It’s no secret that there is an existing link between one’s finances and mental health. In fact, financial stress can lead to a sharp decline in one’s well-being. In turn, a decline in mental health can lead to even more financial stress. If you find yourself caught in this endless loop of declining mental and financial health, below are four things you can do in order to break the cycle.
What constitutes financial hardship?
There are many things that financial stress encompasses. According to the Financial Consumer Agency of Canada, almost half of the Canadian population has lost sleep due to personal financial problems. These financial concerns include, but are not limited to, debt, living paycheque to paycheque in fear of unexpected expenses, being unable to save money, and living with high household expenses.
Steps for getting yourself out of financial hardship
It’s not uncommon to experience financial hardship throughout one’s life. You are not alone, and even though you may feel like you may never be able to rid yourself of your burdens, rest assured that there are a few things you can do to help your situation:
1. Get organized
The very first step in ridding yourself of your financial stress is by getting organized. Of course, when talking about organizing one’s finances, the very first thing that should come to mind is to create a budget. To create a comprehensive budget, you need to note how much net income you have coming in. After identifying your net income, track all of your expenses, including your fixed expenses (rent, car payments, cell phone bill, etc.) as well as your variable expenses (groceries, entertainment, gas, etc.).
Once that’s done, see if you can make any changes to your spending habits or if you can make any changes to your fixed expenses, like finding a less expensive phone or internet plan, or cutting down on food costs by planning your meals ahead of time.
It’s also important to track all of your monthly bills to avoid paying extra fees that incur from not paying your bills on time. See if your online banking allows you to set up payment reminders or if it lets you schedule your payments.
2. Set financial goals
After creating your budget, you should have a clearer sense of what you’re working with. More importantly, you’ll know exactly how much money you’ll have left over after paying all of your expenses. You will then be able to set financial goals like setting a certain amount of money aside as savings or putting more money towards your debt. If you’re juggling multiple debts, there are a couple of strategies you can try, but the one that makes the most mathematical sense is to prioritize the debt that has the highest interest rate. It’s important to set short-term as well as long-term goals, so that each time you’ve achieved one, you’ll feel more motivated to continue.
3. Look into plans that your workplace offers
Although it’s important to try to get yourself out of financial hardship, it’s equally important to avoid it altogether. In order to do this, it’s important to look into plans that are offered by your workplace like pension plans, and health plans. These plans may help you avoid financial troubles and unforeseen expenses down the line.
4. Get expert advice
If, after doing all of the above, you still feel like there’s no way out of your difficult financial situation and that your mental health is steadily declining, contact a Licensed Insolvency Trustee (LIT) as soon as possible. A Licensed Insolvency Trustee will examine your financial situation and will be able to determine which solution is right for you. These solutions can include debt consolidation, personal bankruptcy, consumer proposal, voluntary deposit, or even a simple budget reorganization.
One thing is for sure — your LIT will ensure that you will relieve yourself of your financial burdens so that you can rest easy once more.