10 Tips to Manage Financial Stress

Financial challenges are one of the biggest reasons for stress in a person’s life. After all, you need money to do just about anything. The leading causes of financial stress are typically from losing a job, increasing debt, and wondering how to pay bills each month. The good news is that there are several ways to manage your financial stress at any income level.

Tips to Manage Financial Stress

Here are some proven ways to manage your financial stress and be able to enjoy your life.

  1. Make one financial decision at a time

    The first thing you want to do is make sure that you are not making more than one major financial decision at one time. For instance, if you are looking at buying a house, you should not consider purchasing a vehicle.

    Also, if you have significant debt, you may not want to consider taking out any more major debt such as a mortgage or large car loan. Concentrate on dealing with one big financial issue at a time. This should allow you the opportunity to keep your finances under control.

  2. Keep track of your spending

    When people are stressed out, often people do not know exactly what is stressing them out. For instance, if you say that you have money problems, then what exactly is the problem?

    Here are some of the possible money problems you could have:

    • You do not make enough to pay your monthly bills.

    • You have a significant amount of debt.

    • You cannot control your spending.

    • You have a spouse or a partner with spending issues.

    • Your vehicle requires a large repair.

    • Your home needs an expensive repair.

Once you know exactly what is stressing you out, you will be able to address the issue. The best way to understand what is stressing you out is to keep track of your spending. When you keep track of your spending, you should be able to do the following:

    • Budget your money

    • Uncover hidden expenses

    • Have a clear view of your finances, both incoming funds, and outgoing expenses.

  1. Create a plan to fix the problem

    Once you know what is stressing you out about your money, you should address the problem. For instance, if you discover that you are paying too much interest on your credit card, you can plan to pay down that credit card or contact the credit card issuer to see if you can get a lower interest rate.

  1. Do not spend more than you make

    One of the best ways to free yourself from financial stress is simply not spending more than you make. For some people, that’s hard. However, it is easier to simply cut your spending than trying to figure out how to afford everything. Here are some ways that you can cut spending:

    • Buy in bulk - Yes, you spend more buying in bulk. However, you will be paying less per unit.

    • Find less expensive alternatives - Instead of eating out, try making the same version of your food at home.

    • Look for sales - Sales can help you save big on major purchases.

    • Purchase store brand or generic products, often the ingredients are the same while the price is simply lower. Always check active ingredients to ensure a like-for-like purchase.

  1. Try to Increase Your Income

    Once you have controlled your spending, you can put yourself in a position to try to increase your income. You do not need to make a dramatic jump in your income in order to reduce financial stress in your life. Simply making an extra $100 - and not wasting it - can make a big difference in your life. Here are some ways to increase your income:

    • Request overtime at work

    • Be willing to fill in for someone else’s shift at work

    • Have a side hustle (working online, delivering for UberEATS, flips items on eBay)

  1. Create a savings and retirement plan

    Most people are not saving for retirement; this can lead to huge stress when you get older. To give you some peace of mind, start saving today. Sure, saving $50 a month does not sound like a big deal. However, if you are 30 years old and save $50 a month and place it in an S&P index fund at a 7% return, you could have a little over $90,000 at age 65.

  1. Avoid trying to “Keep up with the Jones”

    One of the things that hurt people - at all income levels - is trying to keep up with the neighbor’s spending. Sometimes it could be a small purchase like new shoes. In other cases, someone may feel compelled to get a new car because all the neighbors drive luxury vehicles.

    The fact is you do not know your neighbor’s financial situation. There is a good chance that the Joneses are spending everything they make - potentially going into significant financial debt - appearing prosperous. Keep an eye on your wallet, not your neighbor’s wallet, and you will be well on your way to being financially at peace.

  1. Avoid over-financing

    Financing can allow you to own something without paying the full price. However, over-financing certain items can add stress to your life. For instance, just because you can get financing for a $40,000 car does not mean that you should buy a $40,000 car. The payments may be hard for you to make. Instead, try to finance about half of what the banks will allow.

  1. Cut down on the number of credit cards that you own

    Try to cut down the number of credit cards you own to avoid dealing with multiple interest rate changes. Also, consider the fact that having more credit cards could lead to more late fees and other charges.

  1. Seek financial counseling

    One of the best ways to reduce stress is to get some help. Financial counselors have dealt with just about every type of financial issue and have a solution for all of them. You can get free financial counseling from organizations such as NFCC.org

Get free from your financial stress

You do not have to lead your life riddled with financial stress. Try one or more of the steps above. By taking control of your finances, you should be able to control your money without having your money control you.

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