Financial Freedom Matters: Money Impacts Americans' Mental Health - 8 Steps To Financial Security

    Bash Sarmiento November 16, 2022

    It's no secret that money can be a major source of stress in a person's life. But did you know that it can also have a significant impact on your mental health? According to a recent study, an estimated 32% of Americans say that their financial situation is their top stressor, causing them anxiety or depression. But in fact, the relationship between stress and financial security is also a vicious cycle: financial insecurity can lead to mental health issues, which in turn can make it difficult to manage money.

    If you're struggling with your mental health and finances, here are a few steps you can take to begin creating a more stable and secure financial situation:

    1. Identify your financial goals.

    Begin by creating a list of your financial goals. What do you expect to achieve in the short term and long term? Do you want to pay off debt, save for retirement, or build up your emergency fund? Having specific goals will help you create a plan to achieve them. Often, creating goals also helps to boost your motivation and confidence.

     

    2. Track your spending.

    To make progress toward your financial goals, you need to have a clear idea of where your money is going each month. Track your spending for at least a month so that you can get an accurate picture of where your money is being spent. This will help you identify the areas that you should focus on as well as any areas that you may be overspending.

     

    3. Set a budget and stick to it.

    This may seem like an obvious step, but it's important to take a close look at your income and expenses to create a realistic budget. A budget will help you track your income and expenses so you can make informed decisions about how to best use your money. When you're aware of where your money is going, you can make adjustments to ensure that your spending aligns with your goals and values. 

    It is important to stick to your budget and not overspend, but keep in mind that a budget is a guideline, not a law. There will be months when you spend more or less than you had anticipated. You can use a budgeting app or spreadsheet to effectively manage your spending. The goal is to stick to your budget as closely as possible so that you can meet your financial goals.

     

    4. Live below your means.

    One of the most important aspects of good financial management is learning to live below your means. Just because you can afford to buy expensive stuff or things you don’t really need, it doesn't mean that you should! When you're able to control your spending, you'll be in a better position to save money and reach your financial goals.

     

    5. Build an emergency fund.

    Unexpected expenses can wreak havoc on your finances, so it's important to have a cushion of savings to fall back on. Start small by setting aside a few hundred dollars, and then gradually increase the amount you're saving each month.  A good rule of thumb is to have at least three to six months' worth of living expenses saved so that you're prepared for anything.

     

    6. Invest in yourself.

    Investing in your education and development is one of the best things you can do for your career and earnings potential. Consider taking courses or attending workshops to learn new skills that can help you earn more money. Pursuing a degree or certification can also lead to greater job security, which can in turn reduce stress levels.

     

    7. Secure your accounts.

    In today's digital world, managing your finances has become more accessible through online accounts, mobile apps, digital wallets, and more fintech solutions. However, this also means that you are at a higher risk of mobile device security threats, malware infection, and cybersecurity attacks!

    Thus, it is important to secure your accounts to protect your financial information. You can begin by using strong passwords and two-factor authentication. Another way to secure your account is to regularly review your account activity and report any suspicious activity to your financial institution immediately.

     

    8. Don't be afraid to get help.

    If you're struggling to manage your finances on your own, seek out the help of a qualified professional. A financial planner can assist you in creating a budget, setting a goal, and investing for the future. Plus, a financial planner can provide much-needed motivation and support to help you stay on track.

    At the same time, if stress and anxiety about money are impacting your mental health, consider seeking out therapy. A therapist can help you develop healthy coping mechanisms and address any underlying issues that may be contributing to your financial insecurity.

     

    Final Word

    Financial success doesn't happen by accident—it takes careful planning and execution. Taking these steps can help you break the cycle of stress and financial insecurity, and begin working towards a more stable and secure future with the ultimate goal of financial freedom.

     

    Bash Sarmiento 2Author bio: Bash Sarmiento is a writer and an educator from Manila. He writes laconic pieces in the education, lifestyle, and health realms. His academic background and extensive experience in teaching, textbook evaluation, business management, and traveling are translated into his works.

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