Money tops the list for causing stress among Americans and especially Millennials according to a new report from the American Psychological Association.
Millennials lead all age groups when it comes to money worries edging out Gen Xers (5.5 on a 10 point scale vs 5.4 for Gen Xers, Boomers 4.5 and Matures 3.5). In fact, 43 percent of Millennials feel that a lack of money prevents them from living a healthy lifestyle.
Effects of Worrying About Money on Millennials
Millennials that report extreme levels of stress about money are more likely to engage in unhealthy and sedentary behaviors in an effort to manage stress levels. 58% of high stress millennials report watching TV/movies for more than 2 hours per day, while 67% admit to surfing the internet, 46% sleeping/napping, 41% eating, 25% drinking alcohol and 21% smoking. As a result of these unhealthy behaviors, 31% of these millennials rate their health as fair to poor.
Women consistently report higher levels of stress than men when it comes to money and nearly half (49%) state that paying for necessities is a “somewhat or very significant source of stress.”
Stress Can be a Barrier to Reaching Health and Lifestyle Goals
When managed properly, stress can serve to heighten our awareness and be a healthy source of motivation. However, if not managed effectively or if it occurs frequently, stress can lead to lack of motivation and depression.
In fact, 75% of Americans report experiencing at least one symptom of stress over the last thirty days. The most common symptoms include feeling angry/irritable (37%), feeling anxious/nervous (35%), lacking motivation/interest (34%), feeling overwhelmed (32%), and being depressed (32%). Many of them have tried to make a significant lifestyle change such as losing weight (58%), reduce stress (53%), eat healthier (49%), sleep more (47%), and exercise more (45%).
The lack of willpower is cited as a major barrier to making lifestyle changes by 32% of Americans and 29% say stress has gotten in the way of exercise.
Stress can also affect our relationships with family and coworkers. According to the study, 41% of adults say they lost patience with their spouse/partner and 18% have been short with a coworker, and 26% report that stress has interfered with taking care of responsibilities at home.
Tips for Managing Financial Stress
As you can see, stress can affect all areas of our lives and when it is not managed properly can have a negative impact on our health, performance at work, and relationships with friends and family. Here are several strategies you can use to minimize the stress over money.
Make saving a priority – Perhaps the single most effective thing you can do to minimize stressing over money is to adopt a Save First mentality. One of the best ways to achieve this is by signing up for your employer savings plan or personal IRA and save a minimum of 10%-15% in a well-diversified portfolio of low cost index mutual funds. Once you have adjusted spending to accommodate your savings goal, it becomes easier to make incremental additions to your monthly savings. Start with your largest budgeted spending category and try to find ways to reduce those items by comparison shopping or finding cheaper alternatives.
Put a Hold on Major Purchases – If you are stressing about money, the last thing you should probably do is purchase that new car or flat screen TV you've had your eye on. Setting limits on spending makes perfect sense if you are worried about your finances and the best place to start is by placing a hold on making any major purchases. Making the decision to make do with the things you have by performing routine maintenance or making small repairs yourself can extend the life of many household items giving you time to save up a nice sized down payment or enable you to pay cash.
Ensure You Have an Adequate Emergency Fund – Having an emergency fund adequate to cover 3-8 months of living expenses can help to ensure you have the resources available to cover the necessary living expenses in the case of a death of a family member or the loss of a job. If you are single and in good health with no dependents then three months of living expenses should be sufficient if you live within your means and have little debt. Families and those that have significant health issues will obviously need a much larger emergency fund.
Automate Your Finances – Paying bills can be a big time consumer but it doesn't have to be. Setting up your bills for auto-pay will not only save you time but also money in potential late fees. Most banks have free automated bill pay service and once you setup your bills for auto pay why not keep the momentum moving in the right direction by automating debt payments, retirement account investments, emergency fund contributions, college savings accounts, Christmas Savings account, or a vacation savings account. There are countless opportunities to automate investments and payments which in the end will save you time and take away the worry over paying the bills.
Simplify Your Financial Accounts – Online banking is a convenient way to manage your financial accounts from home or by mobile phone. By combining multiple checking or savings accounts, you can reduce fees and the time required to reconcile and manage several accounts. Most banks offer options to manage your accounts and have a wide variety of services to help you manage your money 24 hours a day from anywhere.
By using these strategies you can be well on your way to improving your financial situation and reducing your money worries.