How to Beat Financial Stress


6 No Nonsense Tips to Help You Cope

Life is what happens when you are busy making plans, according to John Lennon. I would like to add that life is what happens when you have fully funded your emergency fund. That same situation could be even more stressful if you don’t have funds set aside for emergencies. According to Bankrate’s most recent Financial Security Index, 28 percent of adults in the United States do not have an emergency fund at all. While 1 in 4 adults do have an emergency fund, they don’t have enough to cover three months of living expenses. Couple these statistics with the fact that many Americans are living paycheck to paycheck it should come as no surprise that people are dealing with a lot of financial stress. Having the tools to beat financial stress can make unexpected financial emergencies much easier to manage.

Stress is unavoidable. However prolonged stress can lead to high blood pressure, heart disease, obesity, diabetes, depression and anxiety. Financial stress comes with the added adverse effects of behavior changes, relationship strain and deeper depression. With this list of potential life altering stress affects I am providing you with six no nonsense tips to help you beat financial stress.

Don’t avoid your debts

When debts begin to pile up and you can’t see a way out many people simply avoid their debts. They don’t open the mail, answer the phone calls and generally try not to think about the mounting debt. While this may seem like a good idea your subconscious still knows that the debts are piling up and it will manifest in your behavior. You may find yourself feeling more tired then usual or snapping at your loved ones more often. This will lead to tension in your relationships which then piles to your stress.

The better way to handle these situations is to contact your creditors and be honest with them about your situation. Most credit card companies offer hardship assistance programs and will work with you to temporarily lower your payments or create payment plans to get you back on track. Often you can go through these programs without closing your accounts. If you are severely delinquent and your account has gone into collections, you will want to first verify the debt with that company and then setup a payment plan.  Utility and mortgage companies also have hardship programs as well and will work with you to bring your accounts current. Having an arrangement in place will stop the phone calls and letters giving you peace of mind that you are moving in the right direction.

Cut expenses

Take a long hard look at your expenses. Take out a sheet of paper or my Free Budget Planner to track your expenses. Having all your expenses in front of you in black and white will give you the chance to really see where your money is going. The biggest budget vampires are eating out for lunch and dinner. Another budget category that sneaks up on people are subscriptions. You may be surprised at the amount of money you are spending on small things like Hulu, cloud storage, apps that you don’t use and that free trial you forgot to cancel. Don’t forget about annual subscriptions as well like antivirus programs, gym memberships etc.

Once you have everything listed add them up and see what the total is. Once you pick yourself up off the floor,  go through this list with surgical precision. Cut items that you barely use or that are simply too expensive. If you can pare down your cell phone plan and if streaming will get you what you need then those are great places to cut. I shaved $100 off my cable/internet bill by cutting cable and paying for local TV w/HD and high-speed internet. With amazon prime video, Hulu, and Netflix we don’t miss our favorite shows and I am paying less overall.

A Cable Cutting Side Note

One of the first things people will tell you when it comes to cutting expenses is to cut cable and your cell coverage. These are great suggestions however this may not always be the best solution. Before you call your cable and cell phone company to cancel review your options in your local area. You may get a cheaper cell phone plan from a different company only to find that you now have crappy service. With most households no longer having landline phones, you want to make sure that you have reliable communication options. Double check your streaming options as well. If you watch OWN Network, ESPN or other specialized network make sure that the streaming services you are switching to offer those channels. If they are not included, you could end up paying more than you were paying with cable.

Add Additional Income

If you have stretched your dollars as far as they will go and sold all unused items, it is time to consider adding additional income. It’s not fun working multiple jobs and it can cut into your social life which can be a bummer. However, if your income does not match your expenses and/or debts you will need more money. Short of winning the lottery the only way to get more money into your bank account is to get a second job. There are many things that you can do to add additional income like drive for Lyft or work retail. If you have skills like doing hair, babysitting, cleaning homes or carpentry skills you could advertise on Facebook marketplace or local neighborhood apps like Nextdoor. If you are a single parent or are caring for family members and time is limited, you could do things like Lyft/Uber or work from home jobs in your spare time.

The amount of time you put into your second job is dependent upon how quickly you want to change your financial situation. Working multiple jobs will mean less free time for family and friends which can cause its own set of pressure. No longer being as available for spur of the moment outings weekends and evenings will cause people to complain. They may not understand your financial goals, and this can cause some friction. When the comments roll in about how busy you are all the time just let them know that you have big goals that require massive action. It won’t last forever but this season of no will have lasting effects and will reduce your stress.

Create/Realign Your Goals

Financial stress can be exacerbated by a lack of direction. You can cut expenses and add additional income but if you don’t have a clear goal in mind you will find yourself right back where you started. If you already have your financial goals mapped out review them. Realign them for your current goals. If you don’t have any financial goals now is a great time to start. I recommend creating a 90-day, 6 month and 12-month plan. If you are behind on your bills your plan could look something like this: The yearlong goal save $1000.  Six-month goal: Stay current on bills. 90-day Plan could include creating a budget and making payment arrangements with creditors.

Your goals don’t have to be lofty or match anyone else’s plan, but they do need to feel attainable. There should be just enough room to stretch but not so big that you will end up giving up. Schedule quarterly check-ins with yourself to review your financial goals. Add them to your phone calendar so that you don’t forget. This way you will be able to stay on target and adjust as needed in real time.

Change your mindset

Change begins in the mind. If you spend a lot of time berating yourself for poor money decisions then it will be difficult for you to move past it. Take some time to acknowledge your missteps then move past them. Living in the past will not help your present situation. What’s done is done. Create new positive mantras to say when those negative thoughts start to creep in. You can put positive affirmations on your desk and the lock screen on your phone. Follow positive financial education sites on social media and read books about improving your finances. All of these things will help change the negative inner dialogue is playing in your mind. With a positive mindset you can achieve any goal you set for yourself.

Change what you can control

The final step to reducing financial stress is to change what you can control. The one thing that you have total control over is your mindset. Now that you have some ideas about changing your thinking you will be able to move forward with confidence. Once you have begun the journey of mastering your mindset create a budget.

I’m sure you thought I was going to go with more esoteric recommendations but the truth of the matter is that without a budget you will never have true control over your finances. Outside of your mindset this is the second most important thing that you have control over and is fully in your power to change. Not knowing how much is coming in or going out it can feel overwhelming. It also leads to overspending and uncontrolled debt. Creating a budget gives you control over where your money goes and reduces the stress of most financial surprises. When those surprises spring up you are better able to manage them because you will have budgeted for them. With these 6 tips you will be prepared to handle financial stress with more grace than you ever have before.


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