Stress can be a very overpowering emotion, and when left unchecked, it can start to affect many different areas of your life. The bleed-out of that stress can taint virtually everything you’re trying to do, even in your everyday life. Unfortunately, that also extends to your finances or other money-related matters.
Finances are always a bit of a tense subject, and for many, they’re a source of stress in and of themselves. That’s why learning to keep your stress away from your money is such an important thing to do! But that’s easier said than done, and it’s easy to become resigned to the entanglement of distress and cash trouble.
So, how does this happen? And what can you do to circumvent that sort of problem? How can you make sure your accounts aren’t affected by your emotional state?
7 Ways Stress Can Impact Your Finances
Here are seven ways stress can impact your finances and ways to fix it in three methods.
1. You Stress-Spend
You’ve heard of stress-eating, but have you thought about stress-spending? This habit involves using your finances to buy items to make yourself feel better due to your stress or negative emotional state. These purchases may include:
- Items to cheer yourself up
- Self-medicating things, like alcohol or food
- Impulsive trips for escapism
- Purchasing items for other people
Of course, there’s nothing wrong with a little bit of retail therapy now and then. But impulsive purchases based on the emotional state are a clear sign of stress-spending that is undoubtedly taking a toll on your finances.
Relationship and interpersonal conflicts are far from unusual, but sometimes it can be hard to see how they can relate to your finances. Well, think about it. Severe issues in your relationships and even your work relationships can lead to disturbances and distractions, and stress often creates worsened relationship issues.
These kinds of distractions can affect your performance in everyday tasks, including in your job. This may lead to issues related to job loss or an inability to achieve your work goals or tasks suitably, which can harm your finances in the long run. Relationship problems may also cause you to turn to use gifts and money as a method of making up for wrongdoing or patching up problems.
3. You’re Not Organized
Being stressed out means that you’re often not correctly organized. This means it’s tough to do these things:
- Organize a place to keep bills you must pay, so you don’t overlook them.
- Avoid overdraft or late payment fees.
- Maintain any records of your accounts.
Your finances need to be at least somewhat to avoid paying extra fees and pay your bills on time without facing further issues. And, of course, a little bit of bookkeeping goes a long way, so stress that prevents you from doing any of those things can impact finances.
4. You Make Decisions Reactively
Financial decisions are often ones that need to be taken seriously and made with the utmost care. While there are some decisions that you have to make quickly, for the most part, any choice that may be able to impact your finances seriously should require some further thought.
But stress can make you very reactive, meaning that when you’re faced with a decision, you can react without taking the time to think first. You feel overwhelmed and pressured by the need to make a choice, so you say whatever you first latch onto. From a financial perspective, you may:
- Jump too hastily into a risky financial decision
- Spend your money on things you don’t want to spend money on
- Opt to avoid making a serious decision at all completely
5. You Switch Back To Dysfunctional Habits
A lot of dysfunctional habits can be related to finances. The way you interact with the world around you is informed by your past, and the way you handle and conduct yourself is just as affected. When you’re under a lot of stress, you may automatically revert to harmful habits. From a financial standpoint, this may include:
- Financially enabling people in your life
- Using money or finances as a crutch
- Becoming overly spendthrifty
- Feeling guilted into financially providing for others.
6. You Give Up On Your Plans
Many people have financial plans in place that they try to follow to the best of their ability. If you’ve got one, you may think that you’re protected against stress, but that’s sadly far from the case.
Stress can make you completely abandon your financial plans. This may happen for many different reasons, but it’s easy even to become stressed out by those plans to begin with. The very necessity of following a budget or setting your accounts in a certain way can be stressful in and of itself, so you might wind up ultimately throwing in the towel from the start – or as soon as the tough gets going!
7. You Have Catastrophic Thinking
Stress can be a significant trigger for catastrophizing, which assumes the worst and makes mountains out of molehills. It’s a surefire way to lose positive thinking as you imagine all the very worst things that could happen.
When you catastrophize from stress, you are more prone to performing acts of financial self-sabotage. You may make desperate decisions because you think everything is falling apart, so you may sell property or important items – sometimes for too low of a price – because you’re worried about your financial situation.
3 Ways To Fix Stress Impacting Your Finances
Now that you identified a problem let’s look at how to form new habits.
Many people overwhelm themselves with stress too quickly by creating a very detailed financial plan to manage their finances. To avoid counterproductive stress that will overwhelm you into abandoning it, start by simply making a simple monthly budget. You can always build a more comprehensive plan later. In the meantime, here are some tips for a simple monthly budget:
- Include all standard everyday, typical expenses, to begin with, adding everything from rent to utilities and from usual grocery prices to the cost of transportation.
- Try to set up automatic payments for your bills where possible, so you don’t have to think about your monthly bills.
- For annual payments, divide them by 12 and set aside that amount of money every month so you can save up for those payments in a manageable way.
- Focus on the items to spend on over things to save; you are likely to become stressed out if you focus on saving and end up running out of money.
- Once you have a comfortable idea of your budget, start deciding where to cut back on so you can make savings.
- If you can, it’s a good idea to consider the risk of emergency funds being necessary, so try to factor in a little wiggle room for potential unexpected expenses.
2. Hold Yourself Accountable
It sounds a little strange, but the act of being responsible for your mistakes and decisions can make you less stressed out. Avoiding and dodging accountability will only further set the feelings of stress as you become overwhelmed by all that you deny. Holding yourself accountable for your finances is therefore essential. You can do so by:
- Being aware of your financial weaknesses
- Staying realistic about financial goals
- Creating reasonable and attainable financial goals
- Don’t let yourself be discouraged by setbacks and difficulties
- Learn to identify triggers for financial impulsivity
- Please take note of your debts and work towards paying them off at a regular rate
- Be honest in your bookkeeping
Of course, remember that you also need to be kind to yourself. You can and should hold yourself responsible for your behavior. But you also need to understand that setbacks are natural and are okay. You won’t be perfect at handling your finances right away. So being too hard on yourself for that will stress you out even more!
3. Learn To Manage General Stress
Focusing specifically on financial issues helps prevent stress from impacting your finances, but it’s also essential to better manage general stress. When you can handle high levels of stress on your own, you’ll be less likely to harm your finances from that emotion. Here are some common, tried, and tested tips for managing general stress:
A little bit of physical activity goes a long way. A total of 30 minutes of exercise a day, even if it’s as simple as taking a leisurely walk in a park, can work wonders for your positive thinking. Studies have shown just how good exercise-based interventions are for stress levels, as they improve mood, boost energy levels, and help you feel more confident in your ability to fight stress.
· Eat Well
What you eat can determine how you feel to some degree. The worse the food that you eat, the more stress can flare up and infect you. Unhealthy food often creates inflammation that can raise levels of the stress hormone cortisol, making you feel much worse.
· Practice Gratitude Every Day
Gratitude is a beautiful and very positive trait that helps you to take stressful moments in stride. Instead of becoming overwhelmed during times of stress, gratitude will let you find silver linings and allow you to focus on learning lessons from the situation.
When you feel tired, stress is more likely to be a more exhausting ordeal to handle. Research shows that it’s more than just how much you sleep, but also the quality of that sleep that determines your ability to manage stress and positively perform your daily tasks. As such, you should practice healthy sleep habits, including sleeping in suitable temperatures and at regular times every day, to gain both sufficient sleep time and sufficient sleep quality.
Stress is an unfortunate part of everyday life. The trick is to keep your stress levels at a reasonable level to avoid those feelings afflicting other aspects of your life. Reach out for help from friends, family, support systems, or even mental health professionals as needed if you need a little help handling your stress!