Over the last year, the U.S. economy has been faced with stubbornly high inflation, increased borrowing costs, and high price tags for everyday living. According to this 2023 Bankrate survey, 52% of Americans said money has negatively affected their mental health.
This is why it’s a healthy idea to assess your financial habits for managing money and your mental health this year. While economic circumstances are out of your control, there are ways you can reduce your financial stress and improve your mental health.
Money's Impact on Mental Health
In the same 2023 Bankrate survey, 60% of Gen Xers say financial worry negatively impacted their mental health, 55% of Millennials say it affected theirs, while 45% of Gen Zers and 45% of Baby Boomers also claim the same findings. If you have any financial responsibility – no matter how big or small – chances are, you’ve been burdened with financial induced stress. If you’re ready to make your mental health a priority, alleviating the anxieties surrounding money is a good place to start.
4 Tips for Reducing Your Financial Stress
At face value, money may seem like it’s just numbers – how much is coming in and going out. However, what many people don’t see is how money relates to our mental and emotional well-being. Negative mental health can manifest in many ways, resulting in feelings of anxiety, anxious thoughts, difficulty sleeping, and depression. This can lead to other serious health related issues affecting your physical health and quality of life. Here are four financial stress reducing tips for improving your mental health.
1: Make Small Changes Towards Big Results
Small changes can amount to big results when it comes to saving. For example, adjusting how much you spend on food costs can add up. While food prices are inflated, there are ways to help keep costs down at the grocery store. Set a budget, pre-plan your meals, and make a shopping list are ways you can manage food costs. Avoid the temptations of additional spending by only purchasing items that are on your list. You can reduce costs even further by substituting goods for less expensive alternatives and using coupons and store reward programs as well as shopping sales. Minimize your food costs even more by eliminating or reducing takeout. These methods can help you save money and reduce stress associated with your grocery budget.
Reduce financial stress with easy budgeting techniques!
2: Cut Back on Discretionary Spending and Prioritize Necessities
In times of economic uncertainty, prioritizing is imperative. Cutting back on discretionary spending and focusing only on necessities will help you boost your finances. Start by prioritizing health, basic needs, essential bills, and reducing excess spending as much as possible. To do this successfully, we recommend using a budget. Get started by downloading our “3 Practical Budget Templates That Actually Work!” which includes three different budgeting styles that you can choose from to best suit your needs. This will help organize and prioritize your essential spending and reduce discretionary expenses.
3: Create an Actionable Plan for Paying Down Debt
Having an achievable plan for paying down debt is key when it comes to eliminating financial worries and improving your mental health. Start by creating mini milestones for tackling debt such as shifting high interest credit cards to a low-rate option or consolidating multiple payments into one monthly payment. You can also incorporate debt elimination strategies like paying off the smallest of all your loans first (known as the snowball method), tackling high-interest obligations (known as the avalanche method), or applying extra payments to your newest debts (known as the landslide method). Determining which strategy will work best depends on your debt and specific financial situation, but taking that first step to eliminate the burden of financial obligations can lead to positive changes in your long-term financial and mental health.
4: Slowly Build Up an Emergency Savings
Strive to build and maintain an emergency fund to cover unexpected financial events. Things like the loss of a job or a health emergency can add additional financial worry and lead to stress and other negative mental health concerns.
You can build an emergency savings by putting $20 to $25 from your paycheck each pay period into a high-yield Money Market Account to build up your reserve over time. To make the process easier, set-up an automatic transfer to a designated savings account using direct deposit or payroll deduction. As you become more comfortable with your finances, you can gradually increase your contributions or even diversify your savings by opening a Term Share Certificate (or CD).
It's important to plan and prepare financially for life’s unexpected challenges. Having an emergency fund gives you peace of mind and relief should an unforeseen event occur.
When in Doubt, Ask for Help - Peach State is Here for You
When it comes to needing relief from financial stress, and improving your mental and overall well-being, you’re not alone. Asking for help and speaking with a trusted professional about your worries can be a huge lifeline when financial woes seem too big to tackle on your own.
At Peach State, we care about your financial well-being. That’s why we offer a variety of banking solutions from low-cost loans to high-yield savings options and everything in between so that our members can find relief from financial stressors. If you’re ready to alleviate those financial frustrations and improve your mental health, contact us today!
To learn more savvy techniques for budgeting during uncertain times, check out our “Budgeting in Uncertain Times – 10 Easy Ways to Save Money” blog.
