By: Amber King - Telcoe Federal Credit Union
Most people live their lives thinking that they will always be stressed because that how they constantly feel. When you consider your professional and personal lives, many consider them to be separate entities. However, when your stress stems from your finances, it can affect your job performance and overall mood. 42% of Americans report that their mental well-being is negatively impacted by financial concerns, resulting in stress, anxiety, worry, and feelings of insecurity.
It comes as no surprise that your financial situation can weigh heavily on your mind, especially when it doesn't appear to be in its best condition. Recognizing the link between your mental health and your financial stability is crucial for overcoming this challenge.
High levels of credit card debt often serve as a major source of anxiety, while student loan debt, averaging $37,105 in federal loans for the 42.9 million Americans affected, adds to the anxiety. Consequently, some individuals are postponing significant life milestones, such as home purchases and starting families, due to their inability to manage their debt obligations.
Follow along as we share a few key steps you can take to improve your financial and mental health:
Care for Yourself: Foster accountability by teaming up with an understanding and encouraging partner who can help you stay on track with your financial objectives. Discover ways to prioritize self-care, whether through leisurely strolls, meditation, or enjoying music. Additionally, don't forget to enhance your financial well-being with physical health, as both contribute to stress reduction. This can be achieved by maintaining a balanced diet, participating in regular physical activity, and engaging in mindfulness practices.
Budgeting & Planning: While it can be overwhelming, using a budgeting tracker and planning your finances out can help you monitor your spending habits and hold yourself accountable. This is a small step that can make a large impact on how you treat your finances.
Create an Emergency Fund & Automate Your Finances: Building an emergency savings account can help ensure you are financially ready for any unexpected expense. Putting away just $5 a pay period is $120 a year saved which can help you avoid stress. Juggling your financial responsibilities, including bills and savings, can often become a daunting task. To simplify this process, consider automation. Automating payments not only makes it more convenient to handle multiple financial obligations but also ensures your bills are paid promptly, while also nurturing your savings. Traditionally, the target for emergency savings is three to six months' worth of expenses. Nonetheless, this objective may feel unattainable for many. A more realistic and modern guideline is to aim for one month's worth of expenses tucked away as a savings goal.
Use Your Membership Benefits: Did you know that financial counseling is free with your Telcoe membership? Our partners at GreenPath Financial can help you build a budget, assess your spending habits, and create a debt reduction plan.
Cut Expenses: Cutting expenses is another way to avoid added stress. While it may not be easy, budgeting down to every dollar can help you avoid unnecessary expenses. For example, experiment by only buying the essentials for 1 week and allocate all of the money saved into an emergency fund.
Recognizing the profound connection between financial well-being and mental health can have a significant impact on your overall quality of life. Your financial wellness is a journey and finding what methods work best will reduce your overall stress. Don’t be afraid to adjust as needed as our financial picture changes often. We offer free financial counseling on subjects such as budgeting and saving. We also offer payroll deduction through your employer to create an emergency fund that is out of sight, out of mind. Having an account that is separate from your checking account can help you save more over time and create healthy financial habits.