Stress can be sparked by a variety of causes — health issues, toxic relationships, or a demanding job — but one factor seems to be taking a particular toll on younger Americans: personal finance. Financial stress is fairly common among millennials, so it’s worth having a frank conversation on the subject.
Recognizing the Cost of Financial Stress
Stress is part of the body’s natural fight-or-flight response that kicks into gear when a potential threat is perceived. In terms of financial stress, threats may take the form of losing a job, lacking sufficient money to pay the bills, or failing to earn enough to support the lifestyle you desire.
Millennials appear to be more stressed about money than any preceding generation. In one recent study, 67 percent of millennials say financial stress swamps their ability to concentrate and be productive at work.
The same report indicates 68 percent of millennials stress about funds to the extent it exerts negative effects on their health. Another study suggests the problem may be more serious than most believe.
According to a data analysis of more than 2,000 survey respondents, 23 percent of people experience symptoms associated with post-traumatic stress disorder (PTSD) with regard to personal finances. The percentage of millennials who undergo PTSD-like symptoms is an alarming 36 percent.
“It was not something I expected at all,” says Galen Buckwalter, Ph.D., one of the leaders of the study. “But we kept seeing it emerge in sample after sample. There’s been a lot of research looking at the financial stressors out there, but from a psychological perspective, no one’s turned it around and looked at the actual symptoms people are experiencing.”
Symptoms of stress include psychological conditions such as anxiety and depression, as well as physical ailments like chronic headaches, stomach problems, high blood pressure, and related heart issues.
Strategies and Tips for Dealing With Financial Stress
Clearly, something should be done sooner rather than later. It’s smart to stay on top of your personal finances, but you can’t let the effort ruin your health.
Here are four suggestions for dealing with financial stress in a healthy and constructive manner.
- Get away and relax. If you’re experiencing financial stress, the first thing to do is get away and relax a while. Visit a spa for the day, go on a hike, read a book … do whatever you can to get your mind off money. You want a fresh start when you return to your personal finance issues.
- Build an emergency fund. Most money issues are linked to a fear of going broke or not being able to afford basic expenses. If you’re living paycheck to paycheck, you can eliminate stress by gaining control. Start by building an emergency fund of three to six months’ worth of expenses. If your monthly expenses are $3,000, you should set aside $9,000 to $18,000 in a savings account.
- Create a budget. As you’re building an emergency fund, you should also be working on a budget. That will tell you exactly how much money is coming in and going out. It also enables you to shift the numbers in order to ensure you have positive monthly cash flow. You’ll feel much better about your situation when you know what’s going on.
- Set aside time. Finally, set aside time each week to deal with personal finances. It could be an hour on Sunday evenings or a few minutes in the middle of the week. Outside of this time, do your best not to think about money at all.
Personal finance can be a huge stressor for millions of Americans, and millennials in particular. It doesn’t have to be. Take control of your finances today and you’ll worry less about the future.