Personal Financial Stress: How to Escape A Toxic Cycle

Helping you manage your personal financial situation

Become empowered to overcome financial burden and discover the master plan to get you on the right path.

Financial challenge is a growing problem for many persons. In fact, even if you are economically stable, you should be thinking of strategies to further propel you down the road to financial freedom.

I’m no financial guru but this post will definitely be an appetizer for you to seek new, improved ways to advance your personal financial standing.

In this post you’ll learn:

The effects of financial challenge

Practical solutions to improve your personal financial standing

So, without further introduction, let’s start off with a little statistic. These numbers will let you realize that, even if you are facing financial issues, you most definitely aren’t alone:

According to CFSI (2015), 57% of Americans are struggling financially. In fact, only 23% of black and 22% of Latino families are financially healthy; compared to 50 % of white families.

These are some very grim statistics. Unfortunately, the situation is likely much worse in many other regions of the world.  Now, let’s discover the effects of having difficulties with your personal finance.

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"The financial system in the fall of 2007 was significant, but not so significant as to threaten the overall stability of the U.S. economy, although it did lead to the beginning of a recession at the end of 2007." -Ben Bernanke

The cost of personal financial difficulties

If you’ve ever had any real money problems, you’re probably fully aware of how it adversely affects your health and quality of life.

I’ll agree that these effects are subjective and are significantly influenced by your support system – or lack thereof – and resilience. Additionally, a lot of individuals have other sources of new and ongoing mental and physical stress that are often correlated.

As such, personal financial issues may not be the only cause for these factors I list below; but it’s definitely a very significant contributor.

  • Decreased self-esteem and feelings of lack of control
  • Lack of interest and retracting from society
  • Difficulty sleeping
  • Headaches and stomachaches
  • Relationship issues (spouse, children, etc.)
  • Decreased workplace performance
  • Frustration, stress, anger
  • Stigma and shame
  • Development of unhealthy habits (smoking, alcoholism)
  • Depression, anxiety, suicide
  • Generational socioeconomic difficulties

Personal finance and happiness

It’s amazing how your personal financial situation can consume your minds. Undoubtedly, financial challenges can negatively influence your self-worth and self-discipline.

In turn, this decreased self-esteem may likely affect your happiness, confidence, and chances of being successful in many other areas of your life.

Sure, money doesn’t buy happiness but it sure does make some aspects of our lives a whole lot easier.

So, I tried to do some research to be able to provide you with some concrete facts about money and happiness.

However, studies are conflicting. Some surveys do report, a positive correlation. That is, more money equals more happiness. 

However, others argue that after a certain threshold, which is needed to ensure your essential needs are met, personal satisfaction doesn’t vary much with further improvement of your financial situation. 

However, that threshold varies, with one study reporting it being a household income of around 60,000 and 75,000 USD (Leong, 2019).

Are you fully aware of your personal financial situation?
"Economic storm is coming and the stress levels are going to increase because of financial worries." -David Wilkerson

Yes, I know, happiness is very subjective. But, poor personal finance may also hinder other -more fundamental- aspects of your life.

There’s no doubt that it’s pretty hard to get a good night’s rest when you’re unsure about how you will pay your bills or survive retirement.

Consequently, this lack of sleep can lead to chronic stress and fatigue that may affect your mood, concentration, interpersonal relationships, and even your physical health.

According to Hill (2017), nearly two-thirds of Americans occasionally lose sleep because of money challenges. This number is even greater for millennials and racial minorities.

Fortunately, however, you don’t have to be permanently entangled in the vicious cycle of personal financial distress. That’s what we’ll address next…

If nothing changes and the wealth of the average family increases at the current pace, it would take the Black family 228 years and the Latino family 84 years to acquire the same amount of wealth the average White family currently has (Asante-Muhammed, 2016).

What does this statistic prove? 

That if you don’t take active measures to change your current situation, your situation will remain unchanged, likely even for generations. So here are the initial strategies for getting things under control:

Know your current personal financial situation

Unfortunately, your personal financial situation might be even worse than you think. However, Be completely honest with yourself so that you are thoroughly aware of all your liabilities.

Also, explore all your toxic habits and spending patterns.

Having a plan will likely make you have a much better outlook. But, be realistic and set SMART (Specific, Measurable, Attainable, Relevant, Time-based) goals to set you up for success.

Always live below- or at least within your means. Even if your salary is low, you should aim to save a percentage of it every month. Eventually, that can be used for profitable investments.

Decrease your expenditure: Work on decreasing your personal financial demands and maximizing your income.

Have a budget so that you can continuously track your spending. Notably, there are some great budget apps to help you stay committed.

Increase your income: Above all, if it seems virtually impossible for you to save; you will need to consider getting a better-paying job and/or having a side hustle.

Prioritize your financial battles

Prioritize your problems according to consequences and urgency. Additionally, establish which issues are optional and those that can be entirely eliminated from your list.

This way you have less to focus on at any given point, saving you much-needed time and energy.

