March 4, 2022

Take Back Your Finances [Financial Wellness Tips, Tricks, And Truths]

BrightUp
Oct 2, 2022
16
Minutes

Got money on your mind? You’re not alone. Financial wellness is becoming more and more important in the holistic wellness movement.

That’s because money is the #1 worry for most Americans, even above career, family, or physical health.

So, alongside nutritionists and yogis, you’ll find finance influencers and FinTech companies filling your social media feed with financial wellness tips and tricks.

So what does it mean to be financially well? The U.S. Consumer Financial Protection Bureau defines financial well-being as “a state of being wherein a person can fully meet current and ongoing financial obligations, can feel secure in their financial future, and can make choices that allow enjoyment of life”.

In their survey about financial wellness, researchers were able to identify four main elements that demonstrate where you are on the scale of financial health.

4 elements of financial well-being according to the Consumer Financial Protection Bureau:

  • Control over your day-to-day, month-to-month finances
  • Capacity to absorb a financial shock
  • On track to meet your financial goals
  • Financial freedom to make choices to enjoy life

The unfortunate reality is that not many people are able to take care of present financial obligations, handle a financial emergency, plan and achieve future financial goals, and still have expendable income for fun. A 2022 survey shows that 49% of Americans feel that their debt is unmanageable. Many others reported they believe they’d have to make at least $122,000 a year to feel financially healthy.

While that may feel out of reach, reducing your financial stress and getting ahold of your finances isn’t!

You’re worth investing time and effort to relieve yourself from financial stressors. To do so, you must understand how financial stress impacts your daily life, over come the pressure, and become more confident in your ability to manage your finances. In the meantime, practice mindfulness with your money.

It’s the first step toward overcoming the pressure and freeing your mind from worries so you can focus on learning how to improve financial wellness.

Let’s get into it!

Financial Stress Impacts Daily Life

In a world that runs on currency, financial well-being can quickly become a top stressor in anyone’s daily life.

A little bit of stress can sometimes be motivating. For example, say your dishwasher broke, and you don’t have enough money in savings for a replacement. The stress may cause you to start freelance writing to cover the costs.

In this way, a small amount of stress inspired you to take something you love to do and turn it into a source of income.

On the flipside, prolonged stress can quickly turn unhealthy. If you struggle to cover your cost of living each paycheck, your levels of stress can worsen. Stress causes the release of chemicals – like cortisol – that can negatively affect the body and the mind.

Daily stress can impact your life in three major areas:

  1. Your mood
  2. Your physical health
  3. Your relationships

Understanding the impact of stress can help you set a benchmark to look back on during your journey toward financial freedom. So keep reading to learn more about the effects of money and stress, and to discover actionable solutions and a clear path forward.

1. Increased Levels of Anxiety & Depression

There’s no question – finances make people feel “stressy and depressy”. But being in a state of stress can be vastly different from clinical anxiety and depression. So when does it cross the threshold?

Stress can be triggered by a specific unfavorable situation. However, anxiety is more closely associated with consistent worrying, even if there isn’t a particular trigger or cause. For example, financial stress can become anxiety if a person still feels overwhelming worry about their financial situation even when there isn’t any financial emergency.

Chronic financial stress can also incite depression. Depression is often paired with feelings of hopelessness and isolation. When an individual does not feel that there is any chance of recovering from a situation financially, it’s easy to become depressed about their outlook.

Isolation occurs due to feeling like you don’t have enough money to do anything or that you should be ashamed of your financial situation.

Emotional Symptoms of Stress include:

  • Irritability/Anger
  • Nervousness/Anxiety
  • Lack of Interest
  • Fatigue
  • Overwhelm
  • Depression/Sadness

Studies show that there is even an increased risk of suicide among those in extreme financial distress. Debt levels can become unmanageable, and stress is made even worse by creditors calling you constantly, having your utilities cut off, or facing bankruptcy.

A 2020 study reported that people who have recently experienced severe financial strain may have a 20-fold higher risk of attempting suicide than those who have not encountered financial hardship.

It’s clear – financial stress can become serious quickly. But that isn’t always the case. Financial stress can also cause a slow erosion of health over time. Especially when it comes to your physical health.

