America’s biggest source of stress is without a doubt money. With credit card debit reaching over $1 trillion and student loan debt jumping 150% in the last decade, this should come as no surprise.
Studies show that poor financial health leads to poor mental and physical health. Americans struggling with their finances are more likely to not get routine check-ups, skip preventative health measures, and avoid exercise.
On top of necessary preventatives, those in a financial slump may suffer from depression, anxiety, migraines, ulcers and digestive issues, high blood pressure, and disruptive sleep. All of these health concerns cause additional financial expenses and added stress.
If this is sounding all too familiar, know there are ways to shape up your finances to benefit your life. Start by creating realistic financial goals. You should have three types of goals: short-term goals, midterm goals and long-term goals.
A short-term goal is one you could achieve within a year to three years. The short-term goals are critical to taking control of your budget, adjusting your spending habits, eliminating credit card debt, establishing an emergency fund (less than 50% of Americans have $1,000 in an emergency fund), and creating a habit of saving.
Simple adjustments can make you feel more secure and give you a peace of mind. Take advantage of BALANCE, our financial wellness partner, to learn more about your spending habits.
Midterm goals are your mid-range goals that could take three to 10 years to achieve. This goal range is more ambitious than the short-term goals and will need to be SMART (specific, measurable, attainable, realistic, and timely) to eliminate potential frustration.
Ideas for goals include saving up for a down payment on a house, paying off student loans, starting a business, paying for a wedding, starting a college fund for kids, or taking a dream vacation. This would be the stage to get your financial counselor or advisor involved to guide your strategy.
Lastly, a long-term goal is a goal that takes more than 10 years to achieve. For example, a common long-term goal is ensuring a comfortable retirement. Though this is a long-term goal, you will create short-term and midterm goals to achieve this.
Other long-term goals include paying off a mortgage, living debt free, taking a once in a lifetime trip, and building an estate.
By taking control of your finances and creating goals, you can reduce the amount of stress in your everyday life. You’ll increase your well-being and gain energy and stability to reach your life goals.