ins when it comes to investing.

Not sure where to begin? At SchwabMoneywise.com®, there are free educational tools accessible. The secret is to be curious and open-minded, to investigate, to ask questions, and to assess the possibilities and obstacles in your current circumstances.

It can take more than just money to solve financial stress

The steps below might put you on the right track to financial well-being and a more positive outlook, regardless of your income or savings:

Having specific, attainable objectives is important.

Recognizing the behavioral tendencies that may cause obstacles for you.

putting measures in place to look for your financial, health, and emotional needs both now and in the future.

Taking these actions might help you feel less "consumed" by financial problems and more capable, self-assured, and in charge. This is something you can handle!