How to manage financial stress
With the economic news of 2024, it’s no surprise that many Americans are feeling financial stress—70% report concerns about inflation, economic uncertainty and rising interest rates. Managing personal finances can seem overwhelming, from missing payments to losing important documents.
While you can’t control the broader economy, you can take steps to manage your finances—and your stress. Building good financial habits is one way to avoid worries about money.
By organizing your finances and making informed decisions about saving, investing and spending, you can reduce financial stress. Let's look at ways to help you manage your money. We will start by understanding what financial stress means.
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Defining financial stress
Financial stress refers to the emotional strain caused by money-related issues. Anyone can experience it. It often arises from difficulties in meeting basic needs, such as paying rent, bills and buying groceries.
How can financial stress impact my health?
It's common to feel stressed about money from time to time. But when financial stress becomes financial distress, it begins to disrupt your everyday life and can become a bigger concern. For example, you might find yourself lying awake at night worrying about paying bills or struggling to enjoy time with friends because you're distracted by financial concerns.
If financial stress becomes overwhelming, it can take a toll on both your mental and physical health. There is a direct connection between financial stress and mental health. You might feel anxious when checking your bank account, avoid social events to save money or experience physical symptoms like headaches or stomachaches.
Tips to handle financial stress
It’s common to say to yourself, “Money stress is killing me.” But don’t worry, because no matter how difficult your financial situation may seem, there are ways to reduce stress and regain control. Here are five strategies to help ease money-related stress:
Tip 1: Talk to someone
When dealing with financial insecurity, it’s tempting to keep everything to yourself. However, sharing your worries with a trusted friend or loved one can help put things in perspective. They don’t need to fix your problems, just listen without judgment as you tell them that you’re stressed about money. Discussing your situation can make it feel less overwhelming and they might even offer solutions you hadn’t considered.
Tip 2: Take inventory of your finances
Ignoring bills or avoiding bank statements won’t help in the long run, it will only add to your financial insecurity. One way to stop worrying about money is to have a better understanding of your current financial situation.
Start by tracking your income, expenses and debts for at least one month. Identify patterns in spending and areas where you can cut back. Small changes like reducing nonessential purchases can help free up cash for more pressing needs.
Tip 3: Make a plan—and stick to it
Once you’ve reviewed your finances, create a plan to address specific problems. This could involve reducing unnecessary spending, finding ways to increase your income or seeking advice from a financial expert. Stay flexible and adjust your plan as needed, but remain focused on your goals. Setbacks happen, but the key is to get back on track quickly.
Tip 4: Create a monthly budget
A budget is crucial for managing financial stress. Include both everyday expenses and larger annual costs like insurance. Try to build in a cushion for unexpected expenses and set up automatic payments to avoid late fees. If you’re struggling to cover everything, prioritize essentials like food and housing before tackling debt.
While some see budgeting as a daunting task, it doesn’t have to be overwhelming. Using a budgeting app simplifies the process by tracking your income and expenses.
Start by taking your after-tax earnings, subtracting living expenses and what’s left is your discretionary income. With this clear picture, you can make informed choices about spending and saving. Simply knowing where your money is going can help you feel more in control of your finances.
Tip 5: Manage your overall stress
Financial challenges won’t disappear overnight, but taking care of your well-being can help. Regular exercise, relaxation techniques and getting enough sleep can all reduce stress. Focus on healthy eating and find time to enjoy activities that make you feel good. Appreciating small positive moments in life can also shift your focus away from constant money worries.
Don’t let social media pressure you into making bad financial decisions. It’s easy to feel envious of friends or influencers flaunting vacations or big purchases but remember that what you see is often a highlight reel, not the full story. If these posts are causing you stress, try limiting your time on social media or curating your feed to reduce those triggers.
Use the Rate App to manage financial stress today
There’s an app for just about everything, and managing your finances is no exception. You can easily find budgeting, investing, saving, and expense-tracking apps, as well as banking apps that let you move your money around with ease. These tools make it simpler to manage your finances and give you more control over your money. Knowing your financial situation at any time can help you make better decisions and stay on track to meet your goals.
That’s why we’ve developed the Rate App, which combines financial wellness with overall well-being. It’s packed with resources to help reduce financial stress, including information, tools and financial products that can help you pay down high-interest debt, save for a home or make improvements to your current home. You’ll also find mortgage, insurance and homeownership content.
The Rate App also features financial calculators and tools to guide your journey.
But the Rate App doesn’t stop there. It also supports your personal wellness with a library of free fitness and nutrition videos, designed to help you de-stress and live a healthier, happier life.
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