Whether you are budgeting, earning, spending, or investing, managing money is a part of everyday life. And for some, the stress that comes with managing money often affects mental health.The cycle can be vicious - poor mental health makes managing your finances harder and worrying about managing your finances makes your mental health worse. But before spiraling with worry, check out our five tips for managing and alleviating money-related stress.
Create a Budget
To start, create a budget that works for you. Using the 50/30/20 rule will help identify expenses, savings needs, and debt payoff.
First, calculate your total monthly gross income. Take 50% of the total to allocate to essential needs like rent, insurance, car payment, groceries, minimum loan payments, utilities, gas, etc.
Next, take 30% for wants and desires. While this category is subjective, you can consider these things as non-essential items, such as eating out, vacation, beauty services, new technology, and more.
Finally, save the remaining 20% for your savings accounts and debt payoff. Use these funds to pay down credit cards beyond the minimum, pay off student loans, and contribute to your emergency fund.
The 50/30/20 rule is a great place to start so you can better understand where your hard-earned dollars are going on a monthly basis. Once you do this, you will have a better handle on your finances, which can help reduce stress.
Identify Anxieties and Stress Triggers
Many people experience increased anxiety when opening bills, logging into their bank account online or paying debts. If your mental health is compromised due to finances, first identify what part of your financial situation makes you stressed. Then, seek help.
Many financial institutions include an online web chat feature with live representatives that can help you make payments, locate statements and answer questions. This can help increase confidence when logging in.
If you are still uncomfortable, you can ask a trusted loved one to sit with you for emotional support while you pay bills, review your budget, or help come up with a plan for a better financial future. Sometimes, all it takes is emotional support to get you through the difficult task.
If you build a budget and still find yourself struggling, try downloading a tracking app like Intuit Mint. You can also read debt and budgeting-related articles from the Federal Trade Commission, or use a debt repayment calculator to set realistic goals for yourself.
Asking for help should not be viewed as a bad thing - especially when relieving your financial stress will help improve your mental health. If you don’t want to apply for resources but would like to talk to a professional about your situation, visit the National Institute of Mental Health for a list of mental health resources. You can also contact your financial institution for assistance - some have additional payment plans to help people through financial hardships, or free financial counselors you can talk to.
Sometimes, all it takes to improve your financial stress is a little creativity. Think of adjustments you can make in your life, such as:
- Reduce subscriptions like Spotify, Netflix, Hulu, or any other prepaid service you pay for monthly.
- Get a roommate who will split the cost of rent, utilities, and other monthly expenditures.
- Carpool to and from work to decrease gas expenses.
- Buy items like toilet paper, rice, beans, etc. in bulk. Purchasing bulk items often reduces the cost per ounce for many products.
- Become an Uber, Lyft or delivery driver to earn extra income. Use the extra income to pay down debts or add to your savings account - this is money you didn’t have before and should not be seen as fun, non-essential spending money.
- Unsubscribe from email lists that encourage spending.
All of these adjustments combined can improve mental health by removing the stress that comes with spending - and sometimes all it takes is one or two solutions for long-term security and reduced stress.
Enroll in Your 401(k)
Participating in your company's 401(k) plan can also reduce financial stress because it allows you to put money aside for the future. Make sure you maximize your company’s match policy too. While it may be a small percentage of your salary each pay period, those dollars compound over time and can make a big difference when you’re ready to retire. If you’re at the beginning of your retirement savings journey, our glossary will help you familiarize yourself with need-to-know terms.
These benefits combined help maximize your savings over time with little effort and stress.
Money and mental health can go hand-in-hand, and the best way to approach both is often head-on. Whether you need to revise (or create) a budget, utilize resources, or simply ask for help, there are numerous resources available to assist you with financial stress - and remember, Slavic401k will be here to provide personal, professional retirement savings services and support your goals for a sound financial future.