5 ways to deal with financial stress in the midst of uncertainty

According to McKinsey, average life satisfaction in Europe, which consistently outpaces the world’s well-being, fell in April 2020 to its lowest level since 1980. Similarly, McKinsey’s research in Asia found varying degrees of consumer confidence in a tracking study. in February. Meanwhile, a US study by the National Endowment for Financial Education found that nearly nine out of 10 Americans said the COVID-19 crisis made them experience financial stress. Some common causes of financial stress include not having enough savings for emergencies, investment losses that can derail retirement plans, loss of income or disrupted income from a job loss or vacation, high credit card or student loan debt, etc. .

While some governments have provided economic stimulus packages including direct payments, grants and loans, for some the financial impact of the coronavirus could have a long-term impact. Several studies have established links between financial stress and poor mental and physical health. According to the Australian Government’s Department of Health, signs can include arguing over money, trouble sleeping, or feeling angry or scared. Other studies have shown that financial stress contributes to bloating, high blood pressure, muscle tension and poor digestion. If you have been financially affected by the outbreak of corona virus, do not wait for the money problem to end, which can spoil your overall health. By actively dealing with financial stress early on, you may be able to stabilize your financial situation more quickly and improve your long-term financial outlook. Here are five steps you can take to reduce stress and create a plan to get your finances back on track.

1. Take stock of your situation: One way to help ease financial stress is to fully understand how much money you have, how much is coming in each month and which bills are due. To get a complete view of the month, try summarizing it on the monthly calendar. Mark the date or dates you expect to receive income, as well as due dates for your rent or mortgage, utilities, credit cards, tax payments or other fixed expenses. This will help you understand your cash flow. If most of your bills are concentrated within a one-week period or during a particular time of month, it makes sense to contact your creditors to see if you can change some of your due dates or get an extension. and keep your cash safe. Flow.

2. Track Your Spending: If money is tight, try tracking your spending for a month or two to see how you are spending it. Write down each purchase and each bill paid in a notebook or spreadsheet. After your tracking period is over, go through the list and see which expenses can be deducted and which are required. From there, try to develop a monthly budget and stick to it.

3. Don’t Try to Take Financial Decisions in One Go: It’s easy to get overwhelmed when facing rising bills and not having enough income to cover them. Instead of looking at your financial problems as a whole, try to solve them one by one.

4. Remember Your Goals: Just because money seems tight right now doesn’t mean your financial and life goals are less important. Besides saving, what are other ways you can stay on track and make progress? Some people find that doing freelance work, selling unwanted assets or relocating to a less expensive home can help generate extra cash for the future.

5.Seek the Guidance of a Certified Financial Planner (CFP) Professional: CFPs are professional financial planners who have met rigorous initial and ongoing global qualification standards for the practice of financial planning. CFP has agreed to abide by the Code of Professional Conduct and is committed to putting the interests of its clients first. The CFP certification is the worldwide standard of excellence in financial planning.

Noel Mai is the CEO of the Financial Planning Standards Board Ltd.