Ways to reduce the impact of financial stress

Taking charge of your financial situation starts with understanding the relationship between financial stress and mental health, including the factors contributing to it and its effects on your well-being.

Look at practical strategies for addressing and coping with financial challenges so you can take charge of your money and feel better about your circumstances.

What creates financial stress?

Stress can impact your health, but stress related to your finances can be especially harmful. When money is tight, it can lead to poor mental health, which can lead to poor financial decisions.

There are many factors that can contribute to financial stress. Some of the most common include the following:

• Debt, especially if it is high-interest or unmanageable.
• Losing a job or not being able to find work.
• Struggling to make ends meet on a low income.
• Unexpected expenses, such as medical bills or car repairs.

Strategies for coping with financial stress

If you are experiencing financial stress, there are several strategies you can use to cope, which could also help resolve your feelings about your financial situation, and improve your mental health and financial situation.

• Identify where the stress is coming from

Is it one thing or many? Are you already in financial trouble, or are you afraid that you might get into it? Knowing what is bothering you can help you create a plan to address it so that it’s not just one big overwhelming situation.

For example, are you worried you won’t be able to pay your bills, or are you worried that you have high levels of debt? Do you not have enough money to cover your expenses, or do you worry that if your car breaks down, you won’t have an emergency fund to fix it?

How to tackle it: List the main stressors, rank them from biggest and most urgent so that you can prioritise them, and then focus on each problem consciously with a plan about how you can solve it or get rid of the fear.

• Understand your money story

How you feel about money is influenced by not only what your current financial situation is but also your emotional history with money as that determines how you behave with money and can deal with the stress.

What your beliefs and habits about money are and where you learned them have shaped your relationship with money. When you have an unhealthy money relationship, the ‘bad’ habits will always come back, no matter whether your financial circumstances change. You could be making a lot of money, but your money story is what’s keeping you stressed and in trouble.

How to tackle it: Look at what your emotions are around money and where they came from. Did you talk about money in your family, or was it a taboo subject? How did money make you feel growing up? Once you understand the root of the feelings, you can address them and start shifting your money mindset.

• Financial planning is your friend

Having a plan for your finances helps create preparedness, helping you be more resilient to financial stress. Having a plan gives you the emotional reassurance that you’ll be able to deal with life’s eventualities since you’ve laid the foundation of being prepared for them.

Being prepared makes it easier for ‘future you’ to make decisions and deal with life and removes some of the uncertainty, which contributes to financial and emotional stress.

How to tackle it: Financial planning includes having a budget, a plan for your income so that you don’t just live paycheque to paycheque, and a backup budget plan for emergencies.

• Prioritise what you can control

It’s likely that you won’t be able to change everything that’s causing you financial stress, at least not in the short-term, but there are things that you can do to improve your situation, and this will also give you a sense of control over your money.

Your financial situation won’t change on its own. You need to act, and even if it is a small change, if it’s consistent, it will have a lasting effect.

How to tackle it: Choose one thing that can impact your budget and change it. For example, brew your own coffee instead of buying it daily. Cut down on your food bill by meal planning so that you don’t buy more than what you need.

You can also look at negotiating with your creditors, getting better premiums on insurance or consolidating your debt.

• Reach out

You don’t have to do it on your own. Sometimes getting an outsider’s perspective can help you identify ways of improving, but it can also give you reassurance that you’re not as bad off as you think you are.

It’s important to still look after yourself in this situation, and there are plenty of financial and psychological resources available; you just need to take the first step.

How to tackle it: Talk to trusted friends, family or a therapist to help you unpack and manage your emotions and help you develop coping skills. Consider getting help from professionals to deal with your finances and help you make better decisions so that you can reduce the amount of financial pressure you’re under and, therefore, reduce the stress.

_{Disclaimer: This article is solely intended for information. It does not constitute financial, tax or investment advice or recommendation. Please speak to a financial advisor or registered financial professional before making any financial decision(s).}

_{Standard Bank, its subsidiaries or holding company, or any subsidiary of the holding company and all of its subsidiaries make no warranties or representations (implied or otherwise) as to the accuracy, completeness or fitness for purpose of the information provided in this article or that it is free from errors or omissions.}