‘I’m always worried’: How to cope with financial stress

For Ellie Alvarado, a teacher and mother of three in Elgin, I’ll., figuring out how to pay the bills has become a source of anxiety and stress, especially when she and Husband argued about how to cut.

“When I said, ‘OK, we can’t buy anything this week, or we’ll go to overdraft’ – he said, ‘No, what are you talking about? We are both working. That shouldn’t have happened,” Ms Alvarado said.

Rising food costs mean no more random trips to McDonald’s. Branded cereals and other small luxuries are gone too. Gas prices, which recently hovered around $5 a gallon, are also eating into their budgets.

“Every time I refill our truck, I am amazed,” said Ms Alvarado, who sometimes sees only $100 in her family’s checking account. “I was always worried,” she added.

Her husband, who works in a factory, decided to work overnight shifts because the hourly wages were higher. But her family is still late in paying the rent.

“I can defer the mortgage by two weeks,” said Ms. Alvarado, 38, who tracks the family’s budget. “But then another two weeks, and suddenly they call you.”

Inflation has hit a 40-year high, forcing many families to earn less. According to data released by the Bureau of Labor Statistics this month, the Consumer Price Index rose 9.1% from a year ago, with some of the biggest price increases for essentials like food, rent and fuel. Increased financial stress can not only make it difficult for a bank account, but it can also bring on feelings of depression, shame, anger, or fear.

A study of older adults published in 2017 found that how a person perceives and responds to financial stress can have an impact on their mental health. People who were upset about their economic situation were more likely to have higher depression scores than those who were also experiencing financial stress but didn’t mind it – even when controlling for other factors. , like health and income.

Fortunately, “there is a lot we can do to manage and overcome that stress and emotion,” said the paper’s lead author, Sarah D. Asebedo, director of the School of Financial Planning at the University of California. Texas School of Technology in Lubbock, Texas. .

We talked to financial experts about how to deal with money worries and had helpful financial conversations with family members.

Reflect on yourself and communicate with empathy

Rick Kahler, a co-founder of the The Financial Therapy Association is collaborating on a book for couples struggling with money.

Instead, Kahler suggests, think about how you react when discussing your finances. What is triggering from your past? What stories or scenarios do you live by when it comes to your finances – for example, the idea that hard work will always lead to rewards?

Approach your partner with empathy and ask, “What are your hopes for spending this money?” Or “What is your fear of cutting this item?” Mr. Kahler said.

Both partners may eventually realize that they want the same thing – for example, each wants what’s best for their family.

Amanda Clayman, a financial therapist in Los Angeles, notes that, when talking about differences, any requests should be specific. So instead of saying, “We need to save more,” say instead, “Find a way to save an extra $200 a month.” And try to use “my words” when possible, such as: “I’m uncomfortable with how much we pay for entertainment subscriptions and wonder if we can cut there or not. are not”.

For this to work, Ms. Clayman added, both partners must feel that their needs are being met and that they have an equal say in the matter, no matter who is more worried or who earns more. more money.

Spend wisely, but don’t completely deprive yourself

Whether you live alone or manage a family’s finances, says Megan McCoy, a licensed marriage and family therapist who teaches courses in financial planning at Kansas State University. When it comes to adults, it’s important to think about goals before attempting to tackle any money problems.

What are you saving for? What do you need to cover with a limited budget? Write it down. Then think about potential cuts – but try to stick to the ones that bring you joy.

Ask yourself: “What can I cut back without negatively impacting my mental health?” Dr. McCoy said. “I think people tend to restrict themselves too harshly.”

For 36-year-old Sarah Davis, essential (but expensive) expenses include mental health therapy and her beloved cat, who has developed health problems.

“He was like my hairy little baby,” she said.

To afford such things, she left Boston, where she worked as a project administrator, and now lives about 25 miles north of Lawrence, Mass. Rents are cheaper there, she said, but still “horribly expensive”.

What kept her up at night was the possibility of a crash, and not knowing how long the price would continue to rise.

Ms Davis, who lives alone with no income to rely on, said: ‘I’m a really bad tire changer to get out of a tight financial situation.

Dr McCoy said: “There’s been so much uncertainty over the past few years that it’s “permanently created anxiety”. But having a plan you’re working on – whether it’s accumulating savings or taking steps to pay down debt – can provide a sense of power and control.

Orly Hersh and her family decided to move in with her mother five years ago, in the house where she grew up in Boulder, Colo. That allowed her mother to age and let them stay in the town they loved. She and her husband are both teachers, so they are not able to become homeowners.

“It’s a huge shared benefit for all of us,” said Mrs. Hersh, 53, a mother of two.

Even though they save money on housing costs, Colorado currently has some of the highest inflation costs in the country, and rising prices have taken a big chunk out of their budget. To pay the bills from their youngest daughter’s recent hospitalization, they will need to put into Mrs Hersh’s pension fund, “which is depressing her,” she said.

However, she added, it’s better for her stress level to pay it off as soon as possible. “I really hate carrying this debt on my head,” she said.

Explore different types of professional help

Meeting a financial advisor can be helpful for anyone looking to become financially savvy. Perhaps, for example, you need budgeting tips or want to learn the basics of investing. If cost is a concern, the Association for Financial Counseling and Planning Education will host a free virtual financial training session for anyone experiencing financial turmoil.

Financial therapy is another form of counseling that can help people understand their thoughts and beliefs about money, especially when they feel stuck.

“The question becomes: What is going on internally? What unfinished business from the past needs to be completed? ‘ Mr. Kahler said.

For example, one of his clients insisted on spending all the money in his checking account. During financial therapy, he realized that he had developed this behavior because he did not trust his money to be safe if he set it aside. This partly stems from his childhood, when his parents took all the money from his savings account after losing their own money in a bankruptcy.

Talking to a financial therapist can help people get to the bottom of their feelings about money and understand long-standing beliefs, which “frees us up to start adopting new behaviors that we don’t want to learn.” we benefit the most,” Mr. Kahler said.

The tough economic outlook means that the rising cost of living is largely out of our control. But if you know you should be making wiser financial decisions, and you’re not, “that’s when we have to take a closer look,” he said.