Most Americans (90%) say financial matters have an effect on their stress level, according to a recent study. And with crippling inflation, high interest rates, job insecurity, and increased levels of debt, there are plenty of financial issues to stress about. In fact, 65% of individuals participating in the survey said their financial difficulties are piling up so much they can’t overcome them.
Like any form of chronic stress, financial stress, over time, can take a toll on your health. Getting on the right track financially isn’t just important for your bank account and your long-term money goals; it’s also crucial for improving and maintaining your health and prolonging your life.
How Does Financial Stress Affect Your Health?
Long-term stress, including financial stress, has been shown to create risks for numerous health challenges, according to the American Psychological Association (APA). It can lead to mental health challenges such as anxiety and depression, as well as irritability from feeling more sensitive to daily hassles, and negatively affecting general life outlook and goals.
In addition to affecting mental health, long-term financial stress can also negatively affect your physical health. Coping with long-term stress puts the body on high alert, according to the APA. Over time, it can cause inflammation and wearing down of the immune system, making you more susceptible to illness and infection. It can also increase the risk of many health problems including digestive issues, heart disease, weight gain, and stroke. Additionally, many people experiencing financial stress may engage in unhealthy coping mechanisms such as overeating, smoking, or excessive alcohol consumption, further exacerbating health problems.
What Can You Do to Minimize Financial Stress?
You can take steps to gradually strengthen your financial picture, which will help alleviate financial stress and protect your health at the same time. Start by following these steps.
Face financial issues head-on
A common response to stress is avoiding the stressor—but when the stressor is your finances, avoiding the issues will only make things worse over time. Rather than trying not to think about your debts, lack of savings, poor credit scores, or other financial issues, make a commitment to face them.
Sit down and make a list of all your debts, as well as your assets. Create a plan for paying off your debt systematically. That might include consolidating debts onto a new zero-interest credit card or debt consolidation loan, or simply planning to pay off each debt in order of size.
Create a budget and stick to it
Build a detailed budget that outlines your income, expenses, and financial goals. Identify areas where you can cut back on spending to pay off debts faster and contribute to savings.
Commit to purchasing only items that you can pay for in cash, rather than spending beyond your means. Reserve a portion of your budget for free spending, so you won’t feel completely trapped by your budget.
Having a clear financial roadmap can provide you with a sense of control and alleviate some of the stress associated with money troubles.
Automate financial tasks
Put technology to work for you by automating bill payments, contributions to savings, and other regular financial tasks—or at least set automated reminders. Automation can help you avoid late payments and resulting fees and stress, while keeping you on track to meet your financial goals.
Build an emergency fund
Work to establish an emergency fund to provide you with a safety net during times of financial crisis. Rather than relying on credit, you will have cash on hand to cover unexpected expenses.
A good goal is to save three to six months’ worth of living expenses in a dedicated savings account, but it’s ok to start small. If you can only save $20 a week, after one year, you’ll have more than $1,000 in your emergency fund.
Monitor your credit
Your credit scores and reports are vital tools for helping you meet big financial goals, such as purchasing a home or vehicle, or paying for college. It’s important to track your credit regularly so you can know where you stand in order to make progress toward your financial goals, and to protect yourself from potential identity theft.
ScoreSense makes it easy to track all three of your credit reports and scores and see the factors that are influencing your scores. Members can also contact our credit specialists who can answer credit questions. If you’re not a member, try a 7-day trial now.
