I recently sat across the table from a young lady who at only 19 years old, felt hopeless that she would be able to retire. Her parents in their late 50’s and early 60’s was doubtful that they would retire. They expected to work until the day they died. She said it was all political and she would never save enough money to enjoy life. My generation is in trouble, she said with a big sigh.
Her outlook about retirement made me quite sad. The fact that she believed she would never have enough money to retire raised questions regarding the financial future of Millennials (born between 1981 and 1996) and Generation Z-ers (born between 1997 and 2012). At her young age, she was already experiencing financial stress.
What is Financial Stress
Financial stress is the tension and anxiety that comes from financial uncertainty or difficulty combined with the fear of not having enough money to pay bills and put food on the table.
Financial stress comes from unpaid debt, unemployment/underemployment, economic difficulties and increased financial responsibilities. Additional stressors are unexpected expenses, lack of an emergency fund, limited savings, and a pessimistic outlook on financial security in retirement.
Financial stress can occur at any age, with any gender and is found across the world.
Symptoms of Financial Stress
Financial stress can impact four areas of health: physical, mental, emotional, and spiritual. It is important to understand the signs and symptoms so you can take corrective action to improve your financial wellbeing.
- Changes in appetite: Either increased or decreased eating habits
- Difficulty sleeping: Poor sleep that impacts which in turn impacts decisions making
- Anxiety: Worrying about finances
- Depression: Hopelessness or helplessness over money
- Physical illness: Body aches and pain, headaches, nausea
- Lack of self-care: In stressful times, self-care can fall to the bottom of the priority list.
- Social isolation: Because of shame and embarrassment you stop seeing friends and family
- Anger: At everything and anything
Grief and Financial Stress
Many times, the death of a loved one financially impacts those left behind. Their passing may leave the family without a primary breadwinner, or the cost of a funeral may set the family back financially. Outstanding debts, and legal issues can quickly escalate, creating an unexpected financial burden.
This adds to the already emotional journey. Coping with grief is daunting and when it is coupled with financial worries, it becomes even more challenging. Working with a specialist in grief will help you better understand the emotional aspects of your loss and the stress that it brings. A good specialist will address all areas of your life, including financial wellbeing.
How to Deal with Financial Stress
- Gain a full understanding of your financial picture. Some people call this keeping track of your money, others call it a financial inventory to avoid the use of the word budget. They say that the word budget is too restrictive. I use the word budget because you decide, in advance, where you spend your money and how much you spend on each particular item. Budgets can be freeing because you can see where excess money is being spent so cutbacks can be made, funds reallocated, and money saved.
- Set financial goals. If you truly want to get out of debt, set a goal for when you want to be debt free.
- Cut up credit cards. Stop using them. Interest rates on credit cards range from 18% to 25% or more. For every 100 dollars remaining on your balance, 25 dollars are added to your balance. Consider opening a new credit card that has a balance transfer with zero percent interest. Transfer your balance and do not use the card for any new purchases. The goal is to pay off the balance.
- Practice stress management with exercise, deep breathing. Participate in activities that help you rest and relax that don’t cost money. Read, walk, or invest your time into hobbies.
- Review your progress on a regular basis. Update your budget to see if you are on track, at least weekly.
- Educate yourself on financial wellbeing by attending free classes, books, non-profit organizations, and videos. There is a plethora of resources available.
- Work with a professional to help guide and direct you. They are experts in their field.
- Avoid unhealthy coping mechanisms. Stay away from substances or behaviors that temporarily relieve stress but cause long-term harm.
- Plan for the long term. Every chance that you get, set aside money for retirement. Contribute to your company 401K plan or whatever retirement plan they offer. Start early, start young. Remember that your investments compound and grow bigger the earlier you invest.
Back to the young lady and her dismal outlook on retirement. Once we discussed that retirement is within her reach by keeping out of debt, saving, and putting money into retirement funds, she felt more optimistic about being able to retire and enjoy life in her later years.
Financial stability is one piece of living well. Reach out to me to learn more about living well.
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