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How to Relieve Financial Stress During Difficult Times

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Credit Sesame examines ways to relieve financial stress during difficult times.

Financial stress can be damaging to our mental and physical health. Persistent money worries can lead to chronic stress, which can cause depression. This can have a devastating, snowballing effect on our minds and bodies.

Ideally, you want to address issues before things get too bad. But it’s never too late to get help both through practical measures you can do yourself and through financial and mental health counseling.

Financial Stress is a HugeProblem in America

An October 2021 study published by the American Psychological Association (APA) found that “72% of Americans reported feeling stressed about money at least some time in the prior month.” When that survey was conducted, money worries largely stemmed from the COVID-19 pandemic and its disruption of the economy. In May 2022, inflation is is running at a 40-year high, something that can stretch family budgets to breaking point.

The study also indicated that consumers with variable-rate debt faced higher interest rates as the Federal Reserve looked set to hike rates aggressively. Meanwhile, economists polled by Reuters reckoned there was a 40% chance of a recession in either 2022 or ‘23. In this financial environment, there is plenty to be stressed about.

How Financial Stress Can Affect You Physically

It’s entirely sensible to be worried about these things. Financial stress, just like work stress, can be a motivator – driving you to address the issues you face. However, “chronic” (long-term) stress can seriously impact your health.

Linda Gallo is a professor of psychology at San Diego State University. And she told the APA:

“ … humans are actually equipped to deal with stress and stress can be beneficial, at least initially, because it allows us to avoid danger and face challenges. But, stress becomes unhealthy when it is unrelenting and people do not experience opportunities to recover. So, in these cases stress can lead to physical problems, things like headaches and stomach aches and also mental health issues, such as anxiety, trouble sleeping.”

Dr Gallo went on to describe how, when left to get worse, stress “can contribute to chronic physical conditions, such as heart disease, diabetes and other illnesses.”

Depression Can Cause Financial Problems to Snowball

Chronic stress often leads to depression. British mental health charity Mind describes how depression can spiral and make money problems worse:

  1. Feeling low and depressed can rob you of your drive and motivation to improve your situation. You may feel that things are so hopeless it’s not worth even trying to sort them out
  2. You may get some brief relief from your depression through spending, making your money problems worse
  3. Your demotivation can lead to lethargy, meaning you’re feeling too low to work or study normally. You might lose your job or be thrown off your course
  4. You might avoid thinking about money at all, ignoring letters, bills, statements and calls. That’s almost guaranteed to make your situation worse

How to Relieve Financial Stress

There are some practical, do-it-yourself steps you can try that might help you take back control of your money. This in itself often reduces anxiety. You can employ a tried and tested business strategy that managers use when facing a problem. They ask themselves:

  1. Where are we now?
  2. Where do we want to be?
  3. How can we get to where we want to be?

Answering these questions for your own financial situation, may help relieve financial stress.

Where are we now?

Get a clear picture of your current finances. That means opening all those unopened bills, checking statements and creating a spreadsheet or written schedule of all you owe and what you spend on regularly. Even though this is daunting, you may feel better knowing exactly where you stand. You have started the process of taking back control of your money.

Where do we want to be?

In the short to medium term, thats is. We aren’t talking retirement planning. W would love to be rich and debt-free but think smaller. Think not letting the situation get worse and how it be be improved. The aim is to be sufficiently in control of our money that you no longer feel sustained financial stress.

How do we get to where we want to be?

You’ve already done the hard part by knowing where your finances stand. You have set realistic goals. What next?

  1. Create a household budget listing all items that have to be paid. That lets you see where your money is going and where you might be able to make savings. It tells you how much, if anything, is available to pay down debts. Read 7 Steps I Used to Create a Realistic Budget, After a Few Failed Attempts. It is possible you can make enough savings in your budget by living frugally to pay down your debts.
  2. Consolidate your debts into one loan with a lower monthly payment. This may depend on your credit score.
  3. Call your creditors, explain your situation and ask how they can help. Many may be willing to cut your interest rate and give you more time to pay, so reducing monthly outgoings.
  4. Turn to a reputable credit counselor. The Department of Justice maintains “a list of approved credit counseling agencies by state and Judicial district.” And read Free Financial Counseling Services.
  5. Consider bankruptcy If your credit counselor suggests it, don’t recoil – talk it through. Bankruptcy may be a better solution than living with debts that are out of control and chronic financial stress that could undermine your physical and mental health.

Believe That it is Possible to Relieve Financial Stress

No matter how hopeless your situation, there are medical and financial professionals ready to help you recover and move forward with your life.

It’s common to feel guilt or shame over your situation. Don’t let those emotions put you off seeking help. Anyone can find themselves in your situation. The professionals to whom you turn won’t judge you. They are there to help.

If you feel your mental health is being undermined, read Healthline’s article, How Can I Get Help for Depression? And check out the federal government’s webpage, How To Get Mental Health Help.

No matter how bad your finances have gotten, there’s always a way to take back control.


Disclaimer: The article and information provided here is for informational purposes only and is not intended as a substitute for professional advice.

Peter Warden
Peter Warden has been writing for 14 years about personal finance, credit cards, mortgages and insurance. His work has appeared across a wide range of media, and he is an editor at The Mortgage Reports. He lives in a small town with his partner of 30 years.

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