Financial stress, economic anxiety, or whatever you want to call it… panicking because you’re tight on funds is no fun. It’s the reason many decide against having children or becoming a homeowner. It’s small stuff, too, like going to the doctors, buying a gift, or simply enjoying a date night.
Most Americans are struggling with money.
In fact, 40% of Americans don’t have money to cover an emergency. The paycheck-to-paycheck lifestyle is the norm with few options for getting out.
What’s causing so many financial troubles in American households? What are some ways how to deal with financial stress? Keep reading, you may find the answer.
What’s Causing Financial Stress in the States
Some financial stresses are out of our control. Others are the result of our lifestyle choices. The first step in overcoming them is identifying them.
The common causes of financial trouble include:
- A lack of savings acting as a safety net
- Crushing medical or student loans
- Economic inflation with stagnant wages
The wealth divide in the United States grows as many feel directionless. Outsourcing, layoffs, and automation threaten livelihoods. Lifestyle creep and social media influence cause financial dissolution.
Can we place some of the blame on ourselves? Of course, but that doesn’t detract the anxieties brought on from money troubles. Sometimes we need an affirmation to pull ourselves from the financial downward spiral.
This brings us to the following section…
How to Handle Financial Insecurity
Coping, handling, and overcoming financial insecurity is about two parts:
- Making a mental shift
- Taking on challenging tasks
Here are the different ways you can tackle money issues using both:
Yes, the first and most obvious answer is to create a budget. Not just any budget, though. A budget that works for your lifestyle, occupation, and goals.
Begin with two tasks:
- Recording all sources of income
- Recording all sources of expenses
Create a very, very detailed list by pulling transactions from your banking and card apps. This lays out every transaction so you can get real about the budget.
Your budget should include the basics:
Then expand into the what keeps you functional like cellphone or Internet service. Don’t discount the value of outings with friends and self-improvement.
In many ways, you’re budgeting with Maslow’s Hierarchy of Needs in mind.
Accounting for basics and self-love removes the swings brought on from financial stresses. You’re budgeting for physical needs while satisfying yourself psychologically.
2. Create and Follow a Prime Directive
A “prime directive” would include your budget and the exact steps to reach financial goals. The directive is your mantra, a hard-line set of steps you’ll follow every time you’re paid.
At this moment, you’re asking the big questions:
- What is my purpose?
- What are my goals?
What that directive becomes is wholly upon yourself. But, it should form into a financial flowchart to realize the goals.
An example of a directive would include the following order of finances:
- Pay the basic bills
- Pay retirement minimums
- Pay down debts
- Reinvest in yourself
- Pay more into retirement
- Save for big goals
Doing this activity creates a powerful conviction to take control of your finances. You become obsessed with the directive. In doing so, you naturally remove outside influences bleeding your finances dry.
3. Create and Tap a Safety Net
There is no shame in a handout when times are tough. Social programs, friends & families, and charities are there for that reason. Likewise, explore and research options early before your finances spiral out of control.
What are some ways to create or tap a safety net?
- Get help with living expenses through government benefit programs
- Create a list of local charities offering food and essential services
- You should see what’s available through lending and credit lines
- Nurture strong financial relationships with loved ones
First, tap your emergency savings built by your detailed budget and prime directive. Then, seek charitable contributions through local or government programs. Turn to friends and family in your dire financial times, too.
Only after exhausting your base options should you tap lending and credit. As part of this, consider pawning, selling via apps, or taking gig work to pay bills.
4. Find Comfort in Your Daily Life
- Do I absolutely need to do or have X right now?
- Can I sacrifice a little to have Y later on?
A good exercise is putting whatever you have in mind in a “30-day cooldown”.
You’ll wait 30 days before returning to said item or activity. Chances are you no longer have an interest in the thing after the 30 days. And, wouldn’t you know… you’re now saving money without thinking about it!
There are a lot of ways to apply this stoic mindset in spending:
- Finding cheap or free alternatives to expensive outings
- Having regular challenges to try, or quit, something
- Reflecting on your life and being okay with what you have/are doing
There’s no sense in losing control over what you cannot control. You’ll waste valuable time and resources trying to manage the financial chaos. Likewise, you’ll create unnecessary stress further exacerbating anxieties and depression.
The point: Find value in your day-to-day activities and who you know. Stop chasing the lifestyles you see through TV and social media.
5. Work On Yourself
Get real with yourself the same as you did with the budget:
- Do you have vices?
- What are your faults?
- Are you being honest?
Chances are your personal choices are impacting the financial security. It’s little things that add up like being irritable because you’re lacking sleep. Or, lagging behind in building valuable skills that’ll help you earn more money.
They call it the “$5 coffee” but disregard the coffee part. The point is that we all have little expenses that become part of the financial burden. So, find yours and either create better alternatives or drop it completely.
One Day at a Time Starts Today
There’s a great proverb one could apply to financial stress and it goes, “The best time to plant a tree was 20 years ago. The second best time is now.”.
Your financial woes aren’t overcome overnight. The little actions you do, today, build the great money habits you’ll use throughout a lifetime. Start by getting your mind right so you’re not debilitated by finances… then build off what works.
What’s the next step? Get educated, see more of our money guides. Gain and use as much financial knowledge as you can to see yourself free from the stress.