Money is one of the biggest stressors in many Americans lives, at times causing anxiety and causing tension with a spouse or partner.
Watching debt levels rise while struggling to make monthly payments can potentially lead to a feeling of hopelessness and have a serious impact on your quality of life.
There are several steps you can take to better manage your finances and reduce financial stress and anxiety.
1. Take inventory of your finances
How much are you saving and how much do you owe? Are you spending more than you make? Are you maintaining manageable debt levels and staying current on all bills?
These are all questions you need to answer and assess honestly. It’s important to know where you stand financially, including regularly reviewing your spending habits, debt levels, savings and investments, and credit reports and scores.
Start by reviewing your cash flow. It’s important to know how much is coming in, where you are spending, and where you can cut expenses and increase savings. You will need to inventory all debt and categorize it by type, institution held, interest rates and maturity dates. Also look at all recurring costs, such as utilities, to determine what must be paid each month.
Ensure that you have enough cash and other liquid assets to help you through the hard times and emergency situations.
2. Keep perspective and know what you can (and can’t) control
Financial markets go up and down and those fluctuations are often out of your control. You can help manage finance-related stress if you understand the financial issues that can be addressed, and which are out of your control.
One great way to take control of your finances is to build a solid financial plan. Work with a CPA or financial advisor to determine retirements and savings needs and investment growth targets, then build an investment portfolio that can help you reach those goals.
Start with a solid financial plan and let it help you with your investing habits. This can help keep you calm when sudden market changes come into play. Remember not to let quick market changes cause you to panic.
Be sure to review that plan with your financial advisor on a regular basis to adjust for changes in your savings needs, growth targets or other life events, such as marriage, divorce, a new child or job loss.
3. Take care of your physical, mental and emotional health
Exercise and eating healthy can go a long way toward helping you address stress and anxiety.
Going out for a walk or a jog can help improve both physical and mental strains. According to the Anxiety and Depression Association of America, exercise is effective at reducing fatigue, improving alertness and concentration and improving cognitive function. It also helps produce endorphins which improves the ability to sleep and reduce stress.
Be sure to take time to give yourself and mental break. Take time out during the day for a walk, meditation, yoga or catching up on that book you wanted to read. Or, reach out to family or friends to see how they are doing and talk about your concerns.
Be careful not to spend a lot of time fixating on your finances and watching your portfolio online. And don’t be afraid to seek out help from trained mental health professionals who can help you address your stress and anxiety.
4. Find opportunities and tools to help you today and in the future
One great way to reduce your financial stress is to put much of your money management on autopilot.
First, take advantage of autopay options to reduce how many bills and payments you have to remember each month. At the same time, set up automatic savings plans to build an emergency fund for future economic downturns.
Leverage apps and other software to track your spending and find areas to cut back. There are many wonderful free ones available. Sign up for alerts from your bank or credit card providers to make sure you can address fraudulent charges quickly.
Lastly, try to implement good financial management and planning and maintain that program beyond market ups and downs.