Yahoo Finance 3 ways to beat financial stress
More than half of Aussies are experiencing financial stress, but it doesn't need to be a life sentence.
Financial stress is a persistent nagging voice. It scolds your spending, it worries whether you’ll make it to the next paycheque and it jumps between despair and frustration by wondering if you’ll ever be free from money worries.
If this sounds familiar, you’re not alone. Research tells us almost half of Aussies experience financial stress. And given the rate that prices are rising, that’s not too surprising.
I see the impact of financial stress on people’s lives first-hand. A few years ago, I started a financial-education platform, SkilledSmart, to help adults learn how to manage, save and invest their money. Over the years, we’ve helped hundreds of people fix their finances and beat financial stress.
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The good news is financial stress is not a life sentence. You can create a life of financial peace of mind, and do it without winning the lottery.
Here are three tips to help you get there.
1. Clarify where your money is going
Does this sound familiar? The money comes in, goes out, and you have no idea where it disappears over the course of the month.
A lack of clarity about your outgoings is one of the biggest drivers of financial stress. It creates a feeling of being completely out of control, financially.
The first step is to look through your bank statements and itemise your spending.
This exercise can be confronting but it’s the fastest way to reduce financial stress because once you can identify where your money is going, you can make more intentional financial decisions, and this gives you a feeling of control over your money.
2. Learn how to invest and build wealth
Not having enough wealth is another driver of financial stress.
Think of money as the income you earn, and your wealth as the assets you own - such as property, shares, or your super fund.
Financial security that is dependent on money alone will cause added anxiety - the minute you lose that source of income, you’re in trouble.
But long-term income-producing assets will give you greater financial diversity and, therefore, more financial security.
Having assets means you have a financial backup plan, which is a great way to reduce financial stress.
3. Work on your money mindset
There isn’t a ‘magic number’ that makes financial stress go away. Even millionaires experience financial stress.
Financial stress is not just how much money you have, it's also about how you think and feel about money.
So, one of the first things we do with our students is help them address their emotional and psychological relationship with money.
For example, maybe you experienced financial trauma in your childhood, which continues to create anxiety today. Maybe you’ve made financial mistakes in the past that you’re scared of repeating, giving you a fear-driven relationship with money.
Until you address your money baggage, it will follow you around and continue to create stress, even if you do come into more money or improve your financial situation on paper.
While all of this might sound daunting, the good news is you don’t need a bigger income to start working on any of these tips. You don’t need to wait until you’re earning more money before you can start addressing your financial stress. You can start right now, today.
Paridhi Jain is the founder of SkilledSmart, a financial-education platform helping adults learn to save, manage and invest their money. For more money tips, you can grab a free e-book on 5 Money Mistakes Costing You Thousands via their website, and learn more about their course, Mastering Money.
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