6 tips on how to cope with financial stress

Do you have a pervasive feeling of panic about your financial situation? Then you may be suffering from what Oprah magazine calls “Money Anxiety Disorder.”. Money, or rather lack of it, is a chief cause of this complaint. But often that’s only part of the problem. Here are six steps to help you feel in control of your finances.

Pinpoint the cause of your financial stress, then make a plan

What exactly is the problem you’re facing? Do you spend more than you earn? Have you maxed out your credit cards? Do you not have enough money saved for retirement? Have you saved nothing at all for retirement?

Try evaluating your situation objectively and without getting overly emotional. Look at things as if you were an outsider looking at your spending and saving habits. Then, write down what is causing your stress and make a commitment to a budget or plan that will handle them.

Use resources that are available to you

A lot of people believe that if they just try harder, they’ll succeed. Focus, determination and willpower are important, but sometimes a helping hand from experts can give you the extra boost you need.

To help develop your financial plan, don’t be shy about using available resources.. If your company offers a financial wellness program as a benefit, take part in it. If you are deep in debt and need to pay off big bills to rebuild your credit, get in touch with a debt management company. (Alliant members can use the services of GreenPath Debt Solutions for free).

If you need to develop a retirement and investment plan, consult with a financial advisor. If you need to learn more about personal finance and want tips on how to make smarter financial moves, read financial books or articles, such as those in Alliant’s Money Mentor blog.

To get an ongoing, clear sense of your income and expenses, use a personal financial management (PFM) tool to create and manage a budget, track your spending and identify ways to save and meet your financial goals.

Earn extra income

Perhaps you can make money with another source of income while you keep your day job. You may get a second job, do freelance work or sell big-ticket items – such as a spare car – that you have but no longer need. A side hustle like meal delivery might be a great option since the pandemic has driven more people to order out.. 

Build an emergency fund

The best move you can make to feel more financially secure is to build up an emergency fund. Ideally, it’s good to have enough saved so you can live off the savings for six to 12 months if you face a serious financial setback like a job loss or major health issues.

In fact, studies have shown that having an emergency fund is a better predictor of financial well-being than paying off all your debt.

Focus on the positive

While you’re planning for tomorrow, enjoy the benefits of living in the now. Rather than obsessing about the doom and gloom of having financial problems, take some time out for yourself. If you feel fear, shame and anger about your financial situation, acknowledge that. But then take steps to be gentle on yourself. Think about any positive financial indicators, such as your home going up in value or the money you’re saving into your retirement fund at work.

Remember, for what it’s worth, that many highly successful people had their share of financial hard times along the way. Your net worth does not equal your personal worth.

Steer clear of negative coping habits, such as alcohol abuse, gambling, overeating and impulse buying. Instead, try taking a walk, working out at a gym, yoga, meditation or journaling. While these activities won’t make you richer, they can help you handle and feel better about the money you do have.

Keep your guard up

If you take steps to achieve and maintain your financial well-being, such as paying down debt and saving more, congratulations! But remember that it’s also important to “keep on keeping on” with those efforts. The coronavirus pandemic has  made a lot of people feel how financially vulnerable they are.

The touchstone of once having Money Anxiety Disorder is not such a bad thing. If anxiety does motivate you to make positive changes and to save more, you may not want to relieve yourself of all money anxiety, as it can continue to motivate you so you don’t slip back into bad money habits.

 
Check out these other money tips:

• 4 myths about online savings accounts
• 7 steps to reach financial goals more easily
• Learn why verifying your credit score is super helpful
• Your 6-month plan to cut expenses