According to this 2019 study from the American Institute of Stress, 62% of Americans feel stressed about money on a regular basis. In this season where we are all being impacted by a global pandemic, that number is probably much higher. Thinking about pursuing financial wellness right now might not be something you are considering given the uncertainty of things.
However, when you think about financial wellness, it shouldn't just apply when things are great. It applies all the time and in any circumstance. In this article, I'm sharing some wellness tips for your finances that can be helpful in difficult times.
But first, let's go over what financial wellness really is.
What is financial wellness?
Financial wellness is simply defined as your relationship with money. It also includes the plans you have in place to deal with variables that could impact your finances.
Improving your financial wellness means improving your relationship with money. It could be learning how to budget with what you have, working on your self-discipline, laying out financial goals, saving more, etc.
The National Financial Educators Council suggests asking yourself the following questions to gauge the current state of your finances:
- Are you financially prepared for emergencies?
- Do you have active plans in place to reach your short-term and long-term financial goals?
- Do you have a budget and do you stick to it?
- What is your attitude toward money like?
- Does thinking about money make you sick to your stomach or does it make you happy?
Keep in mind that these questions are not intended to make you feel bad. Instead, answering these questions can help you devise a starting point to improve your financial wellness.
Financial wellness in difficult times
Finances are a major area of concern for many especially during times of uncertainty. There are ongoing job losses, people are worried about job security and the still need to be paid. However, improving or maintaining your finances in difficult times is still possible.
Here are a few tips:
1. Downsize and focus on your essentials
In a difficult season, your top priority is keeping yourself safe and stretching your dollars. This means focusing on getting your essentials in place, specifically your food, housing, core utilities, transportation, and any medicines. This also means cutting back on any non-essential spending until things get back to normal.
It's ok to downsize your housing, car, other things you own, your general spending, etc to get through your period of difficulty.
2. Pause or reduce your investment contributions to focus on savings
In times of uncertainty, having emergency savings can help you weather through. It can help put food on the table and pay for core bills until things get better.
Find that you need to save more money to ramp up your emergency savings? It's perfectly fine to pause or reduce any investment contributions you have going on to ramp up your savings. In seasons of uncertainty, the more savings you have the better.
The last thing you want is to really need money but have all your cash tied up in an investment that you might have to sell at a loss. Once you have gotten your savings to a comfortable place, you can go back to investing.
3. Find ways to bring more money into your household
If you've lost your job, had your income reduced, or are worried about job security, then you are probably thinking about how to earn more money. If you really need the money, it's ok to work at a level below your skillset. You can look into customer service and other types of jobs including jobs that allow you to work from home.
In addition, you might have some skills that you can monetize by freelancing or setting up a low-cost side hustle. It's all about challenging yourself to get creative and figuring out ways to earn more.
4. Ask for help if you need to
If you have to, let your lender and service providers know that you are facing financial difficulty. It's ok to ask for help if you need it. Many lenders and service providers have programs in place for individuals facing difficulties. One example is mortgage forbearance programs.
It is however extremely important that you understand all your options as well as the associated costs i.e. interest, fees, penalties, etc. It's also important to understand what happens if you are unable to meet the terms of any agreements you have in place with your lenders or service providers.
5. Work on or start over with improving your finances
Unfortunately, times of financial difficulty is usually what causes many people to take a good hard look at their finances. However, the opportunity here is that despite the difficulty, you can work on starting over or improving your finances. Books, podcasts, videos, and online finance courses can help you get started.
Need some help? Check out our library of 30+ free courses to help you improve your finances.
By taking action on these tips, you are actively working on improving your financial wellness. In turn, you'll also be minimizing your overwhelm, stress, and anxiety. You'll also be positively impacting your mental wellness as well.
Don't allow yourself to stay stuck or to wallow during difficult seasons. Instead, focus on doing the best you can with what you can control. All dark days always come to an end.