Financial Stress How Can You Get Rid Of It?
It is known that a person who is in good financial condition and who is actively approaching to build his financial health enjoys more property over time than he would if he did not pay attention to his financial health. This difference even increases exponentially over time.
However, being in good financial condition also means enjoying the benefits of achieving financial well-being and the absence of financial stress.
If you feel financial stress, it has a negative impact on your health, your work performance and, last but not least, your partner’s life.
How does financial stress arise and how to eliminate it?
Those who do not have their finances firmly in their hands, consciously or subconsciously feel the so-called financial stress. Financial stress arises especially in people who have so-called passive access to their finances .
These are people who do not plan and manage their financial flows and may not even understand them. In general, there are three typical situations where people usually feel financial stress and have to deal with its negative consequences.
Spend less than you earn
When a person regularly spends more than he earns, i.e. his expenses are higher than his income. The financial stress arising from this can be reduced by revising and changing financial behavior , as well as by revising existing contracts and fees . Only by reviewing and setting up financial products correctly can a person save tens to hundreds of euros a month on average. But it is also crucial to change your financial behavior to reduce spending below revenue.
Think of your future
Even people who seem to have no financial difficulties and earn more than a minute can feel financial stress because they do not have sufficient financial security for the period in the future when they may need it. It is either an investigation for a period when due to age they will no longer be able to perform their work (retirement), or an investigation or insurance for a period if an unexpected event enters our lives that endangers our income (loss of employment, injury, property damage).
Address financial health comprehensively
Last but not least, financial stress also arises in people who, although they have a regular income higher than their consumption, save for retirement and are insured, do not address their financial health comprehensively. They do not have a financial plan in place that corresponds to their life plans and goals . For this reason, they do not have a clear strategy on how and if they ever achieve what they desire and will ever achieve in life.
As they have not learned the basic financial principles, they do not have a comprehensive view of their finances . In this case, they do not know where they are going financially and they are not sure whether their financial behavior and selected products are really the right ones to achieve their goals, dreams and happy lives.
Many times, for example, they are not sure if they are holding too much cash, which means that they cannot protect their assets from inflation, and every year their earned money declines in value. Basic financial education and an active approach to your financial health can bring satisfaction and relief from financial stress to these people as well.
What causes us financial stress?
Several studies from abroad (where there is a greater awareness of personal financial health issues) in recent years show that if a person feels financial stress, it affects not only their overall health but also their partner life and their commitment and productivity at work.
The effects of financial stress are in particular:
Mental discomfort and sleep problems : Research shows that there is a correlation between financial and mental welfare. According to the 2017 Financial Welfare Report, about one-fifth of people have trouble sleeping due to financial stress. (1)
Reduced productivity at work : According to the same Financial Welfare Report, 25% of employees admit that financial worries affect their labor productivity, thereby affecting their performance in the workplace. Other studies focusing on the effects of employees’ financial stress have had similar results. (1)
Relationship Problems : One in five couples is arguing over money. It is often their lack, but there is a risk of disagreement if one of the partners spends disproportionately or if the partners are unable to agree on the position the couple should take on the money. The financial situation and financial behavior are also the most common causes of divorce. (2).
Financial well-being versus financial stress
The English terms financial wellness , financial well-being or financial fitness are terms that are often used abroad in activities related to building personal financial health and reducing financial stress.
The goal of financial health care is to achieve the so-called financial well-being (ie financial well-being, or in other words satisfaction, well-being, stability or financial well-being).
Financial well-being is a situation in which a person has sufficient financial security to be able to make decisions that allow him to live and enjoy life according to his own ideas and to fulfill his current and future goals and dreams – for example to travel, start studying again or work less and spend more time with family.
You can achieve such a state of financial well-being without financial stress if:
- You are in control of your income and expenses , i.e. you earn more per month than you spend, you pay your bills on time and you also have your debt and its repayment under control.
- You have created a sufficient financial “pillow” in case of unexpected expenses and extraordinary events or you are insured against them, or you have a family or friends whom you can turn to and rely on in case of financial emergency.
- You look at our finances comprehensively and manage them in accordance with your life goals and plans. You have set financial goals and also a plan for achieving them (for example, repaying a mortgage or saving a specific amount for retirement or children’s studies). You are on your way to achieving them.
Financial health care as a lifestyle
Just like health care and well-being, financial health care is becoming a lifestyle for some people. Some people embark on this journey during the period of financial difficulties they need to get out of, others may start to take care of their financial health at a time when they are financially successful.
As with physical or mental health, it is never too late to start taking care of your financial health. However, it is universal: The sooner you start taking care of financial (physical, mental) health, the better the results.
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