It’s hard to fix a problem without knowing what the cause is. There are many ways money can cause stress, but they often fall into three categories:

A) Stress about not having enough to cover today

• Not being able to pay your bills on time
• Feeling overwhelmed by debt

B) Stress about not being prepared for the future

• Worry about yours and your children’s financial future
• Not feeling prepared for retirement 
• Not sure how you would cover a big or unexpected expense

C) Stress about not feeling in control

• Difficulty keeping track of everything
• A feeling of shame that you are stressed about money when others around you don’t seem to be

All of these are understandable and common reasons to worry. But that doesn’t mean you have to continue worrying. Work out which of these areas is causing you the most stress and see if our suggestions below can help relieve some of the stress.

If you most identify with A) Stress about not having enough to cover today:

If your stress is mostly about the fact that you feel like you don’t have enough money to make it through the month, it’s time for the ‘b’ word: budget.

While it might not seem like a ground-breaking solution to your problem, changing your attitude towards budgeting can hugely improve your confidence by giving you clarity about where your money is going and where it needs to go. It can help you see if there are any areas where you could make the most of your income.

If your expenses are higher than your income, we’ve got a handy guide to help you find ways to cut costs. Sometimes savings might come from unexpected places, like renegotiating bills or consolidating debts at a lower rate.

If you feel B) Stress about not being prepared for the future:

Most of us don