10 Ways to Lower Stress About Money

Why Money Is Stressful

Personal finances are stressful for people particularly because of the rising cost of living. Economic uncertainty and fluctuating job markets add to the anxiety, as we worry about job security and stable income.

The pressure to save for long-term goals like retirement and education while managing debt creates a constant financial strain. Also, the pervasive influence of social media leads to unrealistic comparisons and financial expectations.

In short, we are all stressed about money.

How To Reduce Financial Stress

A small amount of stress can be motivating, but thinking about your finances day in and day out is not healthy.

Working to reduce financial stress means better understanding your financial standing, making a plan, and then taking reasonable steps. It does not mean ignoring your finances and debt.

Here are some little-talked-about ways to help you manage personal finance stress.

1. Document Your Financial Accounts

If you are relying on memory alone to remember all of your financial accounts, passwords, and details, you are going to feel stressed.

Instead, open a blank Word document or Excel sheet and list your information. By recording the account institutions, balances, passwords, beneficiaries, and more, you are allowing your mind to let it go.

This is a highly sensitive document, so ensure you protect it accordingly.

2. Ask What Matters Most

Take a moment to reflect on what matters most to you in life. What are your core values? Is it family, travel, or perhaps independence?

Jot down at least five core values that represent you. Then, write out at least three life goals.

These are the things you want your life to be about. Do any of them require money? If so, which ones and how much? Maybe you don't need as much money as you once thought in order to be true to yourself and uphold your core values.

Getting into the habit of paying off your credit cards every month will help you lower your stress.

3. Separate Checking and Savings

In order to have savings, you need to have a savings account. Trying to mentally account for how money is allotted when it is residing in a single account is a recipe for stress.

Choose a savings account that doesn't require a minimum balance or offers zero fees.

4. Understand the Big Costs

Budgets are important, and we will get to that, but first, let's focus on the big costs: housing, student loans, and childcare.

Not all of these are relevant to everyone, but these are three big-ticket items that can make or break a budget. Thus, spending more thought and energy on lowering these costs than on strategizing whether to make coffee at home or splurge on that latte will have a bigger impact on your finances and thus your stress level.

Which of these three big costs are you incurring? Have you brainstormed ways in which you could lower any of these?

For example, can you get a roommate, apply for a loan forgiveness program, or take advantage of a dependent care account through your work?

5. Non-Money Rewards

Make a list of 10 ways you can reward yourself that don't involve money.

For example, taking a bath or going for a walk in nature would be rewards in this category. Get creative.

This will help retrain your brain to not only value rewards that require you to spend money.

Ideas for Free Rewards

6. Educate Yourself

Sometimes stress comes from the unknown. If finances seem confusing, your stress level might be lowered by taking the time to educate yourself a bit more in that area.

Your local library has free personal finance books, or you could listen to an audiobook. Alternatively, you could start following a personal finance podcast or read a finance blog.

By investing in your knowledge of finance, you will feel more confidence in your ability to control your financial situation.

7. Review Your Statements

Where is your money going? Often, people don't know, and that leads to stress.

Take the time to review your bank account and credit card statements at least once per month. Use whatever system you like to start understanding how your money is being spent.

Before you can really build and stick to a budget, you need to have a baseline for where your money is going now. Would you be able to answer the question of how much money you spend on food monthly?

8. Forget the Jonses

You know the saying "keeping up with the Jonses"? The implication is that we compare ourselves to our family members, neighbors, colleagues, and of course, to every single person on social media.

If you want to stress less about money, you have to forget about the Jonses! Your finances are yours. Your goals and satisfaction should not be influenced by anyone else's standing.

9. Low-Tech or High-Tech

Some people reduce financial stress by using new apps, spreadsheets, or software. Some people prefer low-tech cash envelopes or written checkbook balancing. There isn't a right or wrong way.

We all tend to feel like everyone is doing their finances better than we are. That they know more and understand the complexities, but that isn't reality.

Don't force yourself into high-tech solutions if that is only going to cause more stress.

10. Set Financial Goals

Too often, people don't actually have specific financial goals. However, they are stressed that they don't have enough money. This becomes a perpetual state of needing more, and it can never be satisfied because the end goal hasn't been determined.

By setting some basic financial goals, such as limiting your food budget to $300 per week or saving 5% of your annual salary for retirement, you can numerically track where you are at. You situation might not be as dire as your stress level would indicate.

When the Problem is Bigger

The majority of people feel stress about their financial situation, but if you think something bigger is happening--a gambling addiction, a spouse's secret spending, or panic attacks--it might be time to enlist the help of a professional.