How Extra Stress Can Impact Your Financial Health

Financial Health

How Extra Stress Can Impact Your Financial Health

Stress is a feeling we’ve become all too familiar with. Even before the 2020 pandemic, the pressures of managing debt, parenting our children, and keeping up in a fast-paced society weighed heavily on the minds of people around the world. It’s affected us spiritually, mentally, and in some cases, physically, to the point of serious illness.

Extra stress can lead to a decline in our financial health. Simply looking at a debt snowball calculator to prepare a debt payment plan causes some folks to despair over their financial condition. That can lead to irrational actions, some of which may affect your wallet. To help you avoid that, we’ve compiled a list of behaviors to be aware of.

1. Stress spending as a release mechanism

Anyone who has spent hours shopping on Amazon should be familiar with this behavior. Pushing that “Buy Now” button can release endorphins in your brain. It’s an addictive behavior. Doing it compulsively to relieve stress can be as bad for you as any other harmful addiction. Sadly, it doesn’t eliminate the stress. You simply spend more money.

This is a serious condition that can result in financial unmanageability if left unchecked. One of the ways to prevent it is to create a budget for yourself and set spending limits. Of course, anecessary first step to precede that is to admit it’s a problem in the first place. Once you’ve done that, you can take appropriate action to keep the behavior in check.

Failing to save money

Compulsive shopping and taking on new debt will limit the amount of “extra money” you’re able to put in savings. That’s an understandable cause and effect scenario. A more dangerous version of this is when you simply stop caring about making weekly savings deposits. That could suggest a bleak outlook for the future.

Another possibility for a failed savings plan is that the stress in your life is so overwhelming that you simply forget to make savings deposits. Automating those deposits with your bank or savings app can stop you from missing deposits and give you one less thing to worry about. The underlying stress will still be there, but you’ll have a growing bank balance to watch.

3. Poorperformance and loss of focus

Stress at home can lead to poor performance at work. You may experience a loss of focus or become less ambitious about pursuing advancement. These issues can have a monetary cost. Performing poorly could lead to job loss or having your hours cut back. Without ambition or a drive to improve yourself, you might get passed over for a promotion.

Removing the source of your stress would be an ideal solution to this problem, but that’s not always possible. As responsible adults, we need to develop coping mechanisms. Joining a gym could increase your energy levels. Changing your diet might help also. In some cases, taking some time off to decompress might be the best option.

The bottom line: Find healthy stress relievers

Stress is always present in some way, shape, or form. Relieving that stress through unhealthy behaviors like compulsive shopping, neglecting savings, or simply not caring will lead to poor financial health. It’s important to find healthy stress relievers like exercise, nutrition, or rest. Don’t ignore the problem. Find positive ways to treat and deal with it.

Kevin Flynn

Kevin is a former fintech coach and financial services professional. When not on the golf course, he can be found traveling with his wife or spending time with their nine wonderful grandchildren and two cats.

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