We all at one time or another have felt our financial life getting out of control. It may be as simple as only being able to pay the minimum on your credit card because the rent was due or the kids needed new school clothes and you didn’t have the cash.
No matter how big or small the crisis, our finances can cause us stress. Having a plan is the first step toward improving our economic circumstances and in turn alleviating the stress associated with it. While it is unrealistic to think we can eliminate stress altogether, there are ways to reduce the negative effects it can have on our health.
1. Recognize Your Situation– be honest with yourself, do you dread opening the mail or looking at the bank alerts telling you that your balance has fallen below zero? Are you constantly taking money from one bill to pay another, using credit cards for basics such as food and avoiding thinking about finances? Knowing exactly what you face can help reduce your stress level. Only when you know the situation, can you begin moving forward.
2.Make a Plan– take back control by gathering all your bills together and taking a serious look at the funds you have coming into the household. Use whatever method works best for you, paper and pen, excel spreadsheet or online budgeting program to create your spending plan. Remember you have to earn more than you spend so make a budget that matches your income. Concentrate on your priorities and begin building an emergency fund. Making a plan will give you peace of mind.
3. Communicate – Communicate with your creditors even if your spending plan has no room to make repayments. Why? Most creditors are willing to work with you if you talk to them. They may defer payments, reduce payments or let you skip a payment. These communications can help you reduce your stress, since you know you have alternatives.
4. Anchor yourself– Anxiety makes us envision the worst possible future. No one can make good financial decisions when they are under stress. This is a time to reach out for support systems, like family, friends or your faith based community. From lending a listening ear, to lending you money with a low interest rate, your support system can be a great help in times of financial difficulty. The help of your support system can reduce your stress and improve your chances of getting through the difficulties.
5. Be prepared now– Make it a point to get ready for problems before they arise. Create an emergency fund. Know which items you will cut from your budget if you need to reduce your expenses. Look for ways to increase your income. Learn to live with less. This is an opportunity to seek a new balance in your life and to reassess your goals in life.
Focus on things that add value to life. You have things in your life, that are more important than money, like being alive, having a measure of health, good friends and family. Use the free gift of laughter to ease your stress. Dealing with difficult times can help us remember what really counts in life.
Betty Ann Falkner, Education Program Manager of the Center presents financial education initiatives, including a curriculum of courses and resources to increase personal finance knowledge in order ‘to empower all individuals to achieve financial wellness through all stages of life’.