By NYLAG Financial Counselor Peterson DeCoteau, and Gwen Hartstein
Have you ever felt worried or fearful when opening your mail because you do not want to see another bill or collection letter you cannot afford to pay? Or perhaps you are tired because your financial goal this year seems impossible to reach. These may be symptoms of financial stress, which are more common than you think.
A recent survey by Capital One revealed that 73% of Americans think their finances are the most significant source of stress. In a separate survey by Bankrate, 52% of participants indicated that money increasingly takes a toll on their mental health in the form of anxiety, stress, worry, loss of sleep, and depression. Current economic factors that are out of our control, such as high inflation and unemployment, have certainly made it more difficult to feel financially secure.
There are ways to lessen the impact of these feelings. Here are four tips for handling the mental health challenges that come with financial stress.
1. Take stock of your finances. Start by determining what you spend monthly and comparing it to your income to get a clear picture of what you are working with to meet your basic needs. Look at last month’s bank and credit card statements for your expenses and begin narrowing down essentials for groceries/food, transportation, housing, utilities, medical expenses, and communications (internet and cell phone).
2. Harness the power of your network. After reviewing your edited budget, assess what funds you currently have available to pay down your debt or cover an emergency. If you do not have enough, make a list of the resources available to you. Look for:
- Community assistance: Find local food pantries and explore additional public benefits
- Family or friends’ support: If available, seek help from family or friends to help cover an expense
- Responsible credit options: If credit is available, consider consolidating your debts or speaking with a debt management agency
3. Set SMART goals. Make a plan to face your current financial difficulty by setting specific, measurable, attainable, relevant, and time-bound (SMART) goals of what you will do and the changes you will make to handle the source of your financial stress. If the SMART rubric is not a concept you are ready to use, try the STAR method–start small, create a method to track your progress, determine if your goal is attainable, and assess if the steps you are looking to take are relevant to your overall goal.
- Tip: For help setting goals, read our article: Jump Start Your Finances with Goals
4. Talk to an expert: While we understand that everyone faces stressful situations differently, many situations need additional assistance. Please consider seeking professional help such as Debtors Anonymous or financial therapy. Also, there is no shame in delving deep and getting proper mental health care from trusted professionals.
Still have questions?
A NYLAG financial counselor can assist you with setting financial goals like reducing debts, saving money, improving credit scores, finding debt management options, and creating a budget. Remember, knowing where your money is spent is the first step into prioritizing your financial needs and will help in reducing financial stress and anxiety. Connect with a NYLAG financial counselor.