Years of the pandemic and now record-high inflation have left most Americans feeling uncertain and on-edge with their finances.
Despite that stress, Fidelity says, most adults don’t want to make major lifestyle changes to save some extra cash. The investment site polled over 2,000 adults under 44 and found that even though Americans want to save, they can’t bring themselves to do it.
They reported that 2 in 3 respondents said they’re so stressed about money they avoid thinking about it altogether.
While income is often a top barrier when it comes to saving, most people in Fidelity’s survey said that a tighter budget could mean missing out on what makes them happy. Younger respondents especially felt like spending money on good experiences is an important priority.
The majority (61 percent) also said that the fear of missing out pushes them to spend more than they initially mean to. Here’s how financial stress from spending can weigh affect your mental health over time.
The cycle of worry
An emphasis on fun experiences and dopamine-driven purchases will only lead to more stress if your budget can’t support that kind of lifestyle.
Recently-released research from Debt.com revealed most respondents say credit cards can negatively impact their mental health. In a poll of 1,000 Americans, close to 25 percent admit taking on between $1,000 and $5,000 in credit card debt because of impulse spending while feeling stressed or down.
It’s a catch-22: Americans feel stressed, so they spend extra money. Then they feel stressed after spending extra money.
“When you incur debts while you’re feeling terrible, it never makes you feel better,” Don Silvestri, president of Debt.com, says.
Respondents in a survey from Cushion, a fintech company, said the pandemic intensified the stress of checking their accounts. For many, that also means more overdraft fees and more money down the drain.
Escaping the bank account “cringe”
First, even if you think you know how much money is in your account, you still need to check it. If you’re not keeping an eye on your transaction, you might miss fees and charges that could’ve been disputed.
Or, you could accidentally impose fees on yourself. Some respondents to Cushion’s survey admitted that avoiding their accounts led to overdraft fees.
Second, make a budget. People in all three surveys mentioned here said they avoid looking at their accounts and budgeting because it’s too stressful – but that’s got to end. If you don’t have a budget that you’re consistently following, you’re much more likely to overspend.
Although it might feel intense at first, it’ll decrease your stress over time. That way you’ll know you can cover your usual expenses and still set money aside for fun activities or shopping splurges.
Nearly 60 percent of adults told Fidelity when they try to save more, they fail. That’s not too surprising considering they aren’t even checking their balances. Sometimes it pays to take a breath and face the stress head-on.
The pandemic decimated a lot of Americans’ savings accounts and increased their debts, making it extra important to be financially aware. There are plenty of tips and tricks to budgeting, as well as mistakes to avoid. But having any kind of budget is better than not having one at all.
Below are five simple tips that can be helpful while getting your finances in shape. Some will benefit your physical and mental state while you’re at it.
Find out: How to Cope With Financial Stress
1. Set a plan
Because being in debt can feel overwhelming, it’s helpful to focus on what you can do instead of what you can’t. Mapping out what your financial goals are can help you stay disciplined and on a course that works for you.
2. Make a budget, and stick to it
Once you know your plan, it’s time to put it in action. Every debt relief and saving strategy starts with a budget. You need to know how much you regularly earn and spend to create a successful plan for your finances.
There are digital budgeting products like Tiller, Mint, and You Need a Budget (YNAB). Or maybe you’re like most Americans who prefer budgeting with a pen and paper, according to research from Debt.com.
3. Get moving
That means mentally and physically. You don’t need a gym membership. Outdoor exercise and fresh air can help clear your mind. A bike ride or a run can help improve your mood and help lower your stress levels. Exercise releases endorphins, pleasure-causing chemicals that make us feel less stress and pain. And since exercising keeps your body in shape, it’s beneficial for both your body and your mind.
4. Find a support group
Enlisting the help of a friend is always beneficial in therapy and your finances are no different. Talking about money is taboo to some, but you may be surprised to find a friend or family member of yours who wants to make a positive change in their life too. Open up and talk. Just like a spotter in the gym or exercise partner, you two can keep each other accountable while fixing your finances.
5. Keep a positive mental attitude
Having a positive attitude is necessary if you’re struggling with anything – including finances. Cutting back can be difficult. When the going gets tough it’s going to take grit to get through. A positive mental attitude can help you achieve more than you originally knew. Getting out of debt and saving is a journey. It’s a marathon, not a sprint. Stay focused on the plan and the results will come.
Debt.com has previously reported on the effects of money and mental health. If you’re truly not feeling yourself it’s important to check in with a medical professional. Seek professional help from a doctor. There may be more to the cause of overspending or depression.