Money is one of the biggest stressors in many American’s lives. A 2017 AICPA survey found that 56% of Americans said debt negatively affected their lives, 39% said the debt made them feel anxious, and 21% said it caused tension with a spouse or partner.
With tens of millions of Americans losing their jobs due to the COVID-19 pandemic, stress levels and anxiety are likely climbing, potentially leading to a feeling of hopelessness and having a serious impact on your quality of life. CPAs from the New Jersey Society of CPAs offer these tips to help you better manage your financial stress.
How much are you saving and how much do you owe? Are you spending more than you make? Are you maintaining manageable debt levels and staying current on all bills?
Know where you stand financially; regularly review your spending habits, debt levels, savings and investments, and credit reports and scores. Monitor cash flow. Know how much is coming in, where you are spending, and where you can cut and increase savings. Take inventory of all debt and categorize it by type, the institution held, interest rates, and maturity dates. Also look at all recurring costs, such as utilities, to determine what must be paid each month.
One great way to take control of your finances is to build a solid financial plan. Work with a CPA or financial advisor to determine retirement and savings needs and investment growth targets, then build an investment portfolio to reach those goals. Do not panic at sudden or quick changes in the markets. Stick with your plan.
Be sure to review that plan with your financial advisor on a regular basis to adjust for changes in your savings needs, growth targets, or other life events, such as marriage, divorce, a new child, or job loss.
Go out for a walk or a jog to improve physical and mental strains. Give yourself a mental break by taking time for meditation, yoga, or catching up on that book you wanted to read. Or, reach out to family or friends to see how they are doing and talk about your concerns.
Don’t be afraid to seek help from trained mental health professionals who can help you address your stress and anxiety.
One great way to reduce your financial stress is to put much of your money management on autopilot.
First, take advantage of autopay options to reduce how many bills and payments you have to remember each month. At the same time, set up automatic savings plans to build an emergency fund for future economic downturns.
Leverage apps and other software to track your spending and find areas to cut back. There are many wonderful free ones available. Sign up for alerts from your bank or credit card providers to make sure you can address fraudulent charges quickly.
Lastly, try to implement good financial management and planning and maintain that program beyond the downturn. Contact Alloy Silverstein Financial Services or an Alloy Silverstein CPA for help with managing your finances and planning for the future.
Copyright 2020. The American Institute of CPAs.
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