Financial stress is not a figment of your imagination. It is a real and serious threat that can ripple out and affect a lot more areas in your life. The problem is that a lot of people believe that their financial situation is simply the norm today. This is especially dangerous when they are in debt and can’t seem to find a way out.
There are a number of reasons why you need to seriously take a look at consumer debt statistics and one of them is stress. There are a number of reports that even credit card debt is nearing pre-recession levels during 2008. This can mean that more people are starting to feel more confident in taking out debt or the same process of over-borrowing is happening all over again.
Financial stress is affecting even the millennials
In an economic standpoint, a lot are riding on the shoulders of the millennials. If you consider how our economy’s strength and growth is largely pegged with the consumer’s ability to buy. This is because the millennials are slowly taking over the workforce in various industries. As such, they would soon be the group with the most purchasing power. This would make them a big driver of the economy.
However, studies show that they are suffering from stress that is mostly financially related. From a study cited by the NY Post, they mentioned that over 70% of millennials are waking up at night because of stress. And this is not a one-off case as it happens, on average about 3 times in a given week for them.
Money stress could lead to depression
According to American Psychiatric Association, depression is the feeling of sadness which can lead to a decrease in a person’s willingness to function. This is one the mental health issues that sadly has a stigma over it dictated by society in general. This forces people to simply take it in and try to sort it out on their own.
So how does this connect to financial stress? As more and more people, especially millennials spend their time stressed out, they are putting their physical, emotional, as well as mental faculties exposed. For one, the lack of sleep as they wake up stressed out in the middle of the night can lead to a decrease in productivity in the morning, They are tired, irritated, and unable to function properly. This now becomes a vicious cycle that they have to manage.
So how do millennials face financial stress head on? Well here are a few of the things you do to manage your finances and come out on top.
Do not rush things
It is not uncommon for you to feel rushed and in a hurry to change and get out of your current financial situation. You could be dealing with multiple debt payments, unmanageable amounts, and even interests and fees on your monthly statements. It is just practical to try and change your situation as fast as possible.
However, you need to factor in your stress level and how it has affected other areas in your life. You might be too tired to think straight or too emotional when making decisions. These are not great circumstances when you are about to make life-changing decisions. You need to be at the top of your game before dealing with big decisions. As such, it is best to play it safe and commit to small yet informed decisions. These can help you get your footing and eventually lead to bigger financial decisions.
Avoid quick fixes when dealing with financial stress
One of the dangers, when you are dealing with financial problems, is that you are more prone to make mistakes. That is because, in your desire to get out of your situation real fast, you tend to become gullible. When someone who seems legitimate enough throws you a lifeline, you grab it falling in hook, line, and sinker.
A scam artist can detect when you are at your most vulnerable and they will always take advantage. Remember that when something seems too good to be true, chances are they are! Be wary of the people who will tell you that they can make your financial problems disappear in an instant. You might end up in a bigger mess down the line.
Look to automate your finances
It is important to take action and be proactive with your finances. That being said, you can try to automate your finances. Doing so can help you be in control – automatically that is. As you try and slowly make changes to help you deal with your finances, automations helps you attend to your payments on time every time. It can also help you save up for those important funds in your life.
Automating your finances will help you protect your money as well. This is because even before you make unnecessary expenses, they are already out of your main account. Before you get to use your money for shopping, you already paid for your bills. Before you spend on things you never thought you needed online, you already saved the money for your retirement fund.
Consolidate your debts
A big part of the financial stress has to do with trying to manage multiple payments every month. One perfect example of this would be your credit card debt. You might be dealing with payments from multiple card lenders. It might come to a point where you can no longer monitor the countless payments you have to make every month.
This is where debt consolidation comes in. This is one of the most popular debt repayment plans consumers have been using. Apart from an easier time monitoring a single payment, there is a big chance that the monthly payment can come out smaller. This is because of low to 0% fees for other cards or even lenders giving lower rates. This can be because of a collateral on the new loan or better credit score. The bottomline is that you get to save money and have an easier time in repayment.
Save up for your reserve funds
A big part of stress is worrying about the future and the uncertainties it brings. You might already be worrying about what would happen if you lose your job one day or even get sick and need some life-saving operation. It might be as simple as your car breaking down or having water in the basement. Thinking about these and other circumstances can really add stress.
One of the best ways to address this is saving up for your reserve funds. In the simplest sense, this is meant to help you address unexpected financial emergencies. From losing your job to replacing a light bulb – this fund will be your cushion. You get to sleep better at night knowing that you have money to pull out in case anything happens.
Financial stress is prevalent not only with millennials but with most of the American consumers which can lead to serious problems like depression. The steps mentioned above are not quick fixes. However, they will help you gain more control over your finances. In doing so, you gain more confidence and ability to manage your stress over your finances.