Worrying about money can affect nearly every facet of your life. If you constantly find yourself stressing about how much money you have and how you’re going to pay your bills, you could certainly develop one of several stress-related health conditions. If these conditions go unnoticed, or untreated, it could even result in very serious, sometimes life-threatening illnesses. Research has found that people with high stress levels are more likely to have heart attacks; suffer from insomnia, migraines, anxiety and depression; and have digestive problems. Therefore it is critical to understand what you can do to reduce financial stress in order to have a healthier and happier life.
So why do people get stressed out about money? There are four main reasons -:
• They consistently spend more than they earn and take out loans for trivial things.
• They spend exactly what they make and live from salary to salary with no saving.
• They have to pay for unexpected expenses such as medical treatment for illness, car repair, loss of belongings due to theft and fire.
• They have no goal or financial plan and don’t understand how to manage their finances so they feel completely overwhelmed.
To cope with financial stress you will need to take control of it before it takes control of you. Here are some simple ways to help you do this -:
1/ Talk about your financial worries
At first this may feel uncomfortable, but sharing your fears about your situation can be an important step toward reducing stress levels at home because communicating with your partner will help you to work together to find a solution.
2/ Create some space
Do a quick check of your expenses. Write down your expenses then compare your monthly bills with your income and decide on what expenses can be reduced. The goal is to reorganise your spending so that you give yourself financial space. The more you’re able to live below your means, the better you will feel.
3/ Take care of the unknown
One of the most important ways to feel more financially secure is to have an emergency fund in case of unexpected expenses. Ideally, you want enough savings in your account to cover six months or more of essential living costs.
4/ Set goals
No matter what is causing you financial stress, planning can help you gain control of what happens next. It can also help you prioritise spending and balance competing demands on your money, like saving for retirement and paying for car loans. Make a list of all of the things you want your money to do for you. Then set goals for each that are measurable and final. For example, “I would like to have $5,000 saved by the end of this year to renovate my house next year.”
5/ Take advantage of automation
Automate as much of your financial life as you can, for example have a percentage of your salary be directly deposited into your savings account. You might also consider setting up automatic reminders to alert you when a bill is due, so that you’ll know that your financial priorities are taken care of each month.
6/ Reduce debt
Make a plan to pay off your credit cards as quickly as possible. If you’re carrying balances on more than one card, consider consolidating your debt onto the lowest-interest card possible. Reducing your debt can free up extra cash each month for saving and investing.
7/ Protect what is most valuable
Protecting your family and your assets against unforeseen events is critical to attaining financial security. The proper use of insurance can reduce stress by helping to ensure that you and your loved ones are financially protected no matter what happens.
AIA understands that while your needs may evolve at different stages of life, your desire to protect you and your loved ones will always stay the same. That’s why it is important that you review your policy every now and then to bridge the gap between the protection you have, and the protection you need. To ensure your family is protected against unfortunate events in life such as accident, illness, disability or death, AIA’s life insurance plans can help avoid financial strains should the needs arise. For individuals seeking to protect their health, AIA offers a comprehensive range of health insurance plans ranging from medical, hospitalisation and long term care to critical illness.
This advice on family living is made possible with support from