It is no secret that finances can cause stress, but just how widespread is the issue? The worry of paying bills, providing for your family, and achieving your financial goals can take a toll on not only your wallet but also your mental health. A recent survey by BrightPlan shows that financial stress among employees and employers has more impact than we realize.
Impact at work
According to the survey's findings, 92% of employees have financial burdens due to unstable economic conditions. The leading factors contributing to financial stress include steep inflation, a potential recession, escalating interest rates, and recent turbulence in the stock market.
Financial stress affects even senior executives, with 76% of C-Suite and HR leaders experiencing it. On average, employees are losing more than a day's worth of work every week, costing U.S. businesses a staggering $200 billion annually in lost productivity and engagement.
Impact at home
The effects of financial stress are not just limited to the workplace. According to the BrightPlan study, 64% of those surveyed agreed that financial stress made their relationships with friends and family worse.
A whopping 72% of people have had to turn down social invitations due to financial constraints. But it's not just social events and relationships that suffer — 60% of people surveyed feel that their financial struggles have negatively impacted their health.
Financial struggles can take a toll on your relationships and every other aspect of your life. Feelings of isolation, embarrassment, and shame often stem from money worries, making the situation even worse.
Reducing your financial stress
The good news is that you can act to reduce financial stress and regain control over your money. Here are some practical ways to start moving toward financial peace of mind.
Build your financial knowledge
Start by utilizing the financial wellness programs your employer offers. Shockingly, one in four employees surveyed are unsure if their company offers financial benefits. If your company doesn't offer any, look for free financial resources you can take advantage of.
Develop a proactive approach and seek out classes, online workshops, and mentorship programs. Don't know where to get started? The BrightPlan study shows that employees desire the following financial benefits the most:
- Emergency savings fund
- Debt management services
- Homeownership assistance
- Financial advisor access
- Personal loan or home loan access
If you fail to plan, you plan to fail
Another way to reduce financial stress is by building a financial plan. Having a clear plan and understanding where your money is going can help alleviate stress and give you a sense of control over your finances.
This plan should include setting financial goals, such as paying off a credit card or building an emergency fund. Setting financial goals provides you with a clear plan and direction, which can help eliminate financial anxiety.
Tell your money where to go!
One of the biggest stresses of managing finances is not knowing where your money is going. Creating a budget can help you manage your money better. Start by writing down all of your monthly bills and expenses and compare it to your monthly income.
Budgeting apps can do this automatically and give you encouragement along the way. Apps like Mint and Rocket Money allow you to link your bank accounts to get an overview of your finances. The insights provided by these apps are invaluable when it comes to money management.
Increase your income and reduce your expenses
Next, try to increase your income by negotiating a raise, finding a part-time job, or taking on a side hustle. Second, evaluate your spending habits and look for areas where you can cut back, such as dining out or subscription services. Also, make a plan to pay off credit card debt as soon as possible.
Keep a positive attitude and celebrate small victories along the way. Overcoming financial stress may take time and effort, but it is a worthy investment in your future.
The cost of financial stress can manifest in many ways, including decreased productivity, missed days of work, and strained relationships. But there are ways to combat it. By understanding its impact, increasing financial literacy, and taking advantage of free resources, we can reduce the negative impact it has on our lives. Remember that taking care of your overall well-being and finances go hand in hand. Investing time and effort into both can pay dividends in the long run.
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