Financial stress significantly impacts the lives of many Canadian and American employees. A recent survey conducted by Borrowell reveals that 74% of Canadians are feeling stressed about their finances.[i] According to research by Thriving Wallet, money is a significant source of stress for 90% of American employees.[ii]
While these statistics are revealing, there are simple steps that you can take to decrease the amount of stress you feel in your financial life. Here are three keys that can powerfully support you in alleviating financial stress and anxiety.
1 – Know your numbers
When you know how much money is coming in and going out each month, and accept this awareness without judgement or criticism, you can gain insights into what aspect of your current financial situation you are worried about. What are worried about? What’s keeping you up at night?
Do you worry you’re spending more money than you make?
Do you worry about your current debt levels and how you’re going to repay them?
Do you have a big financial decision coming up and you have no idea what to do?
Do you want to be saving for an important goal but aren’t sure where the money is going to come from?
Being able to articulate what specifically in your financial life is causing you stress gives you back your power. It’s like when you were a kid and scared of the monster under your bed. Your imagination created all sorts of terrible scenarios for how the monster was going to jump up and scare you, or maybe even kidnap you. It wasn’t until you got up the courage to look under your bed that you discovered your ‘monster’ was really just an old stuffed animal you thought you’d lost.
Okay so that may not be the perfect example; I know your financial concerns are not really an old stuffed animal hiding under your bed. But what often happens, when we don’t know what’s going on in our finances, is that our imagination runs wild and creates worse-case-scenarios that are often way scarier than reality. This is the power of awareness.
*Tip: Schedule time in your calendar to dig into your numbers. Pick a time when you’ll be able to focus without interruption. Turn off all notifications on your devices so you’re not distracted, put on some of your favourite music, grab a favourite drink or snack and tell yourself ‘you’ve got this!’ And when you’re done, celebrate! You have taken a powerful step towards alleviating your financial stress and strengthening your financial wellbeing.
2 – Create a plan to address your financial concerns
Focus on one concern at a time and keep your plan simple. You want to identify specific action steps you can take to tackle each concern and then set a time to complete each action step.
For example, if you worry that you are spending more money than you make, specific actions you can take may include:
(1) Creating a plan for recording and tracking your spending (see ‘5 Tips to creating a budget you will actually enjoy using‘);
(2) Scheduling time each week to record your spending and compare it to your plan;
(3) Identifying spending categories where you tend to spend more than what’s in your plan;
(4) Setting boundaries that will support you and your top priorities. Know what situations you may be tempted to spend more than your plan. This is about self-awareness, not judgement. If you need to set strong boundaries for yourself at first that’s okay!
I’ve had clients leave their credit cards at home and take cash when they go shopping so they can stick to their plan. My local farmers’ market is my Achilles heel. In the past I’ve had to take cash instead of my credit card so that I would not spend more than my grocery plan. This is about YOU and what is best for your financial health and wellbeing.
*Tip: If you feel you don’t have enough time to take specific actions to tackle your financial concerns, consider how many hours a day you currently spend stressed about your finances, or the hours of sleep you’ve lost over financial worry and the impact that had on your productivity the next day. How much time would you gain back if you no longer worried about your financial situation because you had a clear list of actions you were taking to address your concerns?
Consistently feeling stressed and anxious about anything uses a lot of mental space and energy. Putting a plan in place, that you can refer to when the worry shows up, will help free up a lot of mental space and physical energy that you can use in areas of your life that matter to you.
3 – STOP comparing your financial journey to others
Each of us has a unique set of values and priorities which translate into unique financial and life goals. These will be different from your family, friends and colleagues, so why do we feel the need to compare ourselves to others?
It’s not uncommon for a significant source of financial stress to come from ‘feeling you’re not as far along financially as you ‘should’ be’. You look around at where you perceive others are on their financial journey based on your conversations with them and their level of spending (on house(s), car(s), vacations, where their kids go to school etc.), and then compare that to your actual situation and conclude you’re not as far along as you ‘should’ be. The comparison is not accurate, as you’re comparing a perception of their reality to your actual reality! Even more importantly, I don’t believe there are any ‘shoulds’ when it comes to your financial health and wellbeing. In fact, if I could eliminate the ‘s’ word from everyone’s financial vocabulary, I would!
The word ‘should’ implies there are good and bad decisions and right or wrong paths that dictate your financial health and wellbeing. If you ‘should’ be saving more for retirement, what this really implies is that your current level of saving is bad and therefore you are not on the right path to retirement. If you ‘should’ have less debt, what you’re really saying is that your current debt levels are bad and therefore you are not on the right financial path.
How incredibly discouraging and de-motivating is that? If you constantly feel like you make bad financial decisions and are not on the right financial path, how likely are you to believe you can make changes that will support your financial wellbeing?
The key here is YOU. This is about what’s important to YOU, not what others are doing with their financial resources on their unique financial journey.
*Tip: It’s okay to ask for support. Sometimes it takes an independent and objective financial professional to help you see the financial path that aligns with your unique values and priorities and will best support YOU in decreasing your financial stress.
These three keys are simple, and you can begin them today. It all comes down to knowing what comes in and what goes out, creating a simple plan that works for you and living out your authentic financial journey, not the journey of others. If I can support you along your financial journey, I would be honoured. Schedule a complimentary call with me!
[i] https://www.globenewswire.com/news-release/2020/03/24/2005424/0/en/New-Survey-Reveals-3-in-4-Canadians-Experiencing-Financial-Stress-Due-To-COVID-19.html
[ii] https://bestmoneymoves.com/blog/2020/02/25/financial-stress-health-and-employee-wellness-in-2020/