Why is financial anxiety on your mind?
Numerous surveys have found that Americans feel more anxious than ever before, and financial decisions and pressure are significant drivers of this. Despite a strong economy and low unemployment, more Americans cite money as the biggest source of stress in their life.
According to a recent study by the American Psychiatric Association, 67 percent – 2 in 3 Americans – say they are somewhat or even extremely anxious over the state of their finances. Given these numbers, I felt it was important to highlight this issue. I also wanted to discuss some practices and tips that can help our listeners address some of the financial anxiety in their lives.
What are the biggest financial stress points for Americans?
A wellness survey by Stanford University and Fidelity Investments of more than 9,000 people around the country found 42 percent fell into the “unwell” category with their finances. While any kind of money trouble can unsettle us, there are three key sources of financial pressure that keep many Americans up at night: medical bills, retirement savings and student loans.
In the same Stanford survey, one in eight people reported experiencing stress over unpaid medical bills. Those with medical debt are more likely to lose time at work, averaging three more sick/personal days a year than their colleagues.
With regard to retirement, the results are even more troubling. The 2018 retirement confidence survey found that nearly 2 in 3 Americans say that preparing for retirement makes them feel stressed. Finally, a survey from Gallup showed that most holders of student loans have reported feeling stress about these loans, and this stress has caused decreases in health and wellbeing among borrowers.
Finally, in addition to these year-round stressors, the holiday season can also cause additional stress as people feel guilty about their money situation or overextend themselves financially.
If we are dealing with anxiety about our finances, what should we keep in mind?
The American Psychiatric Association outlines a few things to keep in mind if you are going through tough economic straits. The first tip is to make one financial decision at a time. When confronted with tasks that seem too daunting, people rapidly lose the motivation to take action.
But if you take things one step at a time, you can avoid feeling overwhelmed. Second, track your purchases. Research shows that tracking can be an effective tool. Keep a daily list of how you spend to really understand where your money is going
The next step is to identify what triggers your financial anxiety. Take stock of your financial situation and where money causes you stress, consider ways you could allocate your money better, then commit to a plan and refer to it often. Although this can cause some anxiety in the short-term, writing a plan and sticking to it can reduce stress over time.
You also want to pay attention to how you deal with stress related to money. When experiencing financial stress, people can turn to unhealthy activities such as drinking or gambling, or they become more aggressive or confrontational. Be aware of your responses — if they are causing you trouble, consider seeking help before the problem gets worse. Finally, don’t be afraid to ask for support. Research shows that having a support system can help you reach your goals.
The holiday shopping season can also make some of us feel guilty or pressured. Any advice on this front?
The APA also has some reminders on this front. First, remember the most important things about the holidays: family, community, gratitude. We can often get lost in the commercialism and forget these things. When your holiday expense list outstrips your monthly budget, scale back. Remind yourself that family, friends and relationships matter more than material objects.
Also, simply avoiding temptation can be helpful. While you probably cannot avoid the stores, the decorations, and the Christmas muzak altogether, limiting your time there can help you manage spending. Lastly, only carrying the amount of cash you can afford to spend can help you stay on track.
Any other tips to keep us on the right track?
The most important thing to remember that even the greatest projects begin with the first step, and financial stability is no different. If you can start an emergency fund and contribute $10 a week, that is progress. The same is true of retirement savings. Every dollar counts. Nothing happens overnight, and it will require dedication, by simply making small contributions over time you can put yourself on track for a brighter financial future.
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