Menu #29: Simple steps to managing financial stress

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13% is how much CrowdStrike shares declined during Monday's trading session. The drop occurred as the cybersecurity software company continued assisting clients in recovering from an outage that affected millions of Microsoft Windows devices last week. The IT outage impacted various sectors, including banks, airlines, public transit, and healthcare (Source CNBC).

113 is the number of medals that Team USA won during the 2020 Summer Olympics in Tokyo, the most among all nations. This total included 39 gold, 41 silver, and 33 bronze medals (Source: International Olympic Committee).

68% of people believe that a soft landing is the most likely outcome for the global economy in the next 12 months (Source: Yahoo Finance via Bank of America’s July Global Fund Manager Survey).

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How to manage financial stress

We all know that managing money can sometimes feel overwhelming. Financial stress is a common experience and can take a toll on our mental well-being if not addressed. Here are some personal insights and practical tips on managing financial stress and maintaining mental health.

Acknowledge Your Stress

The first step in managing financial stress is acknowledging it. It’s okay to feel anxious about money—it’s a natural response. Ignoring the stress won’t make it go away. Simply admitting it and talking to someone you trust can make a huge difference.

Create a Financial Plan

Combat financial stress by having a clear plan. Assess your current financial situation: list your income, expenses, debts, and savings. Seeing everything laid out can be daunting, but it’s essential. Once you have a clear picture, create a budget prioritizing essential expenses and allocating funds toward debt repayment and savings.

Set Realistic Goals

Setting financial goals provides direction and purpose. Whether it’s building an emergency fund, paying off a credit card, or saving for a vacation, having clear goals gives you something positive to focus on. Break these goals into manageable steps. Achieving small milestones can boost confidence and reduce stress.

Build a Support System

Having a support system makes a significant difference. Talk to your partner, family, or friends about your financial worries. Sometimes, just having someone listen can be incredibly comforting. They might also offer helpful advice or a different perspective.

Focus on What You Can Control

Financial stress often comes from feeling out of control. Focus on the aspects of your finances you can control, like your spending habits and budget management. Make conscious choices to cut back on non-essential expenses and find ways to save money. Small changes can add up and help you feel more in control.

Educate Yourself

Knowledge is power. The more you understand personal finance, the better equipped you’ll be to handle financial challenges. Educate yourself about budgeting, saving, investing, and managing debt. There are plenty of free resources online, including articles, videos, and courses.

Practice Self-Compassion

It’s easy to be hard on yourself when facing financial difficulties, but self-compassion is crucial. Remind yourself that it’s okay to make mistakes and that you’re doing your best. Treat yourself with the same kindness and understanding you’d offer a friend in a similar situation.

Celebrate Your Progress

Don’t forget to celebrate your progress, no matter how small. Every step toward managing your financial stress is a victory. Celebrate the little wins, like sticking to your budget for a month or paying off a small debt. Recognizing your achievements can boost morale and motivate you to keep going.

Financial stress is a common challenge, but with the right strategies, you can manage it effectively and maintain your mental well-being. Remember, it’s a journey, and it’s okay to take it one step at a time.

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Digital bites we think you’ll like

Blue screens everywhere — This past Friday was a significant day in the tech world. A massive IT outage, resulting from an issue between Microsoft and CrowdStrike, caused widespread disruption. Banks, hospitals, and several other industries were affected. Air travel was particularly hard hit, with many planes grounded and flights delayed.

What are the chances of a rate cut? — Traders are now convinced that the Federal Reserve will cut interest rates by September, with most betting on a quarter percentage point drop. This shift in confidence comes after recent data showed inflation cooling to the lowest rate in three years, and Fed Chairman Jerome Powell hinted that rate cuts could come sooner rather than later.

The economics of hosting the Olympics — Only one Olympic Games has ever turned a profit: the 1984 Games in Los Angeles. The upcoming Paris Games aim to be the second. To keep costs down, Paris is limiting construction expenses by building just one new permanent stadium for the event. In contrast, Tokyo built eight new venues for the 2020 Olympics and Rio de Janeiro built nine new venues for the 2016 Olympic Games.