Manage Your Financial Stress

9 Steps to Manage Financial Stress

Sooner or later, you’ll probably deal with some variety of financial stress. Indeed, many New Zealanders are in this position already, which might be caused by cost-of-living pressures, a job loss, health troubles, or even money troubles in your relationship.

Whatever the cause, being worried about money takes a mental and physical toll, plus it can strain relations with your significant other, family, workmates, and friends.

Everyone deserves the chance to live a comfortable and happy life, free from unnecessary financial worries.

Financial Stress Symptoms

To help self-evaluate your current financial stress levels, here are some questions to ask:

1. Do you control your money, or does it control you?
2. Are you feeling uneasy when you think or talk about money?
3. Do you often think negatively about your current and future finances?
4. Have you woken up lately with money on your mind? Or struggled to sleep because of money-related thoughts?
5. Is there a chance you’re ignoring issues, or are in denial about your finances?
6. Are you gaining or losing weight?
7. Have things you previously loved to do now stopped interesting you?
8. At the extreme end – Are you having panic attacks often? Or feeling depressed?

Of course, these are just a few signs and your warning indications may be different from the next person.

How Do You Relieve Financial Stress?

Below are nine ways to relieve your financial stress, take control of your finances, and feel more at peace.

1. Find the Source of Your Financial Worries

While there are potentially many reasons you might find money is causing worries, you need to really look at what bothers you the most about your finances.

For example, many times, we turn to activities that can be doing harm and we think those things are the problem. We might be spending a lot shopping, smoking, gambling, drinking, or other ways to feel some relief. Most often, these things aren’t the problem at all – they’re just a symptom and there’s another issue which is causing trouble beneath the surface. Try and dig a little deeper to find what the real issue or concern is.

Ask yourself, what is it that if you specifically changed, would make you more at ease and less worried?

Maybe it’s eliminating all your debt or earning more money so you can start saving or investing. Maybe it’s only one major thing, or maybe you have a list of a few things:

• A job loss or uncertainty about a job
• Credit card or consumer debt
• Low income level and ability to save and invest
• Low interest rates – especially for retirees relying on savings
• Volatile share markets, which can make your KiwiSaver scheme and other investment values drop
• Relationship trouble
• Lack of financial literacy
• Bills, such as for dental work or to fix a car
• Unexpected emergencies not listed above
• Increased living expenses – possibly overspending and shopping.

Some of these examples can be financially devastating.

Whatever the case, make sure you sit down and really think about “what” and then “why” these areas trigger your financial stress. This can be the first building block to getting on top of things.

2. Tackle One Issue at a Time

If you have a few money problems, your finances can certainly feel overwhelming. This can snowball and create a situation where you might feel like you have no control or even know where to start.

It’s important to prioritise matters. So, after you’ve identified your biggest issue (or issues), you can start to focus on the main source of the problem.

Be realistic when you determine what you can achieve, and then dedicate yourself to following through each month. For example, this might be promising yourself: “Each month I will spend less and put the difference toward my debt so my balance declines by at least $100.”

3. Learn How to Handle Money Stress

How you personally handle such situations will be different from the next person and will of course differ depending on the preparation you’ve been able to put in beforehand.

Even financially stable people can still stress about money as well and worry about their own financial future.

During the current tough economic times (the recession that New Zealand has entered), it’s okay to accept and acknowledge a little stress. Be brutally honest with yourself about how you might handle that stress and be honest with yourself that the overall New Zealand economy is nearly certainly going to get worse before it gets better – which could impact you further.

Look for healthy ways to manage your stress, like working out, meditating, taking a walk, listening to music, creating something, or learning a new skill — anything that helps you relax and think more logically.

If you need more help, reach out to someone you trust, or even a professional to help your mental health.

4. Declutter Your Budget, Then Stick With It

Take control of your finances by setting aside some time to schedule, organise, and declutter all the money coming in and out of your bank account. The more control you have, the less stress you will feel.

There are a heap of great tools to help you do this. You can use this online budgeting tool, or just download a budgeting app to your smartphone or tablet – there are plenty to choose from.

5. Set Realistic Goals

Financial goals will make a world of difference. It helps you have something to strive for and can help you stay motivated.

Yes, it’s cool to have long-term and challenging goals. But if you’re financially stressed, it’s usually best to keep your goals simple, short-term, and achievable. This might be:

• Find three ways to save a set amount of dollars this month
• Put a certain percentage of extra money towards debt repayments this year
• Put a specific dollar amount from each paycheck towards savings

When you can cross a goal off your list, it will lift your spirits and keep you motivated towards achieving another.

6. Build an Emergency Fund

An emergency fund is a savings account meant to cover unexpected expenses and financial emergencies. Building an emergency fund may seem tough at first, especially if you are struggling to make ends meet. Start to build it up by putting aside a small amount, maybe $10 or $100. You might consider selling any unused items around the house to build up that cash even quicker.

If you’re starting from scratch, try working towards amassing a $1,000 sum. Then, once you’ve achieved that, as a guideline, you should aim to have three to six months' living expenses set aside, though individual circumstances vary.

Once established, it can help to know you have a financial cushion in place and this can help reduce anxiety and stress about money.

7. Ask For Help – From the Right People

Sometimes, financial stress is not something you can handle on your own. There is no shame in looking for support or help. There are plenty of free services available to people who are struggling financially, for example, there are nationwide government-funded charities with budgeting mentors who offer ongoing, confidential, & free budgeting mentoring sessions. They’ll often visit your home to do so, and many can visit outside of usual work hours.

A word of warning: be wary when friends, family, or even someone on social media might offer such assistance. Although these people may have the best intentions, they might not be experts in financial matters, and often will be in a worse situation than you! Even if they are well-organised financially, they still may be in a very different overall situation, and so you risk getting irrelevant tips.

8. Talk to Your Lenders

Debt can be both a financial and mental burden. Before you let debt and the stress it causes overwhelm you, talk to your lenders.

In our experience here at Become Wealth, lenders are usually open to discussing your issues and finding at least a short-term solution.

The lender may be willing to make a modification to the loan, such as extending its term or changing to interest only repayments for a set period, to help you get through a rough patch. You could also try refinancing to another lender altogether.

9. Earn More

You can only cut a budget so far, and you’ll want to be careful that your tight budget doesn’t become a source of additional stress.

One of the most commonly-overlooked areas is finding ways to increase your income. Some ways to do so include:

1. Work a few extra hours: Try talking to your employer about putting in some extra time each week to log some extra hours or overtime.
2. Earn a raise: Is there a way you can add more value to your employer without increasing your hours? Perhaps a promotion or payrise? In most cases, your employer wants to see you flourish – as this helps the company flourish, so if you’re unsure in this area simply ask your supervisor what it would take for you to be paid more.
3. Sell items you no longer need: This can include things such as old furniture, clothing, toys, pet items and tools.
4. Taking on a side gig: A side gig (sometimes called a side-hustle) can be a good option for those who want a flexible way to pad their income alongside a full-time job. This might include things like delivering food, dog-walking, tutoring, or launching a website. The extra funds can really add up.

The Bottom Line –Manage Your Financial Stress

Too often, we let money control us and let it dictate what we do, which can result in stress and worries. Instead, your money should be working for you.

Coping with financial stress and taking practical steps to correct any issues will help you get control of your money, and your life!

Most of the steps outlined above probably won’t be easy, regardless of where you might be financially. Some of your goals will take time and require plenty of effort to achieve.

Stay patient, celebrate the small wins, and look for the positives as your situation progresses. Then soon, you’ll be financially back on-track.