Financial stress is at an all-time high in the United States – the COVID-19 pandemic created a huge flux of hiring freezes and layoffs, making many of us uncertain about our careers and financial future. Without adequate support and coping mechanisms, it can often feel like our finances are completely out of control. But there is hope.
There are many tried-and-true ways to help you get your finances back on track and ensure that you recover quickly from this tough time.
- Budgets Are Everything
The easiest, most effective way to keep your finances on track is to keep a detailed, realistic budget. While this might seem like old news, the truth is that financial stress is a vicious cycle – anxiety about money prevents you from thinking about it, which makes it easier to get further into debt, and the cycle repeats. Making a successful budget can help you stay on track and manage your money more effectively.
- Make an Emergency Fund
Having an emergency fund is an effective way to reduce financial stress because it ensures that you have a safety net for unexpected expenses. Building up a huge fund can feel daunting if your income isn’t high or you’re struggling with debt, but putting aside small amounts each month can help you build a nest egg for those unexpected expenses that most often lead to debt.
- Be Honest About Your Habits
When we’re facing financial stress, it can be difficult to be honest about your spending habits and change them. Keeping a detailed expense report for a month or two can help you identify where all of your money is going and what you could cut down on. Some things are obvious, such as limiting fast food and skipping expensive activities, but it can also come down to your major expenses. Opting for a less expensive apartment or a lower car payment can drastically change your financial situation.
- Ask for Help
In our incredibly consumer-based society, it can feel humiliating to admit that we’re struggling financially. But if we manage to get through these negative emotions, there are so many services out there that can help you get out of debt and back in control. Credit counselling, financial planning, and even services typically focused on investing have advice to help you take control of your finances and gain peace of mind.