If you’re stressed about money, you are NOT alone. In fact, according to the American Psychological Association1, stress about money is one of the top stressors impacting Americans. And this important issue has impacts far beyond whether or not you can pay this month’s bills. Why?
It could be impacting your health! Studies2 show that people with too much stress were more likely to suffer from a variety of health issues, including ulcers and digestive problems, anxiety, depression, regular headaches, migraines, sleep problems, and more.
But the good news is that there’s a LOT that you can do to fix this. And I mean proven science-backed strategies, because no one should have to waste their time on ideas that don’t work.
So, without further ado, in this article you’ll not only learn how to fix the root cause of your stress about money, but you’ll also learn how to handle the stress in the meantime.
Tackle the root cause of being stressed about money
First, you need to do one simple thing that most people never get around to, but that can completely transform your finances forever. And this thing is priority number ONE. You can work on it while you implement all the financial stress reduction strategies coming up later in this article.
So what is this thing? You need to take control of your money once and for all, because the health of your finances and mental health are linked.3 Fix one, and it can help the other. And the way you do that is by…
… tracking it.
Some people call this budgeting… but in reality, it’s so much more than that if you do it right. It’s a master plan for your money to help you become the de-stressed, financially secure version of you.
Find out what’s going on
First, you track every dime of income and expenses so you can come up with an effective plan to optimize how you’re using the money you do have. There’s a reason why successful businesses track this stuff—it’s the number one best way to get their finances on track and reach their goals.
The trouble is that all the budgeting apps I’ve ever seen aren’t detailed enough, so you can never get a clear enough picture of exactly where all your money went. Sure, they’re fine when your finances are in great shape and all you need is a big picture overview.
But if your finances are in a situation where they’re stressing you out, you need a more powerful tool that’s truly customized to your specific situation AND provides you with a COMPLETE understanding of exactly what’s going wrong.
After you have that sorted out, you’ll see how much easier it is to create an effective plan to make your money finally start working for you, instead of leaving you in a state of stress. Your plan will ultimately require some combination of…
- increasing your earnings (for example, starting a side hustle like freelance writing) and/or…
- saving money (here are 28 ways to save money, adding up to over $16,000 in savings!)
The best tool to get you started
My recommendation to you is to go old-school and use a spreadsheet that you customize to track ALL of your income and spending so you don’t have to guess where your money went. And wait! Please don’t run just because I said “spreadsheet”!
Hate creating spreadsheets? No problem!
You don’t have to set it up yourself! I share the exact budgeting spreadsheet I’ve used for over 20 years (and my entire money management strategy) with readers of my bestselling book, How to Stop Living Paycheck to Paycheck. I call my spreadsheet The Money Tracker and it took me weeks to set up. It’ll help YOU get up and running FAST. Access info is in my book.
Pssst! Save $$$ and grab the Kindle edition because it’s dirt cheap—and even if you don’t own a Kindle, you can use the free Amazon Kindle app to read it on any of your devices or even in your internet browser. In fact, I like the Kindle app so much that I use it more than my actual Kindle! ?
Once you’ve got that set up, track your income and expenses for a minimum of 3 months. That’ll give you a good idea of where you’re at. Once you’ve collected that data, you’ll have all the information you need to understand exactly why your finances are the way they are and what needs to be done to fix it.
6 Elements of a financial plan to help you stop being stressed about money
- Pay your most important bills first: shelter, food, heat/cooling, etc.
- Cut discretionary spending until you have the cash flow to afford it again.
- Brainstorm ways to earn more money (ex. Can you work more hours? Get a second job? Start a side hustle? Ask for a raise?)
- Find out if your lenders can offer you a more sustainable debt repayment plan.
- Start building an emergency fund.
- Consider speaking to a financial professional.
Effective ways to reduce stress about money (that shouldn’t be overlooked!)
Dealing with the root cause is priority number one. But it won’t change things overnight. So in the meantime, you need tools to cope and manage the stress that accompanies financial uncertainties. Here are some things that can help!
What do psychology experts say can lower your stress about money?
Check out this short discussion with Dr. Linda Gallo, a psychologist who researches the relationship between stress and health. Skip ahead to timestamp 08:17 for the discussion about what we can do to reduce stress:
If you’re anything like me, your first reaction to some of those situations might be “but that won’t fix my money problems!”. But remember, this is about helping to strengthen your mind and build the resilience you need to get through these tough times. So give some of her ideas a shot! I bet you’ll be pleasantly surprised by the results!
Add some science-based woo woo to your life (yes, really!)
Another great way to de-stress is to add meditation to your life. I used to think meditation was cheesy, “woo woo” stuff. But then I found out that it literally changes your brain4 for the better! (For real… researchers have brain scans to prove it!). Here’s an oldie but a goodie: the TED talk (viewed over 1.7 million times!) that explains it!
So, many years ago I tried meditation for the first time, and to this day I view it as almost like magic for my brain. The reason I say that is because within a few weeks of doing it regularly, its impacts last all day long for me. And it feels like I have a brand new—much calmer—brain.
Give it a try and see what you think. Here are some free options from Insight Timer—bookmark it so you can refer back to it any time.
Being stressed about money can stop
Even if you feel really beaten down by the weight of your financial stresses, you can get out from under it. It’ll take time, consistent work, and strategic choices. But I bet you’ve dealt with tough things before and you got through it, right? So you’ll get through this too and come out the other side better than ever! Stay strong friend! You’ve got this! ?
Sources:
1. American Psychological Association, Stress in America 2023: A nation recovering from collective trauma, accessed April 13, 2023.
2. Mayo Clinic, Chronic stress puts your health at risk, accessed April 13, 2024.
3. Money and Mental Health Policy Institute, Money and Mental Health Facts, accessed April 13, 2024.
4. University of Washington (UW) Medicine, How Meditation Affects Your Brain and Boosts Well-Being, accessed April 13, 2024.
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