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Debt Stress

Dealing with Financial Stress and How You Can Prevent It

Many people stress out about finances. Most people have lost sleep or worried endlessly about money, bills, debt, or making ends meet. It’s natural to be concerned about finances. Money is important and if you don’t have your financial situation under control, you can worry that you won’t be able to afford your housing costs, pay for your children’s education, feed your family, or pay your bills and debts.

This stress can get even worse if you owe debt and are being called by creditors or collection agencies. Receiving these calls can be incredibly stressful and some collection agencies can even get to the point of being harassing. A lot of people who are in this situation find themselves avoiding the phone or the mail entirely.

No matter your financial situation, feeing anxious and stressed about money can negatively affect your life. You could lose sleep, feel depressed, and have difficulty eating well, exercising, and focusing on work. Money stress can take over your entire life. Here are some tips on how you can avoid it.

Communicate

If you’re in a couple, it’s critical to communicate about your finances. A lot of financial stress can be resolved by talking about your worries and fears with someone who cares. If you’re having money problems, sit down together and review the situation. Avoid placing blame on yourself or your partner, as this can lead to an argument. Instead, focus on finding solutions that both of you agree with.

It’s also a good idea for the two of you to set some financial goals and create plans to reach them. This can help you prioritize your spending and having a focus will likely calm you down.

Look at the Numbers

Many people who are in debt or who are spending more than they should avoid looking at their bills and statements. They don’t want to know the reality of the situation. However, this doesn’t help improve your finances. In fact, it can make things worse as interest charges on debt will quickly build up over time.

When you’re feeling motivated, take a look at all of your expenses and debts. Figure out how much you are spending each month. Then create a plan that makes it possible to make your debt payments and still afford your living expenses. If you can’t make everything fit, you’ll need to make some cuts. Look at your spending and figure out what’s really important to you. Then consider reducing what you spend in areas that aren’t as critical. Once you have a plan that balances, you’ll feel significantly more comfortable and less anxious about money. Being organized and focused reduces stress.

Once you have your budget prepared, be sure to track what you spend money on. Many people feel anxious because they don’t know where their money is going each month. When you track your spending, you’ll feel more in control and this will help ease your anxiety.

Plan to Build an Emergency Fund

A lot of people who have financial stress worry about “what if” scenarios. What if you lose your job? What if you’re injured or ill and unable to work? What if your car breaks down and you need to make an expensive repair? These situations can cause stress, especially if you’re living paycheque-to-paycheque. If you’re using all your income to afford your living expenses, any unexpected costs can cause serious trouble. Knowing this caused incredible anxiety and stress.

The solution is to start building an emergency fund. Everyone should have at least three- to six-months of expenses saved for emergencies. This gives you enough money that you would be able to pay your living costs for a few months if you lost your job. Having an emergency fund can provide significant peace of mind. If you know that you have some money that can help in emergencies, you will feel much less anxious about the “what ifs.”

Of course, it’s impossible to save three- or six-months of expenses overnight. This means you’ll need to work slowly and have a plan. Insert a “savings” category into your budget and treat it like any other monthly bill. Make regular payments into your savings and, over time, you’ll build up a fund that can help you cope with the unexpected nature of life.