Anxiety around money can be one our greatest life stressors. This is a difficult time for many people as it involves uncertainty about jobs, the economy, savings, and investing. Ascent has found that 60% Americans are worried about their money right now. We are still learning how the pandemic affects the world.
1. Separate emotions and finances
First, don’t panic. This might be easier said than done. But one of the first steps to managing financial anxiety is separating the times you’re feeling emotional about money from the times you actually take action on it. Feeling super stressed? It’s not the time to crack open your budget and problem solve. Call a friend. Take a break and have a cup of tea. Take a walk. Take some time to get away from financial problems solving and really emotional states.
2. Review your budget
Take action and identify areas where you can reduce your spending. It can be overwhelming to review a month’s expenses when you are under financial stress. Truebill or Bobby can help you find subscriptions and recurring expenditures in your spending so that you can make an informed decision about what to cut. It can bring you peace of mind to reduce your spending.
3. Refinance options are an option
Refinancing your debt might be an option to help shrink monthly payments, but it’s important to know how this will affect your total amount repaid (sometimes, a refinance can extend the amount of time you might be paying back an overall debt). However, it can provide some relief to your budget. It is worth talking to your banks and creditors about possible options to lower your rates or payments.
4. Reexamine your short- and longer-term savings plans
Long-term savings should not be considered short-term. When you’re investing for distant goals like retirement, it’s important to allow yourself the decades of both time value of money and ability to weather various financial ups and downs. That type of investing is money that we ideally should not need access to for years and shouldn’t be part of an emergency financial plan if at all possible. Rainy-day recovery funds should be taken from short-term savings and stored in savings products that are liquid and more easily accessible in difficult financial times.
5. Know your financial facts
It is a good idea to go back to the basics when you are facing financial challenges. Information is power. This is why it is important to have financial knowledge. This means you must not ignore balance updates and notifications, bills, or notifications, no matter how challenging they may seem. It also means getting clear on rates you’re paying on debt, how your bills are timed, and what your options are to adjust your income and expenses in the short term.
6. Financial discussions require that you dedicate time
Financial stress can make our lives feel overwhelming and present in every moment. Especially when we’re in a partnership, it can be easy to let financial worries permeate all aspects of household discussions. Another important way to mitigate consistent financial stress is to set specific times and boundaries where you’ll actively work with your partner to work toward financial solutions. Plan a date and time to discuss money, set a timer, and start your discussion with the one or two goals you’re hoping to achieve.
7. Concentrate on the future
In uncertain times, our instinct is to rush to the spending side in our personal financial statements. But our financial stability is only one half of a coin. There are ways to improve our financial condition with the money we earn. Is there a possibility to negotiate spot bonuses for extra work you’re doing? Are there any products you could resell to make money? Is it time to start a new business? It can be difficult to innovate income opportunities in tough times, but sometimes necessity leads us to new creative paths.
8. Translate your stress into concrete actions
If we are motivated by emotion, our emotions can be a financial tool. Put pen to paper if you feel financial stress creeping up. What are you concerned about? What’s the next immediate thing you could do to bring clarity to your finances? Who can you reach out for assistance in this matter? A structured set of questions can help you find a positive next step rather than worrying in circles.
9. Plan for the worst case scenario
It might seem scary, but calling out a worst case scenario and knowing what steps you’d take in that situation can be empowering. Are you worried about losing work? OK, say you lost your job. What’s next? How do you begin looking for a new job? What are the steps to make it happen? How can you balance current income and savings? What expenses can be cut quickly and what would take longer? It’s your personal business continuity plan.
10. Ask for suggestions and be vocal
In our daily lives, we all have experienced various levels of financial stress. Keeping the anxiety private and keeping it to yourself can make it more difficult. Talk to a trusted friend or family member about your struggles. Being open about our financial struggles allows our loved ones to share solutions or just the support they need to navigate stress money.
Source: The Every Girl