4 Ways To Manage Financial Stress

By Michelle Lambright Black
Published on: 09/07/2022

Americans are experiencing financial stress from many different angles these days. With U.S. inflation numbers reaching a record high of 9.1% in the summer of 2022, chances are high that you’ve felt financial pressure too. From rising gas and grocery prices to higher rents and declining savings balances, the economic realities that many Americans are facing can start to feel overwhelming.

The good news is that even when funds are tighter than usual, you may be able to find ways to make the situation more manageable. Below are four helpful strategies that could help you cope with the financial stressors you are encountering in your own life.

1. Create a financial action plan

Financial stress can often feel debilitating. Yet one of the best ways to change (and hopefully improve) your situation is to take action.

If you find yourself in an uncomfortable financial spot, Winnie Sun, Managing Director, Sun Group Wealth Partners, offers some simple but powerful advice. Sun says, “Control what you can control.”[1]

Sun gives several examples of actions you can take to try to regain control of a financial situation that is causing you to feel uncomfortable.

  • Do your homework. Next, consider updating your budget worksheet. “Log what you’re spending each month,” Sun says, “and ask yourself, where can I cut back next month?”
  • Cut expenses. You might, for example, consider canceling unnecessary subscriptions, or perhaps staggering the subscriptions that are most important to you. “...if you want both Netflix and Disney+,” Sun says, “have just one for 6 months, cancel, and switch to the next one after that. This will save you money.”
  • Look for discounts. Take the time to review your insurance policies (home owners, car insurance, private medical insurance, etc.) and shop around to make sure you’re getting the best deal that’s available. You might also be able to find savings opportunities in other areas like your mobile phone plan, internet service, and more.
  • Get professional help. Depending on your situation, you might want to think about talking to a financial professional. For example, if you’re considering bankruptcy a conversation with a reputable bankruptcy attorney might be in order. A trustworthy credit counseling agency might be able to offer you potential solutions on how to deal with mounting debt issues as well if you feel unable to manage those challenges on your own.

Tip: If you’ve never created a budget before, these budgeting guides from Self could be a great place to start.

2. Set up automatic payments for important bills

Despite the increased financial pressure you may be under at the moment, now is not the time to neglect paying important bills — especially bills which may impact your credit history and credit score. Late payments have the potential to remain on your credit report for up to seven years.[2] As a result, you may want to consider setting up automatic drafts as a backup for each of your credit obligations.

You probably shouldn’t neglect your credit-building accounts either, like credit builder loans. Doing so might delay or perhaps even set back your progress. Having good credit remains important in the current economic climate — perhaps more so than usual since interest rates and overall borrowing costs have been trending upward in recent months. Good credit, after all, has the potential to save you money on interest rates with future loans, credit cards, and more.

And, of course, you’ll want to stay on top of bills for essential needs like rent and utilities. As an added bonus, you might be able to get credit for your good payment history on these accounts by using a third-party service like Level Credit.

3. Find ways to generate more cash

There’s no question that cutting expenses is important when you’re feeling a financial pinch. But adding more money to your budget could also be an effective way to help combat the financial stress you’re experiencing.

Below are a few potential ways you might be able to generate some extra cash.

  • Consider a side gig or part-time work. Keep in mind that you don’t have to commit to the extra work forever either. For example, you might decide to work a side gig for several months while you’re trying to pay off credit card debt. “When you remember that this is temporary,” says Sun, “you can just work more when you need it.”
  • Talk to your employer. You might consider asking your current employer whether there are any opportunities for growth, raises, or promotions at your current place of employment. “If you don’t ask,” Sun says, “the answer will always be no.”
  • Sell unwanted items. If you’re like most people, you probably have a pile of items lying around your home that you no longer use. So why not sell them to someone else who could benefit from them? Services like Facebook Marketplace, OfferUp, Craigslist, Mercari, eBay, and more can all be easy ways to resell your unwanted items. You can even consider hosting an old-fashioned yard sale or renting a booth at your local flea market if you have a lot of items you want to sell at once.
  • Rent it out. One more out-of-the-box way that you might be able to earn extra money involves renting out rooms or other things you are willing to share with others. For example, Sun says, “some have rented out their garages, an extra parking space, kid’s gear for traveling families, and even their swimming pool.”

4. Get the whole household involved

Don’t be afraid to involve your partner, spouse, and even your children (if you have any) in your plan to tackle financial stress. “If your kids understand your financial struggles,” says Sun, “they can help find creative ways to save.”

When the whole household works together toward a common goal, you may have a better chance of success. At the very least, being open with the people who are closest to you about your financial struggles can provide you with an outlet to help you cope with the stressful emotions that are often associated with money-related worries.

Sources

  1. Winnie Sun, Sun Group Wealth Partners, https://www.sungroupwp.com
  2. Equifax. “How Long Does Information Stay on My Equifax Credit Report?” https://www.equifax.com/personal/education/credit/report/how-long-does-information-stay-on-credit-report/

About the Author

Michelle Lambright Black is a nationally recognized credit expert with two decades of experience. She is the founder of CreditWriter.com, an online credit education resource and community that helps busy moms learn how to build good credit and a strong financial plan that they can leverage to their advantage. Michelle's work has been published thousands of times by FICO, Experian, Forbes, Bankrate, MarketWatch, Parents, U.S. News & World Report, and many other outlets. You can connect with Michelle on Twitter (@MichelleLBlack) and Instagram (@CreditWriter).

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Written on September 7, 2022
Self is a venture-backed startup that helps people build credit and savings. Comments? Questions? Send us a note at hello@self.inc.

Disclaimer: Self is not providing financial advice. The content presented does not reflect the view of the Issuing Banks and is presented for general education and informational purposes only. Please consult with a qualified professional for financial advice.

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