Lately, many Americans have been stressing about their money situation. Given the rising cost of gas and groceries, skyrocketing inflation, and rising unemployment, budgets have been stretched to the breaking point and it’s no wonder so many are feeling anxious about the state of their finances. Put simply, American workers are struggling with their financial health. Indeed, 51% of US adults report money/finances as their top source of stress in life.1
Though you may be feeling the heat in your wallet, you may not realize how money stress can cast a big shadow over every other aspect of your life. A whopping 76% of Americans say not needing to worry about money/being comfortable in retirement is essential or very important to their well-being.2 But a recent Guardian Workplace Benefits Study, Facing Financial Fragility™, reports that 55% of Americans said they faced financial challenges in the past year.3 In fact, the top drivers of stress for American workers were all linked to finances.
It’s clear that decreasing your financial stress can go a long way toward helping improve your overall well-being. So, what can help to ease tensions and calm fears? Developing good financial habits. Think of it like building up muscle. The more regularly you exercise, the faster you get in shape. If you make practicing good money habits routine, you can quickly start to improve your financial outlook. Here are eight confidence-boosting ways to flex your financial muscles.
Knowledge is power. Pursuing a financial education does not mean going back to school for a degree; it’s often as simple as exploring quality online resources, attending personal finance webinars, using online budgeting tools, or working with a financial professional.
Live within your means. Splurging on travel, tickets, dinners, and clothing without a second thought may give you momentary pleasure, but the inevitable sky-high credit card bills can also give you a long-term headache. Clamp down on overspending, keep up with monthly expenses, and budget and save for big purchases. This is a healthy attitude toward money and helps set a strong financial foundation.
Build a written comprehensive plan. Financial strategy can play a major role in how confident and prepared individuals feel for their future — and the more comprehensive it is, the better. Take time to lay out specific goals, as well as to consider the role of life insurance and account for the cost of health care in retirement. Update your plan as your priorities and situations evolve.
Embrace long-term thinking. Financially confident individuals often understand that building wealth is a marathon, not a sprint. Thinking long-term not only helps train your habits toward delayed gratification, but it can also help mitigate stress when the stock market tumbles and surges.
Explore digital tools. Investigating digital tools like personalized budgeting software or an online banking app may help you develop a financial strategy. Especially if you’re just starting out, you'll begin to grasp the best practices you need for financial confidence.
Balance protection and investment products. Consider a mixture of protection and growth financial solutions to help meet your needs and provide you with greater confidence.
Offload your financial stress to a financial professional. Instead of trying to become an expert in all things financial yourself, consider cultivating a strategic relationship with a financial professional. Let them bear the burden of understanding (and then explaining) new products, changes in laws, and mapping out a set of achievable goals.
Build savings. Many individuals get more satisfaction from saving and investing their extra money than from spending it. Feeling confident with your nest egg may be well worth some short-term sacrifices.
Money can’t buy happiness, but acknowledgement of your financial situation and steps toward educating yourself can set a strong foundation. Long-term planning, knowledge of financial concepts, and knowing where to turn for financial guidance are all often correlated with happier and more financially confident individuals.
As you consider incorporating these eight behaviors into your daily practice, don't forget to go straight to the source. Check with your employer to find out what financial benefits are available to you right now. They may be more easily accessible than you think!