2. Physical Signs of Financial Stress

One of the results of financial stress is not taking care of oneself in other areas of life. The United States of Stress 2019, a research project by Everyday Health, reported that 65% of women and 49% of men said they’d put their needs last when stressed. That includes taking care of their own health.

Prolonged stress can take a severe toll on the body, mind, and soul. Mentally, chronic stress can damage neural pathways and skew judgment. Physically, it causes inflammation which can compromise your immune system and lead to health issues.

Chronic stress from financial difficulty can lead to:

  • Insomnia or loss of sleep
  • Weight gain or loss
  • Headaches
  • Gastrointestinal issues
  • High blood pressure
  • Heart disease
  • Unhealthy coping mechanisms
  • Self-neglect

Financial Wellness Truth: Proof in Financial Intervention

There’s no better example of the power finances have over your health and wellness than the study of financial toxicity and financial intervention in medical patients. Financial toxicity refers to the problems a patient faces related to the cost of medical care. Financial toxicity (FT) has been linked to increased mortality rates.

However, studies show that financial intervention can be a game-changer for individuals facing health problems.

The Levine Cancer Institute conducted a pilot study focused on financial toxicity and intervention for cancer patients. The study focused on 105 patients with high-risk hematologic malignancies or bone marrow failure syndrome. These patients are thought to be highly vulnerable to financial toxicity because of the high cost of treatment and healthcare.

During the study, the mortality rate of the group of  patients who received an intervention decreased to 27%. In comparison, the mortality rate of those who did not receive intervention remained at 43%. Furthermore, 12 months after the study was completed, 73% of the intervention group survived, in contrast to 46.4% of the control group.  

This story is just one of many incredible examples of the impact of financial well-being on an individual’s overall health.

3. Strained Professional & Personal Relationships

Beyond the individual, financial stress can harm people surrounding the stressed person. It can significantly strain an individual’s professional and personal relationships.

An American Institute of Certified Public Accountants (AICPA) survey notes that nearly half of American couples experiencing financial tension admit that it’s had a negative impact on intimacy with their partner. This issue is intensified if the household has children.

Furthermore, employees with financial stress exhibit difficulty focusing and showing up to work on time. A stressed employee may be in danger of termination if they cannot complete their work.

Don’t let financial stress cause stress in other areas of your life. It’s time to take back control of your finances and start down the path of financial freedom.

How to Improve Financial Wellness

Make no mistake, overcoming financial stress and working toward financial well-being is no simple task. It requires constant positive self-talk and determination. But the freedom you can feel when you shed that stress is worth every ounce of perseverance.

To overcome the financial challenges you face, you have to change your daily life. Its apparent financial stress affects your thoughts and behaviors.

So start there. Make a change in how you think about money and how you behave with money.

Here are a few of our best financial wellness tips.

Understand You’re Not Alone

To overcome financial stress, you need to remember one fundamental truth: you are not alone!

Renowned American researcher Brené Brown says: “What we don’t need in the midst of a struggle is shame for being human,” and that “Shame corrodes the very part of us that believes we are capable of change.”

Money is the most significant source of stress for Americans, even more so than personal relationships and career stress. Realizing that you’re not the only person facing these challenges is the first step to shedding the sense of shame you may be feeling.

Don’t let shame hold you back from prioritizing your well-being. An improved sense of self-esteem can considerably impact your ability to overcome the challenges you face.

Seeking Financial Therapy

For many, finances can become a source of trauma for individuals who grew up in low-income households. People grow up watching their parents scrounge up change to pay for family meals or stress out about being denied a loan. As a result, your relationship with money may be damaged.

The Financial Therapy Association defines financial therapy as a specialized form of therapy that combines “therapeutic and financial [skills] that help people think, feel, communicate, and behave differently with money to improve overall well-being”.

Financial therapy integrates cognitive, emotional, behavioral, relational, and economic aspects of well-being to help individuals overcome their struggles with managing money. It focuses on deep-rooted mental perceptions of money rather than just the surface-level habits and behaviors you’ve built up over time.

If you’ve attempted to manage your financial wellness with behavioral changes before and didn’t achieve the results you wanted, you may need to dig deeper. A financial therapist can help you look inward to better understand your unique relationship with money.

Fix Your Money Mindset

Your money mindset is your overarching attitude about your finances. Taking control of your money mindset is the key to later taking control of your financial decision-making. If you can change your mindset about money, you’re more likely to make good choices when facing a financial challenge.

The power of positive thinking is real! Use it to your advantage. For example, when you move from a scarcity mindset to an abundance mindset, you change what you believe the outcome of every financial situation will be.

Here are a few tips for making it happen.

Nourish Your Mind

Knowledge is power. When you feed your brain with information that can empower you in your financial decision-making, you’ll feel more confident that you’re making the right choices.

You’ve already taken the first step by seeking out how to improve financial wellness. Read more books, find more articles, listen to more podcasts – find financial education resources in whatever form you learn from the best.

Practice Mindfulness

The truth is, no matter how financially stable you are, you’ll always be faced with unexpected challenges. The trick is to approach each situation with a calm and clear head.

Allowing your emotions to guide your decision-making can cause you to make rash decisions. Those decisions may make you feel better in the immediate but not solve the problem in the long run.

Mindfulness is about slowing down your body and mind to allow yourself to fully explore all elements of a situation. An article in Psychology Today lists 3 specific ways that scientists define mindfulness:

  1. Mindfulness is not taking things for granted.
  2. Mindfulness is living in the present and being in the moment.
  3. Mindfulness is making a conscious effort to maintain an attitude of openness, acceptance, and curiosity.

Here are a few tips to achieve mindfulness when it comes to money:  

  • Notice how you’re feeling in the present moment. When faced with a financial challenge, does your heart rate increase? Do your shoulders begin to rise toward your ears? These can be signals that you’re not in the right state of mind to make a decision. Don’t judge these feelings. Just let them exist.
  • Ask yourself why you’re feeling this way. Is the situation a real problem, or are you carrying the weight of previous mistakes? Examining the situation closer can lower the stakes.
  • Don’t act until you feel confident. When you know you’ve taken the time to consider your options with a clear head, you’re more likely to make the right choice. If you already have goals in mind, make sure your choice is aligned.
  • Visualize your goal. Visualization is a meaningful method of meditation. When you can see yourself achieving a goal, your mind can become more focused on the tasks that will lead to your goals.

Here’s a great resource from the mindfulness experts at Headspace about Money Mindfulness.

Express Gratitude

Research shows that gratitude can have an immensely positive impact on our lives. It boosts physical and mental health, increases productivity, and improves decision-making – all of which can contribute to your financial well-being.

A team of researchers from Northeastern University, the University of California, Riverside, and Harvard Kennedy School found that gratitude can make you more patient with your money. Participants were asked to choose between receiving $54 immediately or $80 in 30 days. Before being asked to make this choice, participants were assigned to three different conditions.

In response, they wrote about an event from their past that made them feel grateful, happy, or neutral. Participants who felt grateful were more likely to show patience and wait for the money.

With each paycheck, take a moment to express gratitude. With every deposit into your emergency savings, give yourself a pat on the back for your progress. Celebrating the most minor victories can make the more significant challenges seem smaller.

Build Better Habits

Empowering your mind is the first step to financial freedom. The second is building better habits. Then, with a newfound confidence in controlling your mental state, you can set specific goals and begin changing your actions to achieve those goals.  

Set Incremental Goals

Setting smaller, incremental goals can make working toward financial wellness easier and more fulfilling. For example, when you can express your gratitude for your accomplishments more frequently, it only adds fuel to the fire. A goal can be as simple as opening a savings account and setting up a $20 automatic transfer or as big as paying off your car loan.

Follow a Budget

A budget can be one of the most effective ways to achieve your financial goals. Creating a budget empowers you to set specific goals and create an action plan to achieve those goals. It also serves as a great north star when practicing money mindfulness. If a financial choice doesn’t align with your goals and budget, you can confidently say “no”.

Steps to Creating a Budget:

  1. Calculate your monthly income
  2. Add up your monthly expenses
  3. Choose a budgeting plan (Here are a few we recommend: Zero-Based Budgeting, 50/30/20 Rule, Envelope System)
  4. Make adjustments to your spending
  5. Review and revise as needed

Many financial planning tools can help you with your budgeting, including the BrightUp app! With the right financial management app, you can save for goals, automate your budget, track your net worth, learn about wealth-building, and more.

Automate Your Finances

The average number of days it takes to form a habit is 66. For some, it could take over 200 days to do so. While building a budget and saving money takes a lot of discipline, the long-term rewards are more than worth the time it takes to adjust your daily thinking and actions around money.

There’s no better way to build a habit than to leverage technology that does it for you! Automating your finances can include:

  • Using online bill pay to make sure you never miss a utility or credit card payment
  • Setting up an automatic transfer to your savings account each time you get paid
  • Creating limits on your cards to keep you from spending beyond your budget in certain categories
  • Using a phone app to track your budget and analyze your spending

Get Out of Debt

Debt is the most significant barrier to financial freedom for most Americans. According to Debt.org, consumer debt reached $14.56 trillion at the end of 2020. Debt can cripple any well-intentioned financial plan, but it’s not impossible to tackle.

When you sit down to work on your budget, debt should be your main focus when setting goals and allocating your income. And while there’s no silver bullet to paying down debt, there are a few surefire ways to help.

Habits that help:

  • Pay more than your minimum required payments
  • Pay more than once a month
  • Pay off your most expensive loan first
  • Consider the snowball method of paying off debt

Products that help:

Paying down your debt could be the greatest gift you could give yourself. It won’t be easy, but it’s the best way to free up money you can use to start growing your personal wealth. Even if you don’t have great credit, there are lenders like BrightUp who use alternative underwriting systems to give borrowers greater access to reasonable rates.

Find a Mentor

When all else fails – look to an expert. Sometimes the best encouragement can come from an outside source, especially if you’re having trouble overcoming a negative money mindset. Finding a financial coach, therapist, or mentor who can provide personalized advice judgment-free can make or break your path to financial well-being.

Financial Coaching

The Consumer Financial Protection Bureau launched a pilot Financial Coaching Initiative in 2015 to measure the impact of one-to-one financial coaching on financial well-being. 57% of participants saw their financial capability score increase during coaching. Additional evaluations found meaningful improvements in clients’ savings balances, debt levels, and credit scores.

Through BrightUp, employees of participating organizations can receive free, personalized financial coaching from experts who approach advising with empathy and compassion. So whether you need to text a quick question or have a regularly scheduled call with your coach, you have people on your side. (Share a link with your employer if your organization doesn’t participate!)

Find a Financial Influencer

If you don’t have access to free financial coaching and don’t have room in your budget to pay for one, it’s time to take to the world wide web! As financial wellness becomes more and more critical, more and more financial wellness experts are turning to the internet to share their advice and insights. Find an expert that speaks to your unique situation – someone who makes you feel seen and heard.

Here are a few we recommend:

Delyanne – @DelyanneTheMoneyCoach

Delyanne is a money mentor who focuses on easy-to-understand financial education and empowering individuals to learn how to invest.

Dasha Kennedy – @TheBrokeBlackGirl

Dasha is a financial activist focused on helping women tackle debt and build wealth. She helps women get back to basics when it comes to financial literacy. If you need to develop skills before you build your wealth, Dasha is a great expert to follow.

Tiffany Aliche – @TheBudgetNista

Tiffany is a financial educator who serves up bite-sized financial advice in a relatable way. She shares budget hacks, home buying tips, and practical challenges to help you approach your financial well-being with mindfulness.

Ramit Sethi – IWillTeachYouToBeRich.com

Rather than providing financial advice for saving money, Rami approaches financial education with the mindset of earning more. He tackles the psychology of money and wealth-building topics like investing, negotiating salary, and entrepreneurship.

Seek Assistance from Your Employer

More and more, employers recognize their responsibility in ensuring financial stability and literacy for their employees. As a result, employee benefits administrators are rolling out new programs centered around financial wellness for employees.

Ask your human resources department if your company can offer any financial assistance through financial education, financial planning tools, or compassionate capital options.

Start with BrightUp

Our best and biggest financial wellness tip? Find a financial wellness program that works for you and BE PATIENT! You deserve all the time and effort it takes to get out of debt and build your wealth.

If your company doesn’t currently offer a financial wellness program, talk to your leadership team and tell them about BrightUp!

Was this helpful? You might also like: