tightrope walkers! This is how most people today have lived the last few months, as they take stock of life and try, all too often without success, to stretch their income. How to do this path without succumbing to a state of financial anxiety ?
Rising food prices, higher rents, record mortgage interest rates, and wages not keeping up with this widespread increase in the cost of living… This is the portrait of many countries in the last year. , with particular aggravation in recent months.
If your personal finances have been keeping you up at night, you need to find strategies to deal with the problems.
Thinking of all those who are dealing with financial anxiety, we have listed some tips that can help you find a balance.
Financial anxiety: what is it?
Do you feel worried or anxious about managing your personal finances? Are you afraid that the money will not arrive to pay the monthly bills? Have you entered or do you anticipate that you are going to fail?
If you have come to the conclusion that your income is not enough to make ends meet and this thought recurs, causing further concern, then you are probably living in a state of financial anxiety.
First, this type of anxiety is as natural as any other emotion and is part of processes that involve states of stress or great financial concern. Still, it's a feeling that shouldn't be ignored.
The symptoms of financial anxiety – anxiety attacks, insomnia, panic attacks, social isolation, sadness – are indicators of problems that, in the long run, can leave marks on both your physical and mental health.
What is causing this financial stress?
The socioeconomic context that many countries are going through has been a financial stressor for most people. And the reasons are more than many.
In October 2022, images of essential food with alarms appeared in the news in many countries. At the same time, the crisis that affected fuel prices, shot up electricity and gas bills (even at the door of winter), and announced increases in rents and interest rates on housing loans.
Since then, little has changed for the better in this scenario of financial pressure.
crisis at the table
The prices applied to food have undergone consecutive increases. To curb inflation, which for a few months has shown only a slight deceleration trend, governments have carried out certain strategies such as eliminating VAT on many products from the essential food basket. But the truth is that, although positive, this measure will have little impact on people's pockets.
Also according to the Association for Consumer Protection, a basket of foods considered essential registered a slight downward trend in price, but the calculations made at the tip of the pencil show that inflation is still putting pressure on what we pay to eat.
On March 22, this average basket cost 226.15 euros, about 9 euros less than the previous week, when there was a record price. In a brief comparison with the same period in 2022, the same basket cost €192.28, which was even cheaper before the Russian invasion of Ukraine.
Dairy, eggs and meat were the categories that registered the largest increases.
House prices reach all-time highs
The rise of the Euribor marks, month after month, the anxiety of those who have to pay the housing loan installment – we have reached maximums of 14 years. There are even those who are paying about 300 euros more for the provision of the house.
For those who rent properties the situation is not smoother: the rent has become more expensive and there is a shortage of supply in the market.
To face consecutive price increases, and survive financial anxiety, it is necessary to identify the problem and possible solutions, but also to change the mindset , change behaviors and consumption habits.
7 Strategies for Dealing with Financial Anxiety
The first step is to identify the symptoms of anxiety, such as nervousness, difficulty falling asleep, lethargy, depression, a desire to isolate, feelings of shame, panic attacks, for example. Are these symptoms associated with indebtedness, defaults and uncertainties about the future?
Nothing like day after day, with a night in between. Therefore, try to get a good night's sleep whenever you are going through periods of increased stress. If necessary, change the routine so that you can go to bed earlier. A tired mind doesn't think clearly and doesn't make the best decisions.
Try to overcome the symptoms that you have identified as being associated with anxiety. That is, escape from the feeling of shame and isolation, and not accumulate negatively charged emotions. Take a deep breath to face the problem with the necessary objectivity.
If you think it helps, seek financial advice and see a mental health specialist. An outside view can help you assess the problem from another point of view.
Once a certain balance of mind has been established in the face of the problem, it is time to evaluate your financial life, but without judgments and emotional burdens in the process. Analyze coldly and find where you fit the strategies to overcome.
It is time to be objective and rational, to systematize all the financial obstacles that have damaged the stability of your accounts – and have put you in a situation of stress .
This is really the time to review your budget by combing, cutting back on non-essentials and renegotiating some contracts if necessary.
For example, if the house payment is becoming suffocating, it's a good idea to contact the bank and negotiate solutions. If you have several different loans, it may be consistent to make a consolidated loan and keep a single installment, which, in most cases, tends to be less than the sum of all the isolated loans.
It is essential that you stay focused on what you can effectively control. That is, once again, it is important that you know how to escape the emotional triggers that you associate with the problem.
Do not reflect on issues for which you do not have an immediate answer or on problems whose solutions are not within your reach.
Focus all your attention on better managing your personal finances, your life and the decisions you make. This step will lessen your financial anxiety.
If after establishing calm, identifying obstacles, and finding possible solutions, you've still done the math and seem unable to ease the financial stress you're feeling, it's a good idea to talk to those who understand the subject.
When you are not able to solve the problem on your own, there are entities with professionals specialized in personal finance problems – such as DECO's Office of Support for the Over-Indebted, who provide services for free or very affordable.
Stay informed about the measures that the Government is implementing to help reduce the impact of inflation. Any help at this stage can make a difference.
Work together for better money management and recovery of the family budget. Of course, with this, we are not suggesting that you put pressure on the family, or sound alarm bells, especially if there are children and adolescents at home. The idea is to include all members of the family in the financial education process , after all, family finances affect everyone.
It talks about the value of money and the impact of the decisions we make when, for example, we eat out too often, buy something that is not essential at the moment or opt for the most expensive product.
Learn together to create goals and value the saving effort.
One last breath...
In times of crisis, mathematics does not lie and is too exact: when one has to make accounts for life, no calculation is enough to stretch money. It is for this reason that we emphasize the importance of reviewing consumer behaviors and habits.
Finally, remember: getting out of the financial anxiety process doesn't happen overnight and it doesn't depend solely on us. So don't try to walk this path alone. Get help, get the family involved, and don't spend too much time staring into the abyss.
