Financial stress can stem from factors like pay cuts, job loss, insufficient salary, mounting debt, unpaid bills, poor spending habits and many other similar concerns which may arise independently but could also be intertwined. The many causes of financial stress not only affect your financial goals, but also your health and well-being. In fact, financial stress can cause you to feel anxiety, depression, lose sleep, gain weight and so on. While it may not be possible to control the factors that cause the onset of stress, the faster you address it and take action, the better for your own health and well-being. So in that case, here’s what you need to remember to understand and subsequently handle financial stress that you may be feeling. 

Identify your stressors and prioritise your action: 

The first thing you need to do is identify what is causing you stress with respect to your finances. Most times you will encounter several stressors, with some being fundamental and others resulting from those; for example, the loss of your job may be a fundamental stressor, but a lack of a steady income will affect your ability to pay off any loans you have taken, thereby adding to your anxiety. So once you identify your stressors, prioritise them on the basis of both their significance and how directly you can act on them. Here it is good to keep in mind that when people are faced with multiple back-to-back decisions that are testing, their willpower can easily deteriorate. So once you prioritise your stressors, space out how you decide to act on them instead of trying to solve everything at once.

Develop a comprehensive financial plan:

In general, the process of financial planning involves preparing a comprehensive budget for how to use your funds towards ensuring the long-term security and well-being of you and your loved ones. So then, since we are talking about financial stress and how it affects both your sense of security and feeling of well-being, the best way to start acting on it is to develop a financial plan. If you already have a plan, see how it can be changed to incorporate your current state of affairs. The process of financial planning can be cumbersome, especially given the complexity added by your current situation. In that case, the best thing to do is seek outside counsel, and work with a certified and experienced financial planner or wealth management firm. They will be able to help in charting out your most optimal course of action. 

Maintain an emergency fund:

Maintaining an emergency fund can be extremely helpful when it comes to overcoming a contingency; like an accident, job loss, unexpected bills, etc. More often than not, financial stress is caused by the effects of such contingencies. By maintaining an emergency fund of 3-6 times your monthly expenses – including groceries, EMIs, and other utilities – can give you some breathing room when it comes to devising your plan of action. 

 Resist temptations and don’t use credit:

Just as important as it is to develop a strategy to overcome your stress, it is also essential that you manage your temptations to spend. Try not to make impulsive decisions, and reduce costs through all means possible. Try not to ignore EMIs and other stipulated payments as this will just add to the problem over time. At the same time, steer clear of credit and find more efficient means to draw the income you need to get through this period. Using credit to address issues created by credit – or the lack thereof in the case of unnecessary expenditure – is like fighting fire with fire; in the end it will only make matters worse. 

Finally, remember to stay positive and continue working towards making the required changes no matter how hard it can be. Always track your progress at particular intervals to see if and how things have changed.