We’ve all been there… a job loss, medical bills, credit card debt or an unexpected expense. Just one of these situations is all it could take to send us flying into a whirlwind of financial stress and worry. This ends up affecting our financial and physical well-being and is best to be dealt with on a “sooner rather than later” basis.
It’s a well-known fact that financial problems can lead to mental health conditions.1 In turn, these conditions lead to an increase in physical health problems, such as:
- Stress and Anxiety
- Weight Gain
- High Blood Pressure
Therefore, it makes sense that when there are money issues, specifically a lack of it, stress and anxiety can increase. (This isn’t saying that having a lot of money doesn’t do the same, but we’ll save that for another article.) It’s a cause and effect scenario that, if properly attended to, can be successfully managed.
The fight or flight response
The fight or flight response is one of man’s most primordial reflexes. It’s a physiological reaction that occurs in response to a perceived harmful event, attack or threat to survival. It activates the body’s control system that unconsciously regulates heart rate, digestion, respiratory rate and a lot more.
So what does any of this lesson in biology have to do with money? When we’re in debt or lack the required funds to pay bills, our survival feels threatened and our stress response kicks in. Over time, this affects the way we think about life and money and ultimately starts to take its toll on our bodies.
Some people react to financial stress in other ways. For instance, they may deny their situation until an external event takes place such as a lender’s refusal of credit or calls from collection agencies. Others may feel anger – at their boss, their creditors, even themselves for getting into such a situation. There are those who may get depressed and live with a feeling of hopelessness that their negative financial situation will never recover. In one way or another, these actions and emotions can affect one’s health so it’s important to find ways to help lower their negative impact and work toward a more healthy way of looking at the situation.
Reducing financial stress
It takes a little work to reduce financial stress and the physical effects it produces. However, a few actions and changes in thought process can help put you on the road to reducing the effects of financial stress.
- Face the facts. This can be the most difficult action to take because it means carefully examining your debt (something from which you might have been hiding) and learning exactly what you owe. Initially, this might increase your anxiety, but once you know and understand your debt, interest charges, terms, etc. it just might give you a better feeling of control over the situation.
- Start your debt elimination. Once you understand your debt and know exactly what needs to be paid off, decide on the payoff process that will create the least amount of anxiety for you. Is it paying a little bit on each loan or credit card and then using the remainder for the smallest loan (to get rid of that debt faster)? Or is it using the remainder to pay the loan with the highest interest? To find out which might be best for you, consider checking with a financial advisor or debt consolidation expert. You can also use one of the free myFICO calculators to identify a variety of payoff options.
- Keep a budget. As you pay off your debt, keep track of your money and where it’s going. Are you making purchases you don’t need? Are you saving money where possible? For example, are there ways to lower your cable TV bills or dine out a little less? If you know where your money is going and figure out new and different ways to save, not only will your debt decrease faster, but so should your anxiety because you’ll have more control over your finances.
Another way of taking charge of your financial situation is to know your credit profile which includes checking your FICO® Scores and credit reports. This allows you to see how lenders rate your creditworthiness as well as the status of your credit accounts (debt-ratio, late payments, etc.). There are a variety of products you can use to discover this information and help put your mind ease by giving you a better idea of where your credit stands and what you might be able to do to enhance your financial situation.
There are lots of people dealing with financial stress and debt issues. Read some of their stories at the myFICO Forum. You might get some good ideas about how to lower your stress and improve your health!