Financial stress can be exhausting. From sleepless nights to anxiety-filled days, money worries have a profound impact on our well-being. However, you don’t have to let your financial situation control your emotional health. Here are five actionable ways to address and alleviate financial stress, guiding you towards a more relaxed and secure financial future.
Identify what’s causing stress
The first step is to pinpoint the cause. Financial stress doesn’t arise out of the blue; there are triggers and underlying reasons:
Debts: whether it's loans, credit card balances, or unpaid bills, owing money can be a significant source of stress.
Inconsistent income: irregular earnings, especially for freelancers or those with variable hours, can make budgeting a challenge.
Lack of savings: living paycheck to paycheck without any buffer can increase the fear of unforeseen financial challenges.
Future uncertainty: concerns about long-term financial goals, retirement, or job security can also be stress-inducing.
Action Plan: maintain a financial diary or journal. Over a week or month, mark down moments when you felt financially stressed and the triggers behind those feelings. This will give you clarity and a starting point.
Build an action plan for each stress source
For every financial concern, there's a tailored solution:
For debts: prioritise them. Clear high-interest debts first while maintaining minimum payments on others. Then, tackle one debt at a time.
For inconsistent income: if your income varies, create a baseline budget based on your lowest estimated monthly income. This ensures you always live within your means.
For lack of savings: start small. Commit a tiny portion of your income (even if it's just 1%) to savings, gradually increasing as you can.
For future uncertainty: educate yourself. The more you know about financial planning, the less intimidating the future becomes.
Action Plan: list your financial concerns. Then, allocate time every week to research and strategize ways to address each one.
Celebrate your achievements
Financial well-being isn’t just about numbers; it’s about emotional well-being too. Harvard University researches found that recognising and celebrating your achievements can be a significant morale boost and make sure you stick to your goals long-term.
Paid off a debt? Reward yourself (within reason).
Saved consistently for a few months? Maybe it's time for a small treat.
Action Plan: Set milestones, and when you reach them, allow yourself a moment of pride. It could be as simple as a night out, a movie, or any activity you love. Remember, it's the acknowledgement, not the cost, that matters.
Look for support
Addressing financial worries alone can be daunting. Luckily, there are organizations and associations dedicated to providing advice and support.
In Estonia, Eesti Võlanõustajate Liit (Estonian Debt Advisors Association) can be a valuable resource. They offer guidance, advice, and solutions to individuals in debt, ensuring they get the best assistance possible to regain control of their financial lives.
Action Plan: Don't hesitate to seek help. Whether it's from professionals, trusted friends, or local associations, a little guidance can go a long way.
Build emergency savings for the rainy days
An emergency fund acts as a financial cushion, ensuring unexpected expenses don’t throw you into turmoil.
Start small: you don’t need to save three months' worth of expenses right away. Begin with a target of one week or even just a few days.
Consistency over amount: even if it's a small sum, regular contributions can add up over time.
Action Plan: open a separate savings account specifically for emergencies. Set a small auto-transfer amount weekly or monthly, treating it as a non-negotiable expense.
Financial stress, though common, is not insurmountable. By identifying sources, creating action plans, celebrating achievements, seeking support, and preparing for the future, you can regain control and foster a sense of financial well-being. Remember, every step, no matter how small, is progress. With determination and the right strategies, financial serenity is within reach.
