Financial Depression – Overcome Financial Stress
Depression on its self is one of the most soul-destroying feelings there is. Although it can be managed it is still something that is rife in this day and age.
Globally, more than 264 million people of all ages suffer from depression. Depression is a leading cause of disability worldwide and is a major contributor to the overall global burden of disease.
Many things can cause depression, but one common factor is certainly depression caused by financial issues. Money is the biggest source of stress for Americans, research shows. Indeed, a survey by Northwestern Mutual found that money was the dominant source of stress for 44% of Americans, followed by the 25% who said personal relationships, and 18% blaming work. The above statistics are just for Americans, so imagine what the percentage for the whole world would be?
1. Give yourself some ‘me’ time
It’s all about balance. For example, if you check your bank account everyday knowing full well nothing is due to leave your account that day, then you’re probably thinking about money too much. Instead, why not set aside a specific time every week to examine and discuss your finances.
For example, plan every Tuesday evening to spend some time checking your bank account, paying your bills, reviewing your budget, and talking about money with your partner.
2. Create a Budget
Set yourself ‘X’ amount a day or a week to budget. This will help you keep control of your finances and keep your mind at ease with what you are spending.
3. Pay Off Debt
We’re all guilty of buying items that are maybe slightly unaffordable. For example:
- Furniture / car on finance
- Nights out with friends
- Designer clothes / materialistic items to impress others
However, we must remember that it may make you ‘look wealthier’ but in the long run it can cause you to fall into a ‘financial hole’. A fine example would be someone who spends all their money on a designer outfit, but then has to borrow money to go out and socialise to show it off.
Set aside ‘X’ amount per week or month to help clear any debt. Remember unpaid debt creates more stress and worry.
4. Build an Emergency Fund
Another stress reducer is to have money saved up in an emergency fund in case anything expensive and unexpected happens, like having to replace your boiler or issues with your car or losing your current source of income. Most experts recommend saving at least six months’ worth of living expenses or setting a goal to do so. Make sure this money is put someplace where you can easily access it when needed. Using a savings account that is accessible will allow you to get to the funds if needed and also allows you to earn a little interest on the money.
5. Obtain Multiple Sources of income
Do not rely on one source of income. Doing this potentially leaves you open to stress e.g what if you lose your job? what if you become ill and can no longer work?
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6. Simplify Your Finances
When life becomes overwhelming, simplification is often the solution. In the case of your finances, simplify by combining various accounts. Aim to have one account for your wages, one savings account, and one credit card (if needed). Having only three accounts will calm your worries because it is a lot less to monitor and control.
7. Utilize Direct debits
Instead of waiting for the bill and stress yourself out working out how you are going to pay for the bill, set up a direct debit to pay for that item on the day you get paid.
Your phone bill is £40 a month and comes out once a month. You get paid on the last working day of every month. Set up a direct debit so the £40 goes out on the first of every month. That way you only wait a day or two from pay day to pay the bill therefore the bill is paid before you’ve spent your wages.
8. Understand the Market
You do not have to be a financial expert, or a financial advisor to understand the current financial market. Meeting with your bank manager or financial advisor now and then will help educate you on better savings accounts and better ways to help save money.
9. Cut Out Luxuries
If worrying about money is affecting your life, cut out the things you don’t really need. For example, do you have cable or satellite TV? Cancel cable and stop watching TV. Do you eat out for lunch? Pack a healthy brown bag lunch instead. Do you have an expensive car? Trade it in for something more affordable. Run the numbers and see how much you can save. If you’re saving money, you don’t need to worry so much about it.
For example people may make sarcastic or jokey comments about you having a more economical car. However, you will be the one laughing when you build your savings account.
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