The economic impact of the COVID-19 pandemic has taken a huge toll on everyone’s finances. Entrepreneurs rely on small-business loans to stay afloat, while others depend on their emergency funds to support their daily expenses.
Whatever situation you’re in, the pandemic has caused serious financial stress, particularly those with existing money problems. The situation is even worse for people suffering from money anxiety, which has affected their health and social relationships. To better understand money anxiety, we’ll take a look at ways to overcome it, especially during these tough times.
Control your expenses
The first step to overcoming money anxiety is knowing the root of the problem. Identify factors affecting your financial issues. Are your debts piling up? Do you have enough income? Are you experiencing a lack of job security? Once you’ve identified the source of your anxiety, you can now create a financial plan.
Start by setting a budget. Create a list of your monthly expenses and record the average cost. This shows where your money goes each month. Financial experts stay 50% of your salary should proceed to obligatory expenses, such as bills, rent, and insurance. The remaining 20% should go to savings while 30% on other miscellaneous expenses, such as leisure activities.
If your debt is the source of your money anxiety, create a plan to pay the penalties and late fees. If your monthly budget is too small to cover the payments, consult a lender to consider suitable options, such as debt consolidation.
Manage your financial stress
Considering the current economic climate, it’s almost impossible to get rid of your financial issues overnight. But this doesn’t mean you can’t address the anxiety your financial state is causing you. You have to find the right stress management technique to deal with long-term financial challenges.
Try sticking to a healthy routine that includes physical activity, complete sleep, and regular meals. Focus on maintaining a balanced diet and avoid too much stress eating and alcohol. When people have money problems, they drink alcohol, thinking that it will make them forget about their problems. This temporary fix will only worsen your situation, especially your health, in the long run.
Another way is to try meditative techniques, such as yoga, deep breathing exercises, and other relaxation techniques to ease stress and regain balance in your life. You should also find ways to boost your self-esteem since money problems can worsen feelings of failure and ruin self-worth. Increase your confidence by learning a new skill, investing in career growth, and spending more time with your loved ones.
Schedule time to check your finances
When you feel very anxious and stressed, your body goes into fight-or-flight mode, thinking danger can happen anytime. It drives your brain’s cognitive function to go offline, which is supposed to help you predict consequences and analyze options.
When faced with financial stress, people respond by either becoming obsessive over their account or avoiding it altogether. Experts say you need to set aside time to check your money so you can deal with it in a safer and more focused state of mind. For example, check your money during the evening once you’re done for the day instead of waiting for high-risk situations where you have to make quick decisions or something is affecting your financial stability.
If you’re checking your money only when anxious, it gives an impression that “money is risky and something to be afraid of.” In other words, your experiences with money become negative, which further induces your anxiety. By scheduling “money time”, you become more confident in making better financial decisions.
When checking in your money, do these three things: review your cash flow, predict upcoming expenses, and adjust your budget if needed. Research says that working on your financial literacy reduces money anxiety. Once you’re familiar with how your money flows, you’ll no longer be anxious or surprised every time you check in.
Redefine your relationship with money
Another way to overcome financial anxiety is to establish a healthy relationship with money and understand that money isn’t a problem you need to solve.
Most of us learn about money from our culture and social circle, including our parents. The thing is, we grew up thinking our parents are good at handling money because they have a stable job, practices, and processes, such as savings. As you reach adulthood, you find that your financial values and situation don’t match your parent’s framework. This discovery can lead to isolation, avoidance, and shame.
Redefine your financial relationship by looking at your own financial practices and behaviors to know more about yourself. Don’t let money be a threat to your identity and self-esteem. Create a financial plan based on your lifestyle and expenses instead of comparing your financial status to other people.
Overcoming financial anxiety takes a lot of time and patience. You have to understand that you’re not alone in this endeavor, and there’s always a way out of it. Don’t let the fear and stress get into you; focus on how you can alleviate those feelings and take control of your finances.