12 Ways To Reduce Financial Anxiety When Stressed About Money

An average citizen lives paycheck to paycheck, trying to make ends meet, so financial anxiety is common in today’s working class. But it has been challenging since COVID hit the world. People lost their jobs and their incomes; businesses went down as well. As a result, every country’s economy suffered losses, and we are still recovering.
These situations caused many people to empty their entire life savings or even get caught in webs of debt. Money is indispensable in day-to-day life; from getting groceries to pieces of jewellery, visiting a nearby escape room, or travelling abroad, it plays a massive role in every aspect of life. No wonder people are anxious about their finances and about maintaining financial stability more frequently than healthy ones. Here are 12 effective ways you can soothe your financial anxiety:

• Relationship With Money

A bad relationship with money is when people feel like they aren’t controlling their money. They would feel helpless and powerless about stabilizing or improving their finances. Money isn’t complicated and highly impossible to understand. You can develop a positive attitude towards money by knowing your finances well. You’re entirely in charge of your finances if you can earn, budget, and save money. And this will bring you one step close to feeling secure and stabilized. Improving your relationship with money is essential to remove its stressful impact on your life.

• Financial Literacy

To ace any paper, we’ll need to learn it first. Everyone has to handle money from an early age. Financial literacy involves significant components such as earning, budgeting, spending, saving, and protecting. It further includes every aspect of finance: banking, loans, taxes, interests, credit cards, etc.
These skills are vital to take the right action and decisions regarding money. By learning the basics, you can tackle the helplessness that comes with money. So it’s necessary to learn about managing your finances before you start earning. You can start this learning process now, as it’s never too late to educate yourself.

• Gratefulness 

Practising gratitude with money could help you earn more and reduce financial stress. You must thank yourself for working hard to earn and be grateful for everything you gain through cash, like your favourite foods, pretty clothes, a house, etc. Even the basics of necessities are accessible due to money. Moreover, cash gives you more freedom around work and allows to elevate your lifestyle. Being grateful makes people feel less materialistic, and ironically this attitude towards money can bring abundance. Showing gratitude by helping others and appreciating your efforts will help put away the money worries.

• Clearing Debts

Debt is a significant cause of financial anxiety. It’s a nightmare that keeps you up. As debt piles up, the person feels more and more helpless. So it’s important to tackle debts before it gets overwhelming. List out your debts from smallest to largest. Start by paying off your smallest debt, then move on to more significant payments. Budgeting and monthly savings must be done accordingly, leaving a separate portion for paying off debt. The budget could be tight until all the debts and loans are paid off.

• More Sources Of Income

Having at least two or even multiple sources of income can be extremely helpful. Relying on a single job can be stressful if you try to pay bills, tackle debts, and save up. However, it can lessen the worry of losing a job and give you more freedom with your budget. In addition, a side hustle aids with financial security. Many do their part-time or second jobs online after their primary job. It makes it easier than commuting to two positions.

• Budgeting

Budgeting aims to ensure that the expenses aren’t higher than the income. First, calculate your payment and all of your spending. A general rule of budgeting is the 50-30-20 method. First, 50% of your income has to be allocated to your necessities such as food, rent, and other bills. Then, you can spend 30% on your wants like entertainment and shopping. The remaining 20% has to be saved or invested.
This method can vary from person to person, but the key is to prioritize your needs and also make sure to save some of your income every month. Budgeting is an easy way to relieve some financial stress as it helps you stay aware of your income and expenses.

• Expenditure Tracking

To make an accurate budget, you should know your expenses well. You have to track from the smallest to the most significant expenditure of the month. Some are fixed payments like rent, while others, like electricity bills, can vary. Tracking your expenses not only helps with budgeting but also in eliminating wasteful spending habits. Several expense tracker apps are out there, and you can also write them down in your planner.

• Spending Patterns 

Impulsive buying is one of the issues people can face while on a budget. It’s like binge eating when you’re on a diet. But analyzing your patterns will help in decreasing such unplanned expenses. Many people tend to spend too much, especially when stressed and emotional. But before buying something, you must ask yourself whether you really need that purchase. Contemplating well before spending your hard-earned money can help you stick to your budget.

• Emergency Fund

Life is unexpected, and many events can come tumbling at us unprepared. This uncertainty can bring a sense of powerlessness. Stressing about it will only cause anxiety. This is where an emergency fund will be helpful. Someone could become ill, and someone could lose their job; there are many such variables that we can’t foresee. So saving up the number of your three to eight months’ expenses as an emergency fund is important. This can sustain you while looking for a new job or dealing with financial distress. Other than in cases of emergency, this fund should be left untouched.

• Little Changes

Small decisions contribute big to your life. Following all these methods and changing your finances might be difficult at first. But it’ll forever benefit you once you get the hang of it. You can start with budgeting and then pay off debts; you can save lots of money once paid. Small decisions can significantly impact you; simply saying no to an unnecessary purchase can benefit your monthly budget. Saving up a little portion of your monthly income can sum up a considerable amount.

• Stress Management 

It’s important to take care of your mental health as much as you take care of your finances. Stress can affect you mentally and cause physical distress like blood pressure, weak immune system, weight gain, weight loss, etc. Other problems such as insomnia, hair fall, and skin troubles may also arise. Health is your most considerable wealth, so recover from excess stress.
With a sound financial plan, you can relax daily without worrying about money. Meditation, exercise, walking, and connecting with people and nature are proven ways to relieve stress. You can also write down your thoughts and worries in a journal.

• Professional Help

Although these methods could bring financial stability, you could still be anxious. So it’s essential to recognize that sometimes you need to reach out for professional help. Of course, talking to family and friends about your finances can be helpful. But you can also seek the guidance of experienced financial advisors. They can show you the best ways to optimize your budget and savings to fit your goals.

It’s a slow process to recover from financial anxiety and move towards feeling secure. When you find yourself stressing about finances, dig deeper into your mind and ask what’s bothering you. Find the root cause of your anxiety and analyze the primary ways you can tackle it. There’s always hope, be it a tiny or terrible problem. Other than these, you have to physically and mentally take care of your health to see improvements in anxiety.