About half of the participants in a recent survey described financial security as not having to worry about day-to-day expenses.1 Unfortunately, the study revealed that 85 percent of Americans suffer from anxiety over their financial situation, especially how they would pay for an emergency expense. Sixty-seven percent believe financial stress affects their health, 61 percent admit it impacts their home life and more than half say it affects their social life.2
Another survey found that half of respondents were living paycheck to paycheck.3 It didn’t matter how much they earned; they all experienced relatively the same degree of financial stress. Even people earning more than $100,000 said they had a hard time putting money away for the future.4
Consider the following tips to help mitigate financial anxiety:
- Create a budget to help keep track of incoming funds and outgoing expenses.
- Establish a list of financial priorities for your discretionary income.
- Develop a three-to-six month budget plan that includes larger, intermittent bills throughout the year, such as car and homeowner insurance and property taxes. Plug these line items into your master budget so you’ll know to apply discretionary income to those bills.
- Stop ongoing expenses that you don’t use, such as a gym membership or subscriptions.
- If you’re paying down revolving debt, consider ending your use of credit cards altogether.
- Set specific financial goals, such as how much money you want to have saved by retirement. Then regularly save a fixed amount toward that goal.
- Downsize your home or car for lower payments, insurance, taxes and maintenance bills.
A lot of financial stress can be alleviated by creating a strategy; simply taking proactive control of a situation can be very empowering. Once you’ve tasted relief, explore ways to create that sense of release more often. Physical exercise, such as walking, swimming or biking regularly can help.
Also consider taking classes where you engage in social activity with new people, such as yoga, tai chi, pottery or painting. While you don’t want to spend a lot of money on a new hobby, social interaction that enriches your life can do wonders for stress.
You’ll come to appreciate that some of the finer things in life don’t necessarily cost all that much.
1 Kim Blanton. Center for Retirement Research at Boston College. July 14, 2016. “Financial Anxiety Amid Economic Growth.” http://squaredawayblog.bc.edu/squared-away/financial-anxiety-amid-economic-growth/. Accessed Feb. 8, 2017.
3 Kim Blanton. Center for Retirement Research at Boston College. Jan. 12, 2017. “Financial Stress Rings in the New Year.” http://squaredawayblog.bc.edu/squared-away/financial-stress-rings-in-the-new-year/. Accessed Feb. 8, 2017.
Content prepared by Kara Stefan Communications & Advisors Excel. We are an independent firm helping individuals create retirement strategies using a variety of insurance products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic retirement income strategies and should not be construed as financial advice.
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