Financial stress impacts our mental health

It’s still October and this is my contribution for Mental Health Awareness month. For years, studies have shown that mental, physical and financial health are inextricably linked. It also showed that people in debt have higher rates of mental health issues like depression and anxiety than those who are debt-free.

Mental health and financial woes are related. However, those who are well off are not all mentally well, and all those who are disadvantaged are not depressed or anxious. The way we view our financial situation is what impacts our mental health. Even someone who is regularly paying off their debts may have constant feelings of mental and emotional distress around personal finances.

How to Cope With Financial Stress

With the right knowledge and wisdom, you will learn how to cope with financial stress and effectively manage your financial situation which can help you feel more in control of your life, reduce your stress, and build a more secure future.

Self-awareness - The first step is the most difficult, being honest with yourself. Understanding ‘Why’ you buy things, & the debts incurred is the first step to getting yourself out of it. Once you know how to break out, you can start building toward your future in a more positive way with simple habits that are easy to maintain.

It starts with the Budget - You may feel overwhelmed and think that a budget is only going to add to your financial stress, but it is the best tool you have to get control of your finances and stop worrying about money. Knowing and seeing your cash inflow and outflow, you can then plan out how much money to save for emergency funds, tax obligations, bills payment, education fund, investments and the like.

Determine What You Can Change - If you are having financial issues, you may have an income issue, a spending issue, or a combination of the two. If you know that you do not make enough money to keep up with your current bills, decide what you can do to change the situation. Be practical and create an action plan, whether that’s getting a higher paying job or part-time job or more investments.

Simple savings approach - Know that savings is not enough, you also need to control your expenses.

• Save your windfalls - Unexpected income (contest prize, bonuses..etc..)

• Ignore salary increase - Pretend you didn’t get a raise. I mean you survived with your original income anyway.

• Maximize/minimize technology - (1) Create auto-savings or auto bills payment with your bank, (2) Delete all shopping apps.

Minimalist Investing - Investing can also be a source of stress, why not focus on one or two types?

• Tax free options - PERA account, Pag-ibig MP2, & SSS Flexi/Peso Funds.

• Pooled Funds - Either an ETF, Index-Mutual fund, Index-UITF for passive investing. For conservatives there’s bond and balanced funds.

Get Outside Help - If you are really struggling with getting a handle on your budget and spending issues, do not be afraid to get outside help. You can take classes on basic money management and investing, that will help you plan and do the things you need to succeed financially.

A financial planner can also help you create a long-term saving and investing strategy that will help you take care of your current needs and plan for the future. Seeing the positive aspects of your current financial situation can also help alleviate stress.