According to a study shared on Inc., financial stress can directly relate to your health. Two of the most common effects of financial stress are depression and anxiety—which can seriously disrupt your mental health. While some amount of stress can be good for you, constant stress is definitely not. Okay, so you know financial stress is not fun. It might keep you up late at night or lead to another common cold. But there are ways to manage and eliminate financial stress without feeling overwhelmed. Consider these tips to limit your financial stressors and improve your mental health in the new year.
Create A Budget
One of the first things that you should do when trying to alleviate financial stress is to create a budget. This task is easy and can help you visualize what you need to do to get out of a financial hardship.
Initially, list out all of your recurring monthly expenses and their due dates. List out your monthly income, but make sure to divide it by paycheck, and follow with determining what paycheck will pay which bills. After you have figured out where to allocate your monthly income, determine how much money you have left over at the end of the month. Take the extra money and divide it in half. A portion of these funds should go in a savings account where the other half, you can use for entertainment and other non-essential purchases.
Find A Bank That Fits Your Needs
As mentioned before, the surplus money that you have left at the end of each month should be divided into two—meaning half should be deposited into a savings account. Now this sounds like an easy task, but first it’s vital to find a bank that fits your needs in order to successfully implement this process.
The easiest way to save money is by opening a savings account at the same bank you have a checking account. However, make sure that you do your research to see if the bank has any additional fees. Common fees include a monthly maintenance and a minimum amount cost. Finding a bank without added fees is possible—why pay to save money? Watching a savings account balance grow at your fingertips will help put your mind at ease. Knowing that you have extra money for emergencies, will help limit the stress of the what-if moments.
Tackle Your Debt
After finding the bank that benefits your personal finances, and making a budget for all your expenses, it’s now time to tackle your debt. Yep, you’ve probably tried this before—but going in with a new plan and a positive attitude can help make it stick! Whether you have credit card debt or student loans to pay off, it is important to make a plan on how you’re going to handle these payments in the most efficient way possible.
Paying in an avalanche style is always a good option. To do this figure out which one of your loans has the highest interest rate and balance. Once you’ve determined this, dedicate more money to that payment each month until it is gone. The wins of watching your debt disappear will also help your mental health improve. As the amount of your monthly expenses lessen, you will not only have more money to spend on non-essential purchases, but you will also have more money to put into your savings account.
With the beginning of a new year, it is important to set goals that are going to improve your financial and mental health. These tips will conclude that the more time you take to make financial decisions a priority, the more your mental health will thank you in the long run.