Financial stress is on the rise, no thanks to the rising living costs that has plagued us in recent months. A global survey published by Deloitte found that a combined total of 93% millennials and Gen Zs are suffering from financial stress. Another financial services firm, PwC, found that approximately 65-76% of participants in America across several industries experience financial stress stemming from personal debts and dip in spending power.
Financial stress is a global problem that affects all of us at some point in our lifetime. When the bill gets insurmountable and it begins to affect us physically, emotionally and psychologically, they can lead to dire consequences. Thankfully, it can also be overcome with prudent planning. With tiny tweaks to your expenditures and acknowledgement of the situation, you can significantly improve things and lead yourself to a path of financial freedom. Here are things you can do to cope with it.
Talk it out with your loved ones
When you’re financially struggling, talking about it to your loved ones will help them understand the gravity of the situation, especially if you’re the breadwinner of the house. Sit down and talk to your kids about how the situation is affecting the family, teach them the significance of being frugal and persevering through tough times. Make sure that you, your spouse and your kids are aligned in financial goals, and work together as a single unit to overcome the hurdle in any capacity that you can. When questioned about the future, it is okay to express uncertainty about things, but maintain optimism that financial stressors, as with all things, will come to pass.
If you're single, letting your loved ones know where you stand financially will allow you to draw the lines and maintain your financial wellbeing. Sometimes, your loved ones may “interrogate” you. You do not need to explain yourself nor offer too much information, a simple “I can’t do that as my finances are weak” will suffice. You do not owe anyone an explanation about your finances, but you are liable to ensure that your struggles do not spill over to your loved ones.
Reach out for help
When we’re in a financial slump, it might feel like the best way to face things is to bottle things up and go at it alone. Not surprisingly, finance can be a contentious subject among friends/family members and you may become a subject of ridicule once people learn about your financial problems. However, if you have a supportive circle that acknowledges and empathizes with your struggles, it might not hurt to reach out for financial assistance. In a time when financial stress is no fault of our own, people are more understanding and empathetic towards our struggle. We know that it can be embarrassing to receive help, but acknowledging your situation is a sign of courage, not weakness.
Even if your support system cannot provide you with any assistance, talking about it is a great way to relieve stress. They may even be able to help you in non-financially related means such as networking you to a friend who is hiring, helping you buy groceries, even patronizing your business if you have one.
Lastly, you can also reach out to financial advisory firms for advice and assistance to streamline your bills. Many advisory firms who liaise with banks offer income-based payment plans and personalized debt plans to help the financially struggling to pay off their bills one step at a time.
Maintain prudent spending
In the past, we’ve briefly talked about living on a budget plan. But budget planning is one of the many tools and methods people use to monitor their spending. Here are some other means of prudent spending.
Identify your spending patterns
Do you feel the need to spend after every little success? Do you constantly find ways to spend some extra cash when you’re stressed out at work to reward yourself? Do you find yourself justifying every little purchase all the time? Emotions play a big part in spending and they can sometimes drive us to spend unnecessarily, even the positive ones. Identifying the triggers will help you stick to your budget or plan. Try to note the emotions that accompany an unwarranted spending spree i.e. joy, excitement, pride, stress, anxiety or depression. Rewarding yourself after a long run does wonders for your health but finding every little excuse to go into “retail therapy” can threaten your financial wellbeing.
FIFO, or a common term to describe first in, first out, is a practice employed by businesses to clear out the earliest inventory or bills. In this case, it’s prioritizing the first bill that comes through your mailbox.
The opposite to FIFO - LIFO, or last in, first out. This could apply to prioritizing paying off bills that carry a smaller and manageable amount, and leaving large bills for later when you have accumulated the necessary amount to do so.
Keep impulse spending to a minimum
Ever heard of the word “instant gratification?” That’s what impulse buying thrives on. Impulse buying is a spur of the moment spending, and they usually simmer down after some time has passed. Unlike emotional spending that is recurring and consistent, impulse spendings are a one-time off, they appear and disappear very quickly following an emotion. If you can minimize impulse spending to a degree, you will significantly improve your chances of paying off bills and loans on time.
Cut out trivial spendings
If you are already living on a budget and find that you’re still struggling to pay bills from time to time, it might be a good idea to go through your list and look for miscellaneous expenditures to cut back on. Can you unsubscribe from your local newspaper and take to online reading instead? Are you paying for that premium gym membership that grants access to different gyms when you’re only using one? Do you have Netflix, Disney+ and CW at the same time? Downsizing hurts, but the pain is only temporary. If you have no use for products that you’ve been paying for in the past, cutting back on them will liberate you from the cycle of unnecessary spending.
Keep tabs on every spending
It goes without saying that when you live on a budget, every dollar bill that goes out needs to be scrutinized and recorded. Some choose to keep an e-record, others jot down their spendings on a physical ledger. Keeping tabs on your bills and spending provides you with a record and overview of your monthly financial performance, and it allows you to tweak and dictate where your cash flow goes.
Maintain your wellbeing
When you’re exhausted, stressed out and faced with a mountain of bills, the stack of papers can quickly deplete your willpower and inhibit your ability to think properly, which is why getting a good rest is paramount to dealing with financial stress. Exercising self-care prevents you from burning out and keeps you trudging in tough times. Small behaviors such as learning not to overeat/undereat, catching sufficient sleep, adhering to a workout regime keeps the mind refreshed and recharged.
Don’t ignore unexpected medical expenditures
Ignoring a health problem and delaying treatment to yourself may result in larger problems in the long run, which translate to more unnecessary expenditure and larger derailing of your ability to foot off your bills. If you have the money to spend for a treatment, do it before it spirals out of control. No amount of health is worth compromising for the sake of money. It’s always better to be safe than sorry.
Count your lucky stars and be thankful for what you have. You don’t need to invalidate nor turn a blind eye to your problems, nor do you need to beat yourself up for struggling financially either; You just need to be thankful for opportunities that you have, and when you start to take note of the blessings that you have in life, you will remind yourself that not all is lost. Gratuity has the unspoken magic of keeping our spirits lifted and pushing us forward to meet our goals. It reminds us that being alive, feeling emotions, even struggling is a blessing in itself. To be human is to feel the full range of human activity. Never forget that.
Go easy on yourself
Unexpected spendings, unforeseen situations may sometimes derail your progress to pay off your bills. Practice self-compassion and empathy, and allow yourself the same kindness that you would show to a loved one or a friend who is financially struggling. More importantly, understand that debts and loans take a while to pay off. It’s not an overnight progress that is resolved through a big lump sum, but small, incremental amounts that help you get to your destination.
The tough gets going…
With all the recent negativity that has impacted everyone, we would like to dedicate a line by the famous Singaporean comedian Ra-Ra-Kumar that perfectly sums up our sentiments about hardships (financial stress problems included) and life. It goes like this…
“In life, if you have a family that loves you, a few good friends, food on the table, roof over your head, you are richer than you think. God bless.”