7 Ways To Relieve Financial Stress

In the American Psychological Association’s annual study on stress, the financial variety has topped the list of stressors every year since the launch of the study in 2007.

We continue to see financial stress increasing year over year.

If you’re feeling the effects of financial stress, then consider our list of short- and long-term actions you can take to attempt to relieve the pressure on both your finances and your mind.

1. Talk About It

Regardless of the type of stress, verbalizing your feelings about the situation is the first step towards relieving anxiety. The American Psychological Association recommends sharing, but with an important caveat:  make sure the person in whom you confide is trustworthy and likely to understand and validate your feelings. Choose your confidant wisely so you can get things off your chest in a supportive environment.

2. Read Some Success Stories

One of the best ways to overcome stress is to gain hope and inspiration through others who’ve triumphed over the same issues you’re facing. You may be surprised at how many people you can find on- and offline that have walked your same walk and come out on top.

3. Track Your Expenses

Taking stock of your spending is an important and revealing step towards regaining some financial traction. Maybe you lost track of your credit card balances and they’ve gotten out of hand, or a steady stream of small expenses is draining your cash.

Tracking exactly where your money goes gives you a financial picture you can work with, and just the act of owning your financial decisions can help take the edge off of stress.

4. Find Ways to Save That Work for You

Having clarity on your true cost of living puts you in a great position to start shaving expenses. Now, this is where most finance articles suggest that you give up your daily lattes, but it’s better to tailor your cost-saving strategies to what’s likely to work for you.

Can you get a better phone rate by switching carriers? Cut internet costs by bundling services? How about reducing insurance premiums by consolidating your policies with a single provider, or signing up for loyalty cards that lower prices on gas, groceries, and entertainment?

Look closely for areas where you might be overspending, and challenge yourself to find the most savings you can -- you’ll feel noticeably better making progress you can measure.

5. Start Contributing to an Emergency Fund

It may seem counterproductive to divert money into savings when you’re already feeling financially stressed, but knowing you have the cash for an emergency will be an enormous relief.

A 2012 study by the FINRA Investor Education Foundation found that 46% of U.S. households did not have an emergency fund in place, while 26% of respondents had unpaid medical bills and 22% overdrew their checking account.

Creating an emergency fund of 3-to-6 months of expenses is one of the first steps any financial advisor recommends, but even if you can only make small deposits to start, you’ll rest easier knowing you’re taking steps in the right direction.  

6. Create a Spending Plan

When you’ve reduced your costs as much as you can and started an emergency fund, you’ll be in prime position to create a personalized spending plan. The key is to track your income and make a plan for every single dollar you earn. Don’t approach it like you’re creating a restrictive budget that’s going to doom you to living a miserly existence.

You’re prioritizing your spending after allocating funds to cover your expenses and contribute to savings. Buy your lattes if you want to. Once you’ve made your decisions, you can relax and follow your plan, relying on your expense tracking to keep you on target.

7. Automate Good Behavior

If financial misbehavior got you into distress in the first place, automating smart financial decisions may be a helpful road to relief. You can automate bill payments so you don’t miss a deadline, and grow your emergency fund by setting up direct deposits. Scheduling good financial behavior in advance not only frees you from repetitive tasks, it may also help to diminish your stress.