Money can't buy happiness, and money can’t buy the best things in life. But when you’re having financial problems, a scarcity in money can start to impact other areas in life, such as both physical and mental health.
Fortunately financial experts do have some tips on how to manage your money effectively to avoid more unwanted stress and anxiety.
Jennifer Streaks, a financial expert, contributor to Huffington Post, and author of the upcoming book “Digging Your Dreams Out of Debt,” said that many Americans have issues with money.
“Only 30 percent of Americans feel financially comfortable,” Streaks said in an email. “This means that 70 percent of Americans are uncomfortable in their current financial circumstances.”
These statistics come from a recent report from a study called the 2012 Household Financial Planning Survey conducted by the Consumer Federation of America and the Certified Financial Planner Board of Standards, Inc.
“Finances can affect your mental health,” Streaks said. “If there are concerns about paying your bills, keeping a roof over your head or putting gas in your car, this can lead to stress and anxiety. I am often told of individuals that are experiencing financial challenges that cannot sleep, endure stress headaches and even have ulcers. The best thing you can do for your finances and your health is to manage your money wisely.”
Streaks has three tips for people to help manage their money wisely and avoid the stress associated with finances:
1.) “Try to save more than you spend. If you can accumulate several months of expenses in a savings account, this will definitely take the edge off of a financial situation.”
2.) “Having multiple sources of income helps greatly. Even an extra $200 to $300 a month can be a huge help in finances.”
3.) “Keep up maintenance on items that would cost a lot to repair. When a car breaks down or a home appliance is on the fritz, it can cost a lot of money needed immediately. An ounce of prevention is worth a pound of cure.”
There is also a solution for people who are already in stress mode.
“If you do find yourself becoming stressed or anxious over your financial situation, give yourself some breathing room,” Streaks said.
“Make payment arrangements on the amounts owed; try to reduce payment amounts. It is also important to realize that this situation won't last forever and that you will get through this.”
Mark D. Elliott, president of Elliott Asset Management, a financial advisor and analyst who also attended medical school at Dartmouth College, pointed to a recent study released by the American Psychological Association.
The 2011 Stress in America report released in January 2012 revealed that money is the main cause of stress, followed by work and the economy.
“It is, I believe, the number one cause of marriage problems (perhaps after infidelity),” Elliott said in an email. “People unduly stress about finances, and ironically the more money a person or family has doesn't relieve the stress.”
Elliott has a few tips to help people keep their finances in check (and as a result, keep their mental health in check too):
“I advise some clients to utilize auto deposit with their incoming deposits from work and any other sources, but rather than use one account, I advise using four online bank accounts that pay interest and include free ATM use. On their associated debit cards, in black Sharpie, they write "MORTGAGE/UTILITIES/INSURANCE" on one, "FOOD/GROCERIES/ESSENTIALS" on another, "FUN/VACATION/EATING OUT" on another, and "RETIREMENT/CHILD EDUCATION" on another. When going out to eat, they swipe the appropriate card. If it is denied, they either have to stop spending in that category until the next paycheck, or consciously take out one of the other cards (for Retirement or Mortgage) and spend that money.”
Another major suggestion is to work with your significant other (if you have one) on your mutual budget.
“If she likes shoes and he likes pizza and beers with the guys for Sunday football, each partner gets an 'allowance' that is not audited by the other spouse,” Elliott said.
“The amount they agree to spend on that must be spent by the end of the year or a set amount of time, and it must be mostly on selfish things or it won't work.”
There are many more ways to relieve stress and anxiety related to financial issues. What are your suggestions?