Ease Your Mind by Getting Your Finances in Order

In 2024, 88% of Americans reported feelings of financial stress. In fact, 65% say finances are the most stressful aspect of their lives, according to a recent Marketwatch survey.

Like any form of ongoing stress, financial stress can take a toll on your mental and physical health over time. However, by focusing on what you can control and taking small steps, you can make a big difference not only in how you feel, but also in your financial health.

What Can You Do to Minimize Financial Stress?

There are several ways to gradually strengthen your financial picture, which will help alleviate financial stress and protect your health at the same time. Here’s how you can get started:

1. Face Financial Issues Head-on:

A common response to stress is avoiding the stressor—but when the stressor is your finances, avoiding the issue may only make things worse over time.

Rather than trying not to think about your debt, savings, or other financial issues, make a commitment to face the parts of your financial life you can control.

For example, if debt payments are stressing you out, sit down and develop a plan for paying down your debt. A common approach is to start with the smallest debt first, paying as much as possible toward it while making minimum payments on other debts until it’s paid, and then moving to the next smallest debt. Just having a plan for paying down your debt is likely to make you start feeling more in control of your finances.

If you’re anxious about living paycheck to paycheck, take a closer look at your spending habits and determine whether you can cut back in some areas. For example, you may be able to lower your utility bill by unplugging electronic devices when they’re not in use, or by using a smart thermostat to control your home’s temperature.

2. Create a Budget and Stick to It

Try building a more detailed budget that outlines your income, expenses, and financial goals. Identify areas where you can cut back on spending to pay off debts faster and contribute to savings.

Incorporate a monthly savings amount into your budget. Keep in mind that saving money today will allow you to meet your financial goals in the future.

Consider keeping your money in a secure, FDIC-insured high-yield savings account like Growth Savings. Growth Savings charges you no fees, and the rate allows you to earn interest on your savings. This can help you grow your savings faster and alleviate some of the stress associated with money troubles.

3. Build an Emergency Fund

Once you are in a good rhythm of saving money each month, consider establishing an emergency fund to provide you with a safety net during times of financial crisis.

This way, rather than relying on credit, you’ll have cash on hand to cover unexpected expenses.

A good goal is to save three to six months’ worth of living expenses in a dedicated savings account, but it’s ok to start small. If you can only save $20 a week, after one year, you’ll have more than $1,000 in your emergency fund.

A high-yield savings account like Growth Savings can help you build your emergency fund faster by earning a high rate of interest.

4. Automate Financial Tasks

Put technology to work for you by automating contributions to savings and other regular financial tasks. If you don’t want to use automated bill payments, consider setting automated reminders so you won’t miss a bill. Automation can help you avoid late payments and resulting fees and stress, while keeping you on track to meet your financial goals.

For example, if you have a high-yield savings account, you can initiate recurring deposits from your checking account or directly from your paycheck. That way, you’ll never forget to pay yourself first and can better resist any temptation for additional spending.

5. Stay Optimistic

The good news is that while financial health does affect our mental and physical health, there are opportunities to improve your finances. Taking an honest look at your present financial situation and starting to take small steps will get you closer to your goals. When you have a plan in place and you’re saving, paying down debt, or meeting other financial goals, you can rest assured knowing you’re making a difference for your finances and making progress over time.

Disclaimer: This article is for information and education only. It should not be considered financial or tax advice.