Navigating financial stress is a journey. It took time to accumulate the debt you’re carrying, and it may take some time to get back on sound financial footing. Deciding to tackle your debt and regain your financial independence is a big step. Working on your finances can help reduce stress and get you back to feeling empowered.
Here are six steps you can take right now:
- Take an honest look at where you’re at: It is important to understand your current financial situation to have a clear view of your end goal. Make sure to include all current debt and financial obligations, such as utilities. Once you have a clear picture, you can begin to create a plan to start paying it down.
- Create a budget: Creating a budget is a fundamental step to managing financial stress. Take a close look at the money coming in and compare it against money going out. Allocate funds against all essential expenses such as housing, groceries and transportation first to determine how much additional money you can allocate against your debt.
- Communicate with those you owe: If you’re struggling to meet your financial obligations, reach out to your creditors and service providers to discuss your situation and see if there are any promotions or rate reductions available. Regardless of circumstance, most companies are willing to help, whether it’s through discounts, payment arrangements or temporary relief options. Honest and open communication is beneficial for both parties. Every small win can help boost your confidence, knowing you are heading in the right direction.
- Find new sources of income: When the money coming in is less than debts and bills owing, financial anxiety can start to set in. Finding new ways to generate income may help you bring in additional cash to help cover expenses and reduce stress.
- Seek professional help: Above all else, remember, you’re not alone. There are professionals who specialize in debt management and stress relief. It’s always an option, and seeking professional help, whether an accountant, financial planner or a therapist, can help restore confidence and calm, and should be seen as a sign of strength.
- Practice self-care and stress management: Financial worries can impact your overall well-being. It’s important to take care of yourself so you have the energy to put your strategies into motion. As you begin to reduce your debt and get on top of your finances, it may also help to incorporate stress-reducing strategies — exercise, meditation, spending time in nature or with loved ones. Any activity that brings you a sense of calm and happiness may help.
Whether it’s mounting bills, student debt or concerns about loan payments, financial stress is real and might affect your emotional well-being. Regardless of your circumstances, adopting these effective strategies can help you gain new financial insights and a more secure financial future.
This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.