Let’s start with a scenario. Bob has had a tough year with a divorce, a job lay-off and medical bills from his daughters’ unexpected surgery. To add insult to his injury, Bob’s ex-wife took his hunting dog. In one year, he has lost his wife, job and dog. Yes, Bob has had a county music kind of year.
However, things are beginning to look up. After nearly six months of pounding the pavement and the Internet, Bob has landed a new position with an ad agency in Chicago. However, a half year with a severely limited income has taken its toll. Creditors are calling and collection notices arrive frequently. Bob is seriously behind on his mortgage payments and is starting to wonder if he’ll ever get out of the hole he’s found himself in. Bob is feeling the effects of his financial stress.
The symptoms of financial stress
If you’re in a situation similar to Bob and money worries are consuming you, your health may be at risk. Research has shown that prolonged stress can break down your mind, body and spirit. Some health issues related to living with financial stress include:
- Unhealthy behaviors: Overeating, smoking and drinking, but also skipping the gym and doctor visits.
- Mental health: Depression, hopelessness and anxiety. Lack of sleep can lead to health problems.
- Metabolic syndrome: This group of conditions can put you at risk for diabetes, stroke and heart disease.
- Inability to think clearly: Money worries can quite literally consume your mind. Studies show chronic stress can eat holes in brain tissue.
The cure for financial stress in five steps
It might be obvious to say that the best way to relieve your financial stress is to improve your financial situation. That may be easier said than done, but there are things you can start doing today that can help.
Here are five steps you can take that may improve your situation:
- Make a budget: A budget is a spending plan to help you decide how and where best to spend your money. Have debts? List them out. Add in your monthly expenses. Your income sources should be listed as well. A zero-based budget accounts for every penny and details your plan to save, spend and give.
- Create an emergency fund: You’ll want to set aside money to cover unexpected expenses like car repairs, appliance issues, doctor co-pays and such. Experts suggest starting with a goal of saving $1,000.
- Determine what changes you can make: The Serenity prayer says, “God, grant me the serenity to accept the things I cannot change, courage to change the things I can, and wisdom to know the difference.” Are there things that you can change to improve your situation? Are you overspending? Could you make more money? Could you trim small expenses like your latte or Netflix?
- Get professional help: This is the route Bob should take. An experienced financial professional can guide Bob through his best options. If Chapter 7 bankruptcy is filed, collection calls will cease immediately and a clean financial slate can help ease his fears.
- Find the positives: Lou Holtz was quoted as saying, “Virtually nothing is impossible in this world if you just put your mind to it and maintain a positive attitude.”
These steps can lead Bob out of debt and stress and into a life worth living. Remember, your mission in life isn’t to merely survive, but to thrive.