Way back in 2017, it was reported that 78% of U.S. workers were living paycheck to paycheck. Not only were more than three out of four employees struggling to pay their bills, but a full quarter of them stated that they didn’t set aside any savings each month.
One pandemic later, the situation has only gotten worse.
The Ongoing Financial Struggle
The coronavirus pandemic could not have come at a worse time. A generation of millennials, in particular, was just beginning to find some momentum after having gone through the Great Recession one short decade earlier. Their fledgling collective climb up the financial ladder was dashed as quarantines and government shutdowns sent millions of individuals home for months at a time.
By June of 2020, it was reported that nearly 30 million jobs had been lost during the early phases of the pandemic — and the situation only continued to spiral from there.
A year after the pandemic began, many jobs had slowly been regained and occasional stimulus checks and other relief efforts had been sent out to help reduce the suffering. Even so, it has hardly been enough to solve the economic problem and setbacks that the pandemic created for so many.
How to deal with financial stress
Along with external help, each individual must also do their best to salvage their financial state and create a situation that helps them manage the ongoing stress that it has created. Below are several recommendations to help you do just that.
Ways to Reduce the Stress Caused by Finances
If you’re amongst the ranks of those plagued by financially-induced stress, you should fight back. Maintaining a victim mentality, no matter how justified it may be, will hurt more than it helps.
Instead, consider the following tips and suggestions to help you pick yourself up, dust yourself off, and make the best of your situation going forward.
Actually Review Your Finances
First up, it’s important to finally tackle the boogeyman that is your finances. When things get stressful, it’s tempting to simply ignore those notifications, leave your bank account untouched, and neglect to pay bills.
However, the hard truth is, the longer you procrastinate with addressing your finances, the worse the problem will be. To save yourself from future stress, it’s important to start the healing process by actually tackling your finances right here, right now.
This doesn’t mean you need to resolve everything — or even anything — right away. Instead, start by simply reviewing your current budget, outstanding bills, loan payments, and any other significant factors that are weighing on your finances.
Once you have a reasonable grasp of the situation, you can begin to look for small ways to make a difference. For instance, you can:
- Make budget cuts: Comb over your budget and look for ways to reduce your expenses. Can you cancel some of your streaming subscriptions? Can you reduce your utility bills by patching duct leaks, unplugging chargers, and keeping your freezer full? Every little bit counts — and it can help you regain a calming sense of control over the situation, as well.
- Negotiate bills: If you have an overwhelming pile of bills that have been stacking up, don’t just ignore them. Contact lenders and ask them if you can negotiate your bills. You might be able to defer a mortgage or rent payment or extend a due date on a credit card bill.
- Utilize help: There are many external financial lifelines that you can take advantage of. For instance, many community assistance programs can help with things like paying your mortgage or putting food on the table.
Each situation is different, and you’re going to need to figure out which resources can help you the most. The essential factor is making an effort to understand your finances and address the most important items as soon as possible. Once you’ve done that, you can begin to gain a sense of control again.
Set Goals and Create a Plan
Once you’ve reviewed your budget and gotten a handle on your current financial state, you don’t want to stop. Capitalize on your current momentum to start setting up goals and planning out how you can improve your financial situation as you move forward.
This doesn’t have to be a quick fix. On the contrary, truly healthy finances can take years to cultivate — and that’s okay. The important thing is that you start to make an effort to make a difference.
Start by setting SMART financial goals. These should be:
- Specific;
- Measurable;
- Achievable;
- Relevant;
- Time-bound.
Along with sticking to the SMART goal mindset, it’s also wise to set up financial objectives for both the short- and long-term.
A short-term goal might consist of finally saving up an emergency fund to help head off the next expense. It could also be figuring out how to take out a home improvement loan to boost your home’s equity before you sell.
Long-term goals could be something as high-minded as saving for retirement or investing in ULIP or mutual funds. If you’re in a financial fix, though, it may have to be a bit more attainable.
For instance, if you find that you need an apartment but still have bad credit, you may want to set a long-term goal to boost your credit score more. You can do this quickly and steadily by:
- Making payments on time, as perfect payment history is the number one biggest factor for your score;
- Paying down existing debt and avoiding taking out new loans unless you absolutely need them;
- Reviewing your credit report to dispute errors and fix derogatory marks, such as those caused by a claim by a collection agency.
Things like setting up an emergency fund and boosting your credit score are excellent first steps in creating a financial plan to turn your finances around.
Find Affordable Stress-Management Habits
Finally, once you’ve done everything you can for your finances, look for small ways that you can directly address the stress itself, as well. Since you’re talking about money-related stress, it’s important to do this in affordable ways, such as:
- Sticking to a routine;
- Working out at home;
- Learning to cook;
- Finding an affordable hobby.
Destressing without spending money is an excellent way to help you calm down and stay mentally and physically healthy.
Overcoming Financial Stress
Financial stress is a normal part of life. Nevertheless, if you deal with chronic money-related pressures and anxieties, it can become overwhelming after a while.
The first step in overcoming the issue is picking yourself up and looking for ways to make a difference. Review your finances, make a financial plan that fits your goals and needs, and then find little ways to release your stress healthily.
