Feeling stressed about money can affect your whole life – just look at the people who signed up for Squid Game. Try this strategy to conquer your money troubles and get your life back under control.
When you’re stressed about money it’s hard to think straight. Everything in your life feels basically hopeless. Money feels like it’s tied to everything in your life: your relationship, your job satisfaction; your dreams; even your very sense of happiness.
There’s a reason the contestants on Squid Game got themselves into such a monumental pickle. When you’re stressed about money, you literally can’t think straight. When finances are low, you’re so preoccupied with working out how to make ends meet, your cognitive performance is diminished for everything else. That’s why they signed up and why so many went back in again – despite knowing the second time that they were literally putting their lives on the line.
“Financial constraints capture a lot of your attention,” Eldar Shafir, a psychologist at Princeton University told NPR. “Then there’s less bandwidth left to solve problems. Your cognitive ability starts to slow down, just like a computer.”
Like any chronic stress, being stressed about money also affects your overall health. Both your mental and physical health can suffer, especially if you feel like there’s no way out of your depressing financial situation.
If that sounds like you’re stuck inside a vicious cycle, Squid Game-style, stay calm. There’s definitely a way to stop feeling anxious about your finances and return to seeing all that life has to offer. Without being shot at by a creepy over-sized doll.
1. Draw a deep breath
A important way to manage any kind of stress (not just financial) is to learn to control your breathing. The Better Health Channel recommends focusing on switching from rapid upper chest breathing to deep abdominal breathing. The exercise they recommend goes like this:
- Find somewhere quiet where you won’t be disturbed for 20 minutes.
- Sit comfortably with your back nice and straight and your ribcage raised.
- Place one hand on your chest and the other on your abdomen.
- Take notice of how your upper chest and abdomen are moving while you breathe.
- Concentrate on your breath and try to gently breathe in and out through your nose. Your upper chest and stomach should be still, allowing the diaphragm to work more efficiently with your abdomen rather than your chest.
- With each breath, allow any tension in your body to slip away. Once you are breathing slowly and from your abdomen, sit quietly and enjoy the sensation of physical relaxation.
2. Take stock of your financial situation
Now you’re calmer, you’re in a better position to take stock of your finances.
This is a challenging thing to do when you’ve probably been avoiding opening bills for weeks or even months, but be brave and rip off the Band Aid. It’s better to know what you’re facing rather than simply assume. You don’t need to be adding the fear of the unknown on top of being stressed about money.
If you’re feeling particularly vulnerable, it might help to have friend you trust there to support you. If even that’s not enough, get in touch with the National Debt Helpline or a financial counsellor.
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The only sane answer to this question is “no” because you are never playing Squid Game.
3. List all your debts
Once you know where you’re really at, you can work out where you need to go.
Paying off debts should be your number one priority. List everything you owe, to whom and by when. Then write down how much you need to pay to each debtor each month.
It can be extremely daunting to see everything you owe written down so blatantly. In fact, in this moment, you may even be feeling more stressed about money than you were before you started.
Hold that thought. It’s only once you’ve got this list that you can figure out the best strategy to pay your debts down. So think of this list as your first step to taking back control of your finances.
4. Work out a plan
Now you’ve got your list, it’s time to figure out how to cross everything off the list as effectively as possible.
You’ll note I’ve said “as effectively” here, not “as quickly”. There’s a reason for that and it’s called the “snowball method”.
You can find a good overview of this method of debt payment here. The reason I’m recommending it as the first debt repayment method to look at is because it’s possibly just as good a stress reliever as it is debt reducer.
With the snowball method, you list your debts in order of the smallest to the largest and you knock off the debt at the top of the list first.
While other debt repayment strategies might pay your debts off faster, they generally don’t reduce the number of debts you have as quickly as the snowball. When you’re feeling stressed about money, having less people you owe money to gives you an incredibly powerful boost.
And I reckon you could use a boost right now.
5. Get in touch with your creditors
Whatever plan you put in place to repay your debts, get in touch with your creditors. This is especially important if you are behind on your payment terms. Your options are to claim financial hardship and request an extension to your loan or negotiate a payment plan based on what you can afford.
Most creditors will work with you to find a reasonable strategy to get your debt repaid. Remember to get back in touch with your creditor if you find yourself unable to stick to the new terms.
6. Accept your limitations
Having a solid plan to repay your debt will go a long way towards helping you feel better about your situation. You’ll feel more in control of your situation and worried about the unknowns.
The other thing that will help relieve your money anxiety is acceptance of your current circumstances. While we’d all love to have enough money to do whatever we want, whenever we want, the truth is that not many people are living on Easy Street like that.
The truth is, learning to live within your means is the key to feeling less stressed about money for life. If you don’t earn it, you shouldn’t be spending it.
So, once you’ve paid off your debts and celebrated a little, it’s time to go back to steps 3 and 4. But this time your aim is move the money you were repaying your debts with into a long-term savings or investment plan.
That way, you’ll set yourself up to be able to weather life’s storms by building a kick-ass shelter that’s got you covered – not by signing up to a random blood-thirsty game. Hopefully you’ll never, ever need to be tempted.
This article contains general information only. It should not be relied on as finance or tax advice. You should obtain specific, independent professional advice from a registered tax agent or financial adviser in relation to your particular circumstances and issues.