Nearly three-quarters of couples in a recent study say they're stressed about money. Here's how to relieve that stress.
Do you sometimes lie awake at night thinking about bills that need to be paid? Does it feel as though you're drowning in debt? If this describes you, you might take solace in the fact that you're not alone. A recent report released by the American Psychological Association (APA) showed that approximately 64% of adults say that money is a significant source of stress in their life, while 73% of those with a household income of less than $50,000 report that money is a significant source of stress.
The bad news is that stress can be responsible for multiple health problems, including fatigue, headaches, and depression. Over time, stress can contribute to more significant health issues, including high blood pressure and heart disease. The good news is that there are some simple steps you can take to reduce or eliminate some of the financial stress in your life.
1. Stop and assess. The first step in reducing financial stress is to look at your situation objectively, creating a snapshot of your current financial condition. Sit down and list all of your financial obligations. Start with the items that are causing you the most stress. For debts, include the principal due, the applicable interest rate, and the minimum payment amount. If you're not already doing so, review your bank account and credit-card statements to track where your money is going. The goal here is not to solve the problem; it's to determine and document the scope of the problem. You might find that this step alone significantly helps alleviate your stress level (think of it as facing your fears).
2. Talk to your spouse. It's important to communicate with your spouse for several reasons. First, you and your spouse need to be on the same financial page—any steps you take to improve your situation are going to be most effective if pursued jointly. Second, not being on the same page as your spouse is only going to lead to additional stress. In fact, the APA report showed that 31% of spouses and partners say that money is a major source of conflict or tension in their relationship. Additionally, your spouse or partner can be a valuable source of emotional support, and this emotional support alone can lower stress levels.
3. Take control. First, go back and take a look at where your money is going. Are there changes you can make that will free up funds you can save or apply elsewhere? Even small changes can make a difference; and exerting control over your situation to any degree can help reduce your overall stress level. Start building a cash reserve, or emergency fund by saving a little bit each paycheck. Think of the emergency fund as a safety net; just knowing it's there will help reduce your ongoing level of stress. Work up to a full spending plan (yes, that's another way of saying a budget) where you prioritize your expenses, set spending goals, and then stick to them going forward.
4. Think longer term. Look for ways to reduce debt long term. You might pay more toward balances that have the highest interest rates. Or you might consider refinancing or consolidation options as well. Beyond that, though, you really want to start thinking about your long-term financial goals, identifying and prioritizing your goals, calculating how much you might need to fund those goals, and implementing a plan that accounts for those goals. Having a plan in place can help you with your stress levels, both now and in the future.
5. Get help. Always remember that you don't need to handle this alone. If the emotional support of a spouse, friends, or family isn't enough, or the level of stress that you're feeling is just too much, know that there is help available. Consider talking to your primary-care physician, a mental health professional, or an employee assistance resource, for example.
A financial professional can also be a valuable resource in helping you work through some of the steps discussed here, and can help direct you to other sources of assistance, like credit or debt counseling services, depending on your needs.
The most important thing to keep in mind is that you have the ability to control the amount of financial stress in your life.
Jordan Niefeld, CPA, CFP believes everyone has a right to achieve a secure and prosperous financial future so that their time can be spent with family, friends, and the important things in life. He is very passionate about guiding individuals toward their ultimate life goals in a very comprehensive and thorough manner while utilizing a 4 step process (Discover, Diagnose, Design & Deliver) that separates him from the rest.
