Published to Newsletter on Jan 04, 2023
Financial stress can make us emotionally drained. For many people, the weight of finances exists even with only moderate debt and an OK credit score. After the holidays, the credit card bills begin rolling in. According to a recent study from the American Psychological Association, 72% of Americans reported feeling stressed about money at some point during the last month. Finances are the number-one cause of divorce in America, and can lead to an increased risk of heart disease and reduced outcomes for other illnesses. What’s hard is we don’t always know it’s the money eating away at us—or worse, we’re so wired to avoid thinking about money that we tend to blame our feelings on other things.
The first step towards better financial health is examining your own behavior when it comes to money. Why not start off the new year by practicing self-care? Prioritizing your own mental and physical health is vital. For example, take a moment to assess how you feel after paying your monthly mortgage. Is your debt keeping you up at night? Are you arguing with a loved one over finances? Are you taking on money-induced stress?
Financial trauma is a real thing—and if avoidance is your coping mechanism, then it’s time to tackle this issue head-on. Here are three steps you can take towards achieving a healthier financial future, starting today.
Step 1: Devise a plan
Having a strategy for your money is the best way to take care of yourself and to make progress financially. Acquiring knowledge about how much debt you have versus income can allow for a greater understanding of your monetary situation. You have resources at your fingertips to help you understand your cash flow better based on your debt-to-income ratio. Engage with financial care apps like The Beans to assist with your overall plan.
Step 2: Prioritize your savings
The conventional wisdom is that you must have three to six months of emergency savings in the bank to be OK. That target can be too far out of reach and, for many, too hard to achieve. The truth is, having just a couple hundred dollars in savings improves your financial decision-making ability; in fact, the new rule of thumb might just be one month’s worth of costs. How to start saving is a matter of knowing what your budget looks like. A budget calculator can be the tool you need to see what you spend your money on and where you can save.
Step 3: Spend in alignment with your personality and values
This may resonate with you because it aligns with deep beliefs and convictions. Recent research shows that people get more joy from dollars spent on the things that line up with their psychological fit, in other words, their identity. Formerly, economists thought all dollars were worth the same, meaning a dollar spent on a bestseller is the same as a dollar spent on a concert ticket. Not so! If someone is an avid reader, they’ll get more utility from buying the book. This means you can actually get more from your money than the materialistic object it provides. Some people express themselves by buying organic and ethically sourced foods and supporting locally-owned businesses versus big box chain stores. In contrast, others love music and will gain much more from that concert ticket.
These three steps are a good place to jumpstart your financial self-care along with utilizing resources like these money management apps. Also, remember to lean on the financial and retirement planning experts who can help you in organizing your finances, available to you through UNM’s Benefits & Employee Wellness.
