The term “financial stress” means something different to everyone. For some, financial problems involve having too much credit card debt or being unable to afford an annual vacation. For others, it’s the inability to pay rent or put food on the table for one’s family.
Whatever your circumstances, financial worries can wear you down physically and emotionally. More seriously, they can impact your behavior, affect your sleep, impede your ability to concentrate, and harm your job performance, relationships, and self-esteem.
Money is a significant cause of stress for most Americans:
One of the most important emotions in relation to financial stress is fear – fear of not having enough to get by, fear of being exposed, embarrassed, or humiliated. Guilt involves feeling bad about the spillover effect your financial problems have or might have on others. Shame about one’s financial situation manifests in avoidance of talking about or tackling the issues at hand.
The key to freeing yourself from a negative spiral of fear, guilt, and shame is to start building a sense of financial confidence that isn’t attached to your income or net worth but your ability to manage your resources well, make responsible decisions, and deal with inevitable setbacks with grace and resilience. The good news is that these skills can be developed and honed regardless of your current income or net worth.
Here are our top tips for managing the emotional impacts of financial stress:
It’s easy to avoid scrutinizing bills and bank statements and finding out bad news. But the truth is that reality is liberating. Set time aside to sit down with your bills and a calculator to gauge just how deep of a financial hole you’re in. Once you’re clear on the facts, you can create the steps to progress forward.
It’s helpful to spend time thinking about how you feel about money and why. For example, if your family didn’t have much money when you were growing up, it might affect the way you deal with money today. Here are a few questions to ask yourself:
With a bit of self-reflection, you’ll better understand your habits and patterns around money.
There are certain financial stressors like a recession or rising interest rates that are out of your control, but there are things that you can control to improve your overall financial situation. Begin with something small, such as shaving a few dollars off your food budget by packing your lunches and minimizing takeout. If you’re inclined to impulse buying, give your credit cards to someone you trust or put them somewhere difficult to access. If you’re tempted by advertising on social media, limit how much time you spend online.
Positive language is part of financial self-care. It’s important not to beat yourself up. When you’re trying to cut down on spending, focus on the positive. For example, instead of saying to yourself, “I can’t afford to buy my wife the Christmas gift I want to give her; I’m such a failure,” reframe it as, “This year, I’m going to surprise her with a homemade gift from the heart.” Changing the narrative and using positive language can help you stay calm and gain a sense of empowerment.
Just as overspending and receiving past due bills can cause feelings of shame or guilt, positive experiences like paying off a credit card can leave you feeling empowered and proud of yourself. Allow those emotions to manifest and make a point of congratulating yourself when you achieve a financial goal, regardless of how small. Doing so will motivate you to keep progressing toward your longer-term goals.
Healthy eating, sleeping, and regular exercise will contribute to your ability to remain calm, clear-headed, and more physically and emotionally equipped to find solutions to your financial problems. Identify activities that are fun and relaxing but don’t cost a lot of money, like going for walks in the woods or visiting the beach.
If, despite your best efforts, your emotional money worries persist for months on end, it might be time to reach out to a financial therapist who can provide support. Counselors specializing in financial therapy are trained to help people understand how finances affect their mental health and give them the skills to build better financial mindset habits for the future.
Apps like Payactiv provide an accessible way to talk about your financial goals with a certified coach, as well. By creating a free account, you can set up appointments with KOFE coaches to discuss your unique financial goals and strategies for saving, paying off debt, and increasing your credit score.
Whether or not we realize it, our emotions impact many of the decisions we make about money. Examining your upbringing, habits, and feelings in varying financial situations can shed light on which emotions drive your financial life. Eliminate feelings of shame, take control of what you can, make a point of celebrating your financial milestones and wins, and, if necessary, consider reaching out to a professional who can help you form good habits and associations with money.
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