If you’re feeling stressed out about money, then you aren’t alone. According to a survey reported by Time, 51% of Americans are experiencing some level of financial anxiety, with almost 17% of respondents describing themselves as “very anxious.”
As our understanding of how anxiety affects the body evolves, it’s becoming increasingly apparent that chronic stress can take a toll on mental and physical wellbeing. Financial anxiety can compound other health problems as well, due to delayed health care and unhealthy coping behaviors.
How can you stop the cycle of financial anxiety and finally find peace of mind? By focusing on general stress reduction along with creating a greater sense of financial stability, you can join the minority of Americans who aren’t constantly worried about money. Before we look at steps you can take on your own, it’s worth noting that if your anxiety (or coping behaviors) are having such a negative impact on your life that it’s difficult to get through the day, then talk to your doctor or make an appointment with a therapist.
Money Matters: Review Your Finances
Often, financial anxiety arises from the fear of the unknown. If you’ve ever refused to open a bill or been afraid to check your bank balance, then you’ve experienced one of the worst effects of anxiety. It doesn’t just make you feel scared and stressed in the moment, but it also encourages you to avoid doing the very things that would ultimately lessen your anxiety.
The first and most important step to stopping your financial anxiety is confronting your finances. No matter how bad it is, ignoring it is worse. Sit down with your records and make a list of every asset you own (including cash, retirement accounts, and property) along with every debt you owe. That will give you a snapshot of your current finances, which is a great starting point.
After that, it’s a good idea to track your spending without drastically changing your habits for 30 days. Make a record of every single penny you spent, where you spent it, and why you spent it. If you bought a coffee at Starbucks during your lunch break for $4.37 because you were feeling tired, write it down! A spreadsheet is useful here since you can automatically sort and total your purchases, but an ordinary notebook will work, too.
Once you have a clear picture of your assets, debts, and spending habits, you can use that knowledge to update your budget. But first, let’s take a stress relief break!
Stress Relief: Try Meditation–It Really Works
This probably isn’t the first time you’ve been encouraged to meditate, and it certainly won’t be the last. There’s a reason why meditation is one of the most popular stress reduction techniques in the world. If you don’t believe me, then maybe you’ll listen to the Mayo Clinic:
Meditation can give you a sense of calm, peace and balance that can benefit both your emotional well-being and your overall health. And these benefits don’t end when your meditation session ends. Meditation can help carry you more calmly through your day and may help you manage symptoms of certain medical conditions.“Meditation: A simple, fast way to reduce stress,” Mayoclinic.org
Meditation is free, easy, and can be done anywhere without any kind of fancy equipment. The simplest form is to sit down comfortably, close your eyes, and direct your attention to your breathing. However, you can also practice walking meditation (with your eyes open, please!), listen to a guided meditation, or try repeating a mantra. As long as you are taking a few minutes to focus on being in the present moment, then you’re doing it “right.”
Money Matters: Update Your Budget
If you’re not sure where your money goes each month, it can be incredibly stressful! Living paycheck to paycheck is the reality for many people, and the solution isn’t always to be more careful with their money. However, if you earn enough to cover your essential expenses but still struggle to make ends meet, it might be time to update your budget.
Commit to tracking your spending habits for 30 days. The results should reveal the habits that are draining your bank account or racking up credit card debt. If you’re spending way more than you realized on takeout, then cutting back is the obvious move. Just make sure that you’re adjusting your budget to make room for more groceries, too.
According to Investopedia, the 50/30/20 budget rule is a good starting point for most people. In this simplified budget, 50% of your after-tax income should be spent on needs. We’re talking basic necessities here: housing, utilities, transportation, groceries, and insurance. If this category is taking up more than 50% of your take-home pay, then you either need to earn more money or downsize your lifestyle. After your needs are taken care of, the remaining money is split between “wants” (30%) and savings (20%).
Stress Relief: Get Regular Exercise
Cutting back on life’s little pleasures is often the first piece of advice given to people who are struggling with finances. If you’ve had to give up hobbies or treats to balance your budget, you might be feeling demoralized or even resentful. That attitude won’t help you make lasting habit changes, unfortunately.
Often, we deal with stress by resorting to unhealthy coping behaviors. That might include self-soothing with alcohol or food, for example, or recklessly overspending to “treat yourself.” These coping behaviors only make your problems worse in the long run. No one wants to hear it, but regular exercise will help boost your mood and improve your overall health. Best of all, going for a walk or following along with an exercise video at home won’t cost you a thing.
Money Matters: Plan to Pay Off Debt
Debt can cast a long shadow over your life, especially when the amount is more than you can imagine ever repaying. Thanks to interest rates, debts only get bigger the longer you put off paying them. And if you fail to pay your debts for too long, they’ll go into collection and ruin your credit–plus you’ll start to hate the sound of a ringing telephone in case it’s a debt collector again.
No matter the size or source of your debt, you can at least make a plan to tackle it. There are several time-tested strategies to pay off thousands of dollars in consumer or medical debt, including consolidation at a lower interest rate, the “snowball method,” the “avalanche method,” and so on.
But what if your debt is double or triple your annual income? That can be the case for people with sizable student loans or medical debt from a major illness or accident. If you’re feeling overwhelmed and helpless in the face of major debt, experts agree that the first step is actually to forgive yourself. Debt of any size can cause shame, and shame feeds into avoidance and anxiety. Consider talking to a credit counselor to explore your options and make a plan. The Federal Trade Commission has some great advice on finding a reputable counseling service.
Stress Relief: Talk to Loved Ones (But Not on Social Media)
As I said, debt can often lead to feelings of shame. Stop beating yourself up and talk to a loved one. You don’t even have to talk about money! Just chatting with someone you care about can alleviate symptoms of stress. If you do feel comfortable opening up about your financial anxiety, set some ground rules first. This might seem overly pushy, but if you know that your loved one is a “fixer” who will want to solve your problems while you only want a sympathetic listener, be clear that you just need to vent for a few minutes.
The best way to have a chat with a loved one is face-to-face, either in person or on a video call. A phone call can be helpful, too. Even texting a friend can help ease your mind. But whatever you do, limit your social media usage. It’s very, very easy to start thinking that everyone in your life is doing great while you’re the only one who is struggling.
Psychologists have understood for many years that social media can trigger feelings of envy and inadequacy. People tend to post a curated version of their lives on Facebook, Instagram, and other social media sites. However, those posts rarely show the whole picture. The “comparison trap” is real, and it can make your financial anxiety even worse.
Money Matters: Take Charge of Your Financial Literacy
Managing money is an important life skill, and yet it’s rarely taught in high school or college these days. Financial concepts can be intimidating, especially when you start worrying about things like tax deductions, compound interest, and the difference between a 401(k) and a Roth IRA.
You don’t have to become a financial expert, but you should take responsibility for filling in the gaps in your education. Reading articles like this one is a great start! However, in addition to browsing the internet, it’s a good idea to check out the resources at your local library (which is free!) or even sign up for a class. Once you understand how financial systems work, you’ll feel a greater sense of control over your own money and be empowered to make more informed decisions in the future.