Financial Stress Can Take a Toll on Mental Health; Here are 5 Ways to Reduce the Pressure
Amid the high rate of inflation, earnings aren't keeping up with the rising cost of living, and thus young people are struggling with financial stress. They find it difficult to save money, pay their bills, and plan for the future in such a tight spot. In Bankrate's 2024 Money and Mental Health Survey, nearly half of respondents (47%) report that their mental health has suffered at least once as a result of financial concerns.
Impact of financial issues on mental health
The majority of adults said that money occasionally hurts their mental health, while 51% of women and 42% of men reported experiencing this impact. The worst affected group is Gen Xers (aged 44–59), of whom 54% say that having money hurts their mental health. In contrast, 40% of baby boomers (aged 60-78), 50% of millennials (aged 28-43), and 47% of Gen Zers (aged 18-27), feel that way.
The majority of people who live in homes with annual incomes under $50,000 claim that having less money has a detrimental impact on their mental health. For individuals making between $50,000 and $79,999, this goes down to 48%, for those making between $80,000 and $99,999, it drops to 39%, and for those making $100,000 or more, it hovers around 40%. Inflation is the main problem affecting the mental health of people affected by financial worries, with 59% bothered about paying for daily expenses, 56% stressed about not having enough emergency savings and 47% struggling to manage debt.
In the shadow of such distress, some simple lifestyle changes and spending habits can help people cope with financial instability that affects mental health.
1. Focus on what you can control in your spending
Start by comparing costs and choose less expensive brands to see if you can reduce your food bill. You can feel more in control and save money by doing this. The US Department of Agriculture predicts that food costs will increase by 2.2 percent in 2024. Purchasing store brands, which are typically 40% less expensive than name brands is an easy method to save money.
2. Increase your income
To reduce the cost of your commute, you might bargain with your company for benefits like remote work. Selling goods like used clothing and furniture can also generate additional revenue. Getting a side job, such as delivering food or tutoring, can also be beneficial; a Bankrate survey from 2023 showed that the typical individual with a side gig made $810 per month.
3. Pay essential bills
Setting priorities for important obligations is important because 60% of Americans who are employed feel that inflation is the reason why their income hasn't kept up with rising expenses. You can determine which of your bills can be cut or eliminated by going through them. Making a priority list of your expenses in advance will guarantee you have the funds to pay them off on time, easing your financial strain and enhancing your sense of security. In times of financial difficulty, certain service providers and lenders issue payment extensions, giving customers more time. Make sure you thoroughly read the terms to comprehend any additional fees or interest.
4. Track your money-saving progress
Tracking your development tells whether your efforts are having the intended effect. Keeping track of the growth of your emergency fund over time can make you feel better. According to the Money and Mental Health Survey by Bankrate, 56% of American adults worry about not having enough money saved for emergencies. Having more money set aside for emergencies can ease your mind and provide you the assurance to pay for unforeseen costs. According to Cara Macksoud, CEO of Money Habitudes, "understanding your opportunities and how your money works for you comes from good financial health and a positive mindset." Understanding your finances helps create a positive money mindset.
5. Consult with a financial advisor
According to research, having an advisor can increase your portfolio's value by roughly 3 percent a year. According to Cara Macksoud of Money Habitudes, "a financial advisor should validate your feelings and help you feel confident in your plan" during stressful times. Having a long-term connection with an advisor gives you the ability to monitor your progress over time and gives you peace of mind even in times of market volatility.