Feeling stressed about money isn’t anything new, but the recent economic difficulties have presented more financial struggles than we’re used to. Millions of Americans are experiencing heightened financial stress as we continue to navigate the uncertainties that have come with the coronavirus pandemic.
Financial stress can take a large toll on both our mental and physical health, impacting our overall quality of life. Here are six financial stress triggers that you may be experiencing and our tips on how to overcome them.
Making Too Many Financial Decisions at Once
Everyday we face personal financial decisions. Whether the question is as simple as should we go out to dinner, to as important as how much should we spend on a home, every decision we make has an impact on our financial well-being.
Being confronted with so many decisions can feel overwhelming, but there’s things we can do to help alleviate some of the stress. Where you can, try writing down and organizing what needs to be done and how quickly. Decide what can wait (maybe a home renovation project) versus what can’t (such as car repairs or maintenance). Figuring out where you can minimize decision making and space out your financial obligations can help ease the stress of dealing with everything at once.
Keep in mind that one of the most harmful things you can do for your finances is not making any decision at all. You can check out our blog “No Decision Is Still a Decision” to understand how indecisiveness can threaten your financial security.
Losing Track of Your Spending
One of the most important aspects of personal finance is knowing where your money is going. It’s easy to lose track of your spending, especially when using credit cards or contactless pay. Even if you have a great handle on your monthly bills, it’s the small daily expenses that can really take a toll on your wallet without you realizing it.Keeping track of your spending in the first place can really help reduce the stress and anxiety you feel when it comes time to check your account.
Credit Card Debt
Having too much credit card debt goes hand-in-hand with letting your spending go unchecked. While it’s nice to build good credit, and many credit cards offer reward points based on how much you use it, you still need to track your spending.
Credit card debt can rack up quickly. If you can’t pay off your credit card, interest will grow - and quickly. Credit card companies make millions off the interest of unpaid balances, meaning paying at least the minimum payment each month should be a top priority of yours. Credit card debt can creep up quickly, and nipping it in the bud is much easier than trying to tackle it later down the line.
Paying for your Children’s Tuition
College tuition is always on the rise. In fact, the cost of college has increased by more than 25 percent in the last 10 years.2 This is a huge financial stress on many families, especially those with multiple children. While it may be a goal of yours to pay for your child’s education, it just isn’t always possible.
Many students have to take out student loans and apply for financial aid, which adds to the mounting student debt around the country. More than 40 million people collectively have over $1.5 trillion in student loan debt.3 To help reduce the amount of debt your child may have to take on in the future, you can start working now to help save. Options like a 529 plan are designed specifically for funding future education. Work with your financial advisor to determine how else you may be able to prepare.
Paying for Healthcare Expenses
You never know when a sudden medical emergency will arise, and when one does, it can be a major financial stressor for many families. Aside from the general doctor visits and prescriptions, an unexpected hospital visit can really set a family back, and it can take months or even years to pay back these expenses.
If you have health insurance, take the time to reevaluate your coverage. Run through potential “what if” scenarios to determine how much you could be left paying out of pocket for you and your dependents. If you know you’ll be responsible for paying a significant amount in the event of a medical emergency, focus on padding your emergency fund. Add to it regularly and determine if you’re in a position to be contributing even more.
Costs of Raising a Child
In a recent survey, 53 percent of those with dependent children say they are financially stressed.4 Beyond funding their education, other costs include:
- Diapers and formula for infants
- Childcare for younger children
- Doctor visits
- Family vacations
As any parent knows, the list goes on and on. You want nothing but the best for your children, and for many families, this may mean spending more than you have to support them and provide for them in the best way that you can.
To help alleviate some of the stress, revisit your family budget - or make one if you haven’t yet. Laying out all upcoming expenses on paper can help make them feel more manageable, and it can give you a sense of how much you should expect to spend. Budgeting puts you back in control of your family’s finances, especially when it comes to caring for your kids.
Getting your finances in order is not an easy feat. Start by identifying your own financial stressors and determining how you can start to address them. Doing so can help you and your family in the long run by providing a stronger financial future and peace of mind.
This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.