Begin your mission to personal financial stability 

Get started, even if you aren’t completely ready, and remain dedicated to the journey. It often helps to have others who are committed to seeing you succeed. Regardless, once you discover your “WHY,”  your passion will drive you to the finish line.

Adjust your personal financial plan

Things will not always go as planned. You’ll likely learn a lot along the way. As such, don’t be afraid to make changes to improve your plan. However, just make sure you never give up.

Your family -and bank account- will thank you.

Man using his credit card to pay his bills on the computer
All things are possible if you believe. - Mark 9:23

How much money do you have in your savings account?

It’s a frightening statistic for many:

One survey showed that in 2018, 58% of Americans had $1000 in their savings account. That number rose to 69% in 2019. Of these, 45% had $0 in their savings (Huddleston, 2019).

That’s a lot of people with very little savings, isn’t it? And yet most people completely ignore these statistics. Even some persons that are more financially stable believe that there’s no way that this could happen to them.

But, just ask some of the people who’re already affected by personal financial demands and they’ll tell you that it can and does happen.

They’ll also tell you that the main cause was due to living paycheck to paycheck. In fact, chances are that you’re at an even greater risk if you are depending on only one stream of income.

Unfortunately, losing your job is always a possibility. Of note, the other reasons for having little or no savings included being buried in debt, being unable to budget, and unemployment.

In just moments you’ll find out the best strategies to prevent you from becoming part of this statistic.

I definitely believe that your uniqueness is your greatest asset. Yet, I do know that it’s essential for you to learn from others.

That’s why I believe that you should start following the patterns of those who already have money… Well, at least if they’re legal, healthy and ethical.

It takes a wise man to learn from his mistakes, but an even wiser man to learn from others – Zen Proverb.

After researching the habits of millionaires, here are the questions I need you to ask yourself.

Unleashing the millionaire within you

Are you actively working on increasing your knowledge?

You can start by reading all my blog posts…. Haha… ok, I just had to put that out there. But seriously, reading will greatly increase your knowledge. After all, you should be continually committed to personal development.

Almost 90% of wealthy people read for at least half an hour daily, mostly for non-entertainment purposes (Loudenback, 2019).

Are you taking care of your health?

I know that many of you are perhaps so busy that you no longer make yourself a priority. However, you need to seriously consider the consequences of neglecting your own self-care.

As such, always carve out some time to dedicate to relaxation and exercise. These will benefit both your physical and mental health.

Wealthy people exercise at least 30 minutes daily and sleep at least 7 hours per day (Loudenback, 2019).

How much money you you have in your personal savings account?
Wake up early and tackle the day before it tackles you. Be on the Offense, not defense – Evan Carmichael

Who are you associating with?william iven jrh5lAq mIs unsplash 1william iven jrh5lAq mIs unsplash 1

Are your friends progressive? Do they encourage and motivate you to do better? I’m sure you don’t need more negative energy in your lives.

Who are the people that can motivate, encourage, and inspire you? Find and stay connected with them.

Be picky about who you keep around you. Personality, words, and traits do rub off naturally.

Do you volunteer?

What are you doing for others? Please note, volunteering is not only about giving your services for free but it’s an important way to network, gain valuable experiences and let others see your talents.

What are your goals?

Know your dreams and start carving out a plan to achieve them. You may definitely have to tweak your strategies.

But, you don’t have to give up on your dreams. Take a few minutes each day to think about your goals. Believe in yourself and remain positive.

What time do you get up?

Waking up earlier will likely decrease your distractions. In fact, by starting your day off earlier, it’s easier to compensate for unexpected interruptions.

Who are you?

Who do you become in times of failure and success? Even as you work on developing yourself for tomorrow, always remember to be kind and courteous.

Are you diversifying your income?

Now let’s discuss the power of diversity. I’m sure you’ve read already that the average millionaire has seven sources of income. As such, I think the average person should stop being satisfied with having just one.

It’s the best way to minimize the risk of sudden unemployment and unprecedented events. Actually, with the rising cost of living and increasing demands, having multiple income streams is becoming more of a necessity than a luxury.

When you come to think of it, having only one source of income is very risky so don’t put all your eggs in one basket. Be optimistic and relentless as you pave your own path to success.

Do you believe that money buys happiness? If you’ve learnt something and feel more motivated to work towards financial freedom, let me know in the comments below.

Remember to share this post, someone else may find it useful as well. Also, feel free to share the tips/strategies you’ve used 0n your own journey.
References:

CFSI: Center for Financial Services Innovation (2015) Understanding and Improving Consumer Financial Health in America. Accessed: 21-Feb-2021.

Hill, C (2017) Your insomnia is probably caused by money worries. Accessed: 25-Feb-2021.

Huddleston, C (2019) Survey: 69% of Americans Have Less Than $1,000 in Savings. Accessed: 25-Feb-2021.

Loudenback, T (2019) 17 habits of self-made millionaires, from a man who spent 5 years studying rich people, Accessed: 21-Feb-2021.

Melissa Leong (2019) If money doesn’t buy happiness, why are we so obsessed with getting more of it? Accessed: 01-Mar-2021.

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