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With Christmas around the corner and the cost of living on the rise, money stress is reaching a peak for many young people — and it’s been bad for a while.
Nearly three in four Americans under 40 say managing their finances is taking a toll on their mental health, according to a new survey from Laurel Road, KeyBank’s digital banking platform. Over 60 per cent feel “constantly stressed.”
“Financial stress and anxiety are incredibly common feelings among Gen Z and millennials,” says Alyssa Schaefer, general manager and chief experience officer at Laurel Road. “We see that cultivating ‘mental wealth’ is clearly a priority for many individuals.”
That means building more financial knowledge and setting up a financial plan so you can feel confident about the future. Here are five ways to achieve those goals: Article content
1. Beat your debt into shape
Lewis Tse Pui Lung / Shutterstock While you may not be able to eliminate your debts anytime soon, you can relieve a lot of pressure by getting them in the most manageable shape possible.
In many cases, your best bet could be refinancing with one of today’s record-low interest rates . Assuming you have a decent credit score , refinancing could help you pay off your loan more quickly and save you a huge amount in interest. 2. Create an actual budget
Stanislav Vinogradov / Shutterstock About two-thirds of millennials and Gen Zers are concerned about overspending during the holiday season, but only 38 per cent are actually budgeting.
Consider talking to your loved ones about swapping homemade gifts, like baked goods or crafts, or agree to skip the gifts and simply share the pleasure of each other’s company. You’ll probably find some of your friends and relatives are tight on money, as well. Article content
If you are buying gifts, remember you can download a free app that will give you cash — not points, not travel miles, but actual cash — when you shop.
Even after 2021 comes to a close, a monthly budget can be a great money- and stress-management tool. Dig out a notepad and list all of your usual expenses, like groceries, credit card bills, mortgage or rent payments and retirement savings. That way you know exactly how much you can spend on the fun stuff each month, worry-free. 3. Prepare for disaster
Dmitry Kalinovsky / Shutterstock If your anxiety comes from imagining the worst-case scenario, like a job loss or running out of money in retirement, then it’s time to prepare for it.
About 44 per cent of the respondents in the study say they’re trying hard to save more. However, saving is only part of the picture; you’ll also want to maximize the money you’re saving. Article content
Tuck away some savings each month into a high-yield savings account so it has a chance to grow. Normal chequing and savings accounts offer next to nothing in interest.
Experts suggest keeping enough money on hand for three to six months of expenses, if possible. Knowing you have a secure stash for emergencies like dental work or expensive car repairs can help bring peace of mind.
However, you’ll also want to make sure you’re investing for the future — and the best thing you can do is to start early. Even a small amount can grow into a fortune with time, so consider using an app that lets you invest with just your “spare change.” 4. Ask for help
Prostock-studio / Shutterstock Don’t be afraid to talk to someone if your financial anxiety is spiralling out of control — whether that’s a mental health professional or a financial planner. Building “mental wealth” goes both ways. Article content
A good financial planner will examine your situation and help you meet your goals, like planning for retirement, managing investments and dealing with debt.Just keep in mind that they won’t be directly addressing your emotions or trauma regarding money.If you can find one, financial therapists specialize in both mental health and money. They can help you rethink your relationship with money, address your coping behaviours and even assist in coming up with the right spending plan. 5. Find other sources of wealth ImYanis / Shutterstock If your 9-to-5 isn’t generating enough cash for your comfort level, try to take control through other avenues, like starting up a side hustle or investing.It used to be pretty hard to turn a hobby into […]
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