Like it or not, money is the lifeblood of the modern world. Having money improves your ability to access everything from basics like food and shelter to luxuries like entertainment and travel.
In many ways, the amount of money you have access to represents the amount of agency you have. So while having money doesn’t necessarily equate to being happy, it does better position you to make the most of your life.
On the other hand, not having money can prevent you from truly enjoying life. If you lack spending power, it will be more difficult for you to ensure access to even necessities. Often, stress on your finances translates to actual physical and emotional stress.
When you get to that point, it can be hard to know which issue to address first. How can you address your finances when you’re too overwhelmed to think about it? And how can you address money-related stress without money?
The truth is: that it’s important to address both issues somewhat simultaneously to improve your financial and personal well-being. While they’re related, fixing one doesn’t necessarily fix the other, although it helps.
With this in mind, read on to learn how to manage money-related stress and improve your financial position.
Address Your Mental Health
First things first: if your mental health is struggling, that often can impact your finances.
Now, don’t take this statement as a hard and fast rule, but rather as a guiding principle. Mental health challenges can often affect one’s ability to work consistently or make clear financial decisions, potentially impacting income and financial stability.
Often, improving your financial well-being involves making long-term money moves, like investments, that will benefit you in the future. This means that you may need to make more immediate, short-term sacrifices to reach that future.
Focusing on these long-term money moves can be challenging to emotionally cope with. So it’s important to put yourself in a good headspace so you can make healthy, forward-facing decisions.
Now, it’s true that traditional therapy and psychiatry can be expensive. But, thankfully, these days taking care of your mental health doesn’t have to gouge your wallet. Online mental health services, like BetterHelp, will connect you directly with licensed professionals for a low fee.
If you don’t need therapy but still need prescriptions, Nurx provides access to medication like Lexapro online. Resources like these make it possible to receive professional mental health help online without breaking the bank.
Outside of professional help, focus on cultivating your economy of practice. This can mean incorporating yoga, meditation, forest bathing, or other wellness activities into your life that boost your sense of relaxation and ease.
Destressing is crucial for your health, so think about what activities help you destress and schedule them into your day. Don’t just wait for the right time for them to “just happen.” Actively take the time to decrease your stress.
With a calm mind, you can make better financial decisions.
Build a Foundation
No, not like a pillow fort, though having fun is criminally underrated and can help destress. So if you want to start with a pillow fort, go for it! Then, once you’ve finished Mount Pillowmanjaro, turn your attention to your bank account.
If you’re like many Americans, you’re probably just one or two missed paychecks away from financial disaster. This means that if you lose your job, you’ll have no way to pay for everything.
Living life on that sort of financial edge is stressful, so create a way to help yourself back away from that edge.
Building a foundation of cash is your priority. This foundation is called your emergency fund, and it should be big enough to cover your finances for at least six months. Ideally, it would cover a year or more.
That way, if you are ever unable to work, you can rest assured your immediate expenses are covered. As for where to put this cash, deposit it all into a high-yield savings account. That way, it grows passively little by little.
Calculate how much your monthly expenses are to discern how much you need to stockpile in your emergency fund. Include everything from obvious payments like rent and utilities to more dynamic expenses like groceries and entertainment.
The latter tend to fluctuate from month to month, though you can also be more disciplined to regulate them. Once you have a good idea of your monthly expenses cost, multiply that number by how many months you want to save for.
Now, depending on how much your life costs, your target may be a bit daunting. However, keep in mind that the goal here is to create a cushion if you or your loved ones ever need it.
With this in mind, you can begin budgeting aggressively to work toward completing your emergency fund. The more you cut costs, the quicker you’ll save. Focus on prioritizing only what you need.
Beyond Basics
Addressing your mental health and creating an emergency fund are two fundamental steps you can take toward improving your financial well-being today.
However, to truly improve your financial position, you’ll want to explore more advanced strategies to improve your finances over time. Investing your money is one of the best ways to set yourself up for financial success.
Now, you can invest in individual stocks. But rather than play that sort of high-risk game, which is also stressful, open an IRA, Roth IRA, or 401(k). With these accounts, you can set up automatic deposits, so you don’t have to worry about transferring funds each month.
While contributing to additional accounts while building your emergency fund can be daunting, there are ways to prioritize both.
Add enough to your retirement account(s) to take advantage of any employer-matching contributions while gradually building your emergency savings. If you don’t have employer matching, balance your contributions to both retirement and emergency funds.
Gradually increase your emergency savings until it reaches the recommended level while still contributing regularly to your retirement accounts.
Remember, you’re playing the long game here, so you may not see this money for years if not decades. However, the longer it sits there untouched, the greater the payoff. Your future self will thank you.