Here Are the Top 3 Financial Stressors for Americans and 7 Tips To Ease Your Anxiety

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According to a survey from Resume Now, the top three financial issues Americans are stressed about are credit card debt (34%), building emergency savings (21%) and saving for retirement (30%).

With inflation bringing up the costs of everyday expenses and various other economic pressures, more Americans are struggling with these financial stressors. We will share expert tips on easing your anxiety about your finances.

Create a Plan For Managing Your Money

“One of the biggest drivers of financial anxiety is debt, so having a structured plan for tackling your debt can reduce that stress,” said Erika Kullberg, an attorney, personal finance expert, and founder of Erika.com. “Depending on your circumstances, you may want to focus on paying off your highest-interest cards first or start with the smallest balance for a quick win. Either way, the most important thing is that you tackle those debts as aggressively as your budget allows.”

If you want to reduce your financial stress, you have to start by making a plan for your money so that you know what needs to be addressed and that you’re not constantly confused. Creating a plan based on your situation will help ease some anxiety around your finances so you’ll know which problem requires attention first. 

Build Your Emergency Fund Up Slowly

“If your ultimate goal is to set up an emergency fund that covers 3-to 6-months worth of living expenses, it may feel overwhelming, so remember it’s okay to start small,” said Jared Hubbard, the FinTech Product Manager at Plynk. “Once you hit your target for the emergency savings fund, excess funds in your bank account may support your personal savings goals.”

One example he shared is that you can set up a fun savings account where for every $5 you put into your emergency fund, you can allocate $1 to a vacation or concert account. 

An adequate emergency fund may be beneficial for peace of mind, but building one up can be more challenging than ever. This is why you should strive to do your best to start small to have some sort of buffer as you figure out the next step. 

Kullberg added, “Although it might feel like this task is just adding to your stress at first, even small savings built up over a few weeks can give you a sense of confidence and control.”

Automate Your Savings 

If you’re stressed about building your savings or planning for the future, you can set up automated decisions to put funds aside from every paycheck. This can be done without any additional effort on your end. 

“Automating these transfers can help the habit stick, too, and over time you’ll see that your savings can grow without too much mental effort,” remarked Kullberg.

Create a Budget For Your Various Financial Goals

“Know what’s coming in and going out each month and use that to create a budget,” Leslie H. Tayne, Esq., an award-winning financial attorney at the Tayne Law Group. “This budget or outline of income and expenses allows you to see exactly what is coming in and out each month and where you can cut back on spending.”

The objective at this point is to create a realistic budget for your various financial goals (paying down debt, saving up for a trip, planning for the future, etc.). Once you’ve created a budget, you’ll have a plan for spending and saving that should help alleviate financial stress. You’ll know what’s happening with your money now.

Tayne pointed out the importance of setting small and achievable financial goals so it’s easy to stay on track. She added additional insights on automating savings and financial goals:

 “Automate your savings if you have extra funds by setting up weekly, bi-weekly or monthly transfers to the emergency account right from your paycheck. 

Focus On Paying Off Debt

After creating a budget, create a debt repayment plan to eliminate this financial stressor from your life. Tayne shared some suggestions for accelerating the process of paying down debt quickly:

• Determine which debt payoff strategy will work best for you (debt snowball vs debt avalanche).
• Try to cut any unnecessary expenses and then put the funds toward paying down your debt.
• Look into a credit card balance transfer to save on the interest rate. 
• Ask your credit card company for an APR reduction.

The sooner you pay off your debt, the sooner you can ease the anxiety surrounding your finances. If you’re drowning in debt, you’ll want to prioritize this step.

Find Ways to Save For Retirement 

Retirement savings can feel daunting, especially if you’re far from old enough to exit the workforce. Allocating funds to the future may feel like the last thing you want to do as you navigate your daily struggles. However, the sooner you start planning for retirement, the sooner you can have compound interest working for you. 

Tayne elaborated, “save for retirement and contribute to your workplace’s 401(k) if offered. If your employer matches contributions, take them and contribute the maximum matched amount if possible. Open an IRA if your employer doesn’t offer a retirement plan. Even small, regular contributions are better than nothing.”

Try Activities That Help Reduce General Anxiety

As a final piece of advice, Tayne suggests trying activities that might help reduce anxiety. She shared, “Whether that’s meditation, yoga or even financial education, try to empower yourself now for less financial anxiety.”

It’s important to remember that small steps add up and you should be proud of yourself for taking your finances seriously.

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