The past two years have caused tremendous financial stress for many households. From a global pandemic to the highest inflation rate in 40 years, many U.S. residents have been negatively affected by these economic conditions – financially and mentally. Research has found positive associations between depression and various indicators of financial stress, such as debt or debt stress, financial hardship, or difficulties.
Lack of financial planning and inability to manage money effectively can result in mental health conditions, such as depression and anxiety, due to excessive stress. If you’re struggling to manage your money, it might be helpful to consider the following tips to reduce stress and gain control over your finances.
Eliminate Financial Clutter
Have you noticed how clearing your work desk or decluttering your living room can help you feel more at peace? Similarly, organizing your finances and eliminating clutter can positively influence your mental health.
- Tracking spending: When you know how much you’re spending, you can pinpoint areas where you can spend less and create a new budget to meet your financial goals.
- Preauthorize bill payments: Forgetting to pay bills result in additional fees and penalties, causing unnecessary stress. Automating your payments will reduce the risk of missing payments, allowing you to stay on top of your bill payments.
- Organize debt: If you have multiple credit cards, lines of credit, and loans, things can get messy if you’re not organized. Keep a spreadsheet of each debt and categorize them based on their interest rate to identify which ones to pay first.
Stick to Your Budget
A budget is a powerful tool that helps you better understand and control your finances. Although creating a budget and sticking to it is one of the most obvious steps in management, the task can be challenging for many individuals. The key to managing your budget is creating one that is realistic. Creating an unrealistic budget can lead to stress when it becomes challenging to maintain.
Once you have a complete picture of your monthly expenses, look for ways to redirect some areas causing financial stress. This may involve counting your monthly cash inflow, trimming unnecessary expenses, and being realistic about how much money may go into miscellaneous expenses each month.
Create an Emergency Fund
Access to money for emergencies – such as job loss, medical care, and vehicle repairs – can significantly relieve financial stress. However, maintaining an emergency fund can seem overwhelming, especially with enough funds to cover significant expenses. If you don’t have enough money left over from your income to add to the emergency fund, consider borrowing money ahead of time and paying it off as you go.
Getting a short-term installment loan to build your fund is a great way to kickstart the fund and set money aside for emergencies. This reduces the financial stress associated with scrambling for money and applying for the high-interest debt at the last minute. Use a reputable platform like Flexmoney.com to easily access the cash you need to build your emergency fund. Their streamlined application process allows you to apply for funds online and customize your loan based on your needs and repayment ability. Not only does this save you from last-minute stress, but it also gives you time to pay off the loan before you face financial constraints.
Read More: 5 Tips for Your Complete Financial Planning
Financial constraints are a significant concern for many U.S. households. The key to reducing stress related to money is following the right strategies to gain control over your finances and make informed financial decisions.