Mental illness impedes an individual’s ability to manage emotions, relationships, and decision-making effectively, and it may interfere with saving money, paying bills on time, or overcoming financial challenges.
Many people experience financial anxiety. Their concerns center around meeting daily expenses, their credit score and having enough emergency savings for unexpected challenges in life.
1. Develop a Budget
An effective budget helps you understand where your money is going, whether that be fixed expenses like rent and utilities or variable costs like food and entertainment. In order to balance it properly, either reduce expenses or increase income may need to change in order to balance it properly.
Budgeting provides an opportunity to set financial goals. Short-term goals may include saving an emergency fund or paying down debt; long-term goals could include saving for retirement or purchasing a house.
Consider breaking your expenses down into two distinct categories to help distinguish needs from wants. For instance, having two bank accounts might help make this easier – one for fixed expenses, and another for discretionary spending – thus helping avoid debt accumulation and fees that might otherwise derail your budget. You could even set up automatic payments on certain bills to ensure timely payment each month.
2. Set Financial Goals
Setting financial goals is essential to feeling in control. Setting targets will keep your spending under control, help create an emergency fund or even help save for retirement.
Setting short and long-term financial goals is an effective strategy to both improve mental health and achieve financial security. Your goals should be specific, measurable and time-bound while having strong motivation behind them – for instance rather than saying you want “to get richer”, try “paying off all credit card debt”.
When setting financial goals, it’s essential to remember that things may not go as expected. After being laid off, finding employment typically takes nine months on average. Therefore, Williams advises setting realistic expectations of your own financial situation without comparing yourself with others; and finding an accountability partner or group who share similar financial and mental health goals who you can discuss these concerns with.
3. Pay Off Debts
Financial issues are an enormous source of anxiety among Americans. Bankrate and Psych Central conducted a recent survey wherein 70% of participants noted money issues as one of their primary sources.
However, an effective financial plan extends beyond paying off debt and saving money; an emergency savings account should also be established just in case something unexpected comes up.
With an emergency savings cushion in place, it may help avoid having to resort to credit cards or loans that involve additional interest payments and could add further stress and tension in your situation.
At the end of the day, it is your decision how best to balance your priorities and come up with an approach that best meets your needs. Debt snowball or avalanche methods may work well to pay down debt while also setting aside savings for emergencies or unexpected costs – you should eventually find an equilibrium that will allow you to enjoy life more while feeling secure about finances.
4. Save Money
Nothing makes you feel financially healthy like having a stash of cash available when something unexpected arises. Tracking your spending over an extended period using an app or notebook can help you see where your money goes and determine where you need to cut back and save more.
As well, it is also crucial that you keep your family updated on your financial situation and enlist their assistance. When they recognize that stress levels are rising, they can make an effort to help find solutions.
Managed finances and mental health can be challenging, yet balancing both can be achieved. If you are struggling, see a financial therapist to assist in working through any difficulties and creating an action plan for success. You could also consult the American Psychological Association’s online Psychologist Locator in search of someone near you who specializes in helping individuals deal with financial hardships.