Financial considerations to help reduce stress, anxiety
Getting one’s finances in order can help relieve stress, anxiety and potential arguments in the home. However, household debt is making a comeback, according to the Federal Reserve Bank of New York. It says combined household debt in the U.S. peaked at $12.7 trillion in the first three months of 2017.
1. Make a budget and stick to it
The primary way to alleviate financial stress is to create a budget and stick to it, says Heather Van Hooser, president of private banking at Mabrey Bank.
“The budget is a roadmap for our financial future, for where we are and where we are going,” she says. “It’s vital we live within our means.”
2. Make sure all parties are on the same page
Van Hooser says it’s important to create the budget with your spouse or significant other so both people can be on the same roadmap. The budget allows individuals to look at expenses and see where they can be reduced and how to plan for emergencies.
3. Periodically check in
Although a budget also helps plan for future goals, Van Hooser says it is incredibly helpful for checking in a quarter or halfway into the year to ensure you’re on the right path.
4. Have honest, open conversations about money
Communication also is key to alleviating stress, Van Hooser says. Oftentimes, she sees one spouse feeling as if they need to carry the financial burden. If one spouse is living under a different spending philosophy, “it can be a train wreck,” she says. The miscommunication can lead to short- and long-term effects such as anxiety, lack of sleep and even divorce.
5. Beware lifestyle inflation
Lifestyle inflation is another red flag. Many think an increase in salary is an opportunity to spend more, but it should be an opportunity to save more.
“Say you get a raise of $50,000, it’s not uncommon for people to think they can spend all that,” she says. “What they are avoiding is planning for their future.”
6. An emergency fund is your first goal
What they need to focus on is creating an emergency fund with enough money to cover expenses for six months. “Developing an emergency fund is crucial in reducing stress,” she says.