Saving, Your relief from Financial stress

Alicia Nelson-Bell, Finance Intern

A whopping 77% of Americans report experiencing money related stress, which puts it among the top things stressing Americans out. This financial stress has been shown to affect all aspects of our lives, including physical, mental/emotional, relationships and our performance at work. With all the different aspects of our financial well-being to be concerned about, you may be wondering what can be done to help decrease the stress and worry felt around finances.  I'm sharing why saving money can help bring you greater peace of mind, rather than being things that add to the money stress you may be experiencing. 

How can saving be a source of so much relief from stress when having the money to save can be so hard for many people?

• In a recent study, 66% of adults say they are stressed about money because they don’t have a three-month emergency fund and 46% of adults are stressed about money because they don’t have ANY money set aside to cover unexpected expenses. “This may be why 43% of Americans labeled unexpected expenses as their biggest concern. (Carter, S.)” Many people hear the recommendation from experts to have 3-6 months of their expenses saved for emergencies and that adds to the stress they are already feeling around money because they then set a goal of when they are going to have that money saved by and then they see that the amount they would need to save is unrealistic with their current income and expenses.

When thinking about saving for emergencies it is important to remember that having something saved is better than having nothing saved for whatever reason (like thinking you could never save enough). Experts recommend 3-6 months’ worth of expenses is a great goal to work towards, but ultimately you should work towards saving whatever amount helps you to “sleep at night”’ and have less stress about money. The following are some simple ways of saving that will help it be less stressful and “hurt less” in your budget:

• Set up with your bank to round up your purchases and put the change into your savings account.
• Make saving a game and have a challenge with a couple of family members or friends to see who can save the most money over the course of a couple of months with a small treat as the reward courtesy of those who didn’t save as much.
• Put $20 into savings each week. At the end of the year you will have over $1,000 saved.
• Choose an amount to save each day and then increase that amount by 50 cents each month (Ex: $1 a day in January and then $1.50 a day in February and so on).
• Save every single $5 bill you get when you get change from paying in cash. (BrightSide)

Pick one or two of these tips to help you start where you are to get money saved for emergencies and you will see that saving money doesn’t have to be as stressful and having a cushion built up, even if it is small, will help decrease the stress you experience around finances and life in general.

Once you pick one or two of these simple savings strategies, come up with a plan of exactly how you are going to make it happen. Try automating some of these strategies, so you don’t even have to think about it and remember to do it. Then you also only have to commit to it once. Or when will you plan to contact your bank to set it up to round up your purchases to the next dollar into your savings account? If you commit to saving a certain amount per day or week, what are you going to do to free up that much money in your budget and will you set up automatic transfers or will you set a time on your calendar to remind you to manually do it?

Try a strategy out for a little while and see how well it works for you in increasing your savings and decreasing your financial stress and if it isn’t working very well for you then try another one. If you want more simple tips for saving and freeing up money in your budget, check out our recently updated Slashing Expenses resource.
 
Citations:

• Bright Side, 3 Easy Money-Saving Tricks That Work for All Ages, YouTube, Jan 28 2021 retrieved Sept 14 2021
• Carter, Shawn. CNBC 30% of Americans are ‘constantly stressed out about money- but you don’t have to be, Mar 20 2018, retrieved Sept 14 2021