Living with financial stress is an unfortunate reality for most of us. Based on recent statistics, a majority of the workforce is feeling a significant amount of financial stress.

What is financial stress? Financial stress, or financial anxiety, differs from everyday money worries. This is because it’s constant and, in some cases, debilitating. Financial stress affects everyone differently, but there are some common signs to look out for; sleeping difficulties, mental health problems, physical health issues, relationship difficulties, and unhealthy coping methods.

Poor finances lead to stress and anxiety that further impacted my finances. So, how did I overcome this? Here’s a step-by-step guide on what I did to reduce financial stress.

1. Focus on yourself.

Before I targeted my bank balance, I focused on myself. It’s impossible to get your finances in order when you’re not in the right head space. As it can seem like your financial health is causing your anxiety, this may feel counter-intuitive at first. However, I gradually eased myself into a more relaxed state and was able to assess my situation, make better-informed decisions, and be able to see my next steps with clarity. So, to nourish your mind, body, and soul so they can combat financial anxiety, try to get enough sleep, keep a healthy diet, and get active.

2. Stay in touch and open up.

To reduce anxiety, it’s important to stay in touch with your loved ones. Whether it’s a WhatsApp call with close family, a quick catch-up with your bestie, or a one-sided conversation with your dog, like I did, it’s important to stay connected.

Though it may seem daunting, try to talk a little about the problems you’re facing and how you’re feeling. Your conversation partner isn’t going to give you all the solutions you’re looking for, and nor should they. You can also talk to me. Putting a brave face on things will only prolong your suffering. Hearing a few understanding words can make a world of difference

3. Get to grips with your financial status quo

Once I started taking better care of myself, I was ready to start tackling my finances head-on. Perhaps the most intimidating task on this list—getting my money-management skills up to date.

I tried tracking every penny and getting face-to-face with my financial reality. At first, it was a major shock, but being well-informed about where my money is coming and going each month was an invaluable tool when it came to developing healthy and sustainable financial habits.

To get started, I looked at my bank statement for the previous month. I noted down all of my income streams (it was only one at the time). Then, I split my expenses into three categories: needs, wants, and savings. Needs are must-haves and wants are nice to have.  

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4. Identify areas where you can save or find extra to pay off debt

 I dug a little deeper into my financial problem areas. My outgoing expenses exceeded my income. If this, is you, you can either decrease your spending in certain areas or, if possible, focus on bringing in some extra income each month. Once you’ve identified areas where you’re overspending, you’ll have a clear indicator of where you should start cutting back. For example, let’s face it, the price of groceries is increasing, so we may have to cut back on some of the branded foods to make ends meet.

5. Create a budget

Next, it was time to decide how much money I wanted to save each month and to create a budget to support that goal. Adopting a savings mentality can take a little while to get used to, but it’s all about taking small, consistent steps towards your goal. If you’re unsure of where to begin, the 50/30/20 budget is a good place to start. One of the best tools against my financial stress was having a solid budget that helps me to navigate my finances and keep my financial health in check. 

If you are experiencing just a little financial stress and anxiety, you are definitely not alone. No matter how dire the situation may seem, the barriers that are getting in the way of progress (and likely causing anxiety) can be overcome!

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