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May is Mental Health Awareness Month – Financial Stress

May 24, 2023

It’s Mental Health Awareness month and one thing that you don’t hear a lot about is the amount of stress financial issues brings upon a person’s mental health.  With the recent bank failures and increasing inflation causing increasing costs to everyday expenses, many of us are experiencing additional stress.  How can we reduce that stress while improving our financial security?

Here are 7 ways BankRate suggests you can manage your financial stress. 

1. Prioritize what you can control on discretionary spending

You probably can’t change everything that’s causing you stress. Focus instead of what you can control so you can improve your situation. For instance, consider your food budget. Look for ways to reduce your grocey bill, like comparing prices on different brands. You’ll not only save money, but the feeling of accomplishment and being in control may help reduce your stress as well.

Lowering your food bills can really impact your budget, since food prices are expected to increase 6.5 percent in 2023, according to the U.S. Department of Agriculture. One simple way to save on groceries is to buy store brands over name brands. Store-brand groceries tend to run around 40 percent cheaper than name brands, according to CNET research.

2. Find ways to earn more money

You can only cut a budget so far, and you’ll want to be careful that your tight budget doesn’t become a source of additional stress. With the price of consumer goods being higher than normal, line items in your budget are likely already under strain.

It might be worth looking for ways to increase your income instead. Some ways to do so include:

  • Work a few extra hours: Try talking to your employer about putting in some extra time each week, if you’re paid hourly or at least eligible for overtime pay.
  • Negotiating for a raise: Given high inflation and a tight labor market, employers may be more willing to grant a pay increase.
  • Selling items you no longer need: This can include things such as old furniture, clothing, toys, pet items and tools.
  • Taking on a side gig: A side gig can be a good option for those who want a flexible way to pad their income alongside a full-time job. This can include things like delivering food, tutoring or running a blog. The money can really add up, considering the monthly average and median income from side hustles in 2022 was $996 and $400, respectively, according to a Bankrate survey.

3. Pay essential bills

A majority of employed Americans (55 percent) say their income has not kept up with the increase in household expenses due to inflation, a recent Bankrate survey found. If you’re worried about being able to pay all your bills, prioritize essential bills first. Sorting through your bills and prioritizing them serves multiple purposes:

  • Thinking through what you spend your money on can help you identify some bills that can be eliminated or reduced.
  • Deciding in advance which bills you need to prioritize can help ensure you set aside enough money to pay them on time.

Paying close attention to your bills and prioritizing them will help reduce your financial anxiety and hopefully allow you to sleep better.

Some service providers and lenders may allow for payment extensions, which give you extra time to pay your bill. This can come in handy during a time of financial hardship. It’s important to read the terms of any extension agreement to understand whether associated fees will be charged and how the extension impacts any interest accrued.

4. Save money during trying times

It’s often hard to consistently save money, especially if you’re struggling just to make ends meet. In fact, 74% say economic factors, including inflation, rising interest rates, and change in income/employment, are causing them to save less right now, Bankrate found.

Following a savings plan and building up your emergency fund will not only help you feel more in control, but it will also relieve some stress.

Shopping around for the best high-yield savings account is worth your time, considering these accounts often earn exponentially higher yields than the near-zero rates commonly offered at big banks.  If you want to contribute a certain amount to your savings each month, you can set up an automatic transfer from your checking account.

Once you’ve built an emergency fund, you may want to put any extra savings into a certificate of deposit (CD). In exchange for keeping the money in the account for a set time frame, you’ll earn a guaranteed return rate that may be higher than traditional savings accounts.

Other places to save your money include money market accounts, cash management accounts and individual retirement accounts (IRAs).

5. Track your money-saving progress

You won’t really know if you’re making progress if you don’t track it. Make sure you know where you stand.

Tracking your progress in adding to your emergency fund over time can have a positive impact on your wellbeing. Of all U.S. adults who say concerns about money have negatively impacted their mental health, 41 percent say not enough emergency savings has caused an increase in concern over the past year, Bankrate found in its Money and Mental Health Survey.

Bankrate’s savings calculator is a handy way to determine how soon you can reach a financial goal based on how much you save every month. Another resource, Bankrate’s Magnify My APY, helps you determine your current savings rate, compare other rates, and see how much more you can earn with a higher APY.

6. Talk to your lenders

Debt can be both a financial and mental burden. Before you let debt and the stress it causes overwhelm you, talk to your lenders. The lender may be willing to make a modification on the loan, such as extending its term or lowering the interest rate, to reduce your monthly payments. You could also try refinancing.

7. Consult with an expert financial advisor

Consider talking to a financial advisor to help take some of the weight off your shoulders when it comes to things like setting goals, saving money and decreasing debt.

At the end of the day, we can’t control all of what is going on around us.  It may not be easy, but you can work to stay ahead of expenses and curb financial worries. This can be accomplished through steps like creating a budget and tracking your savings progress. Also, don’t hesitate to reach out to a financial advisor or a trusted friend or relative for advice.

Article Detail Provided by Bankrate

Filed Under: WCGB Monthly Blog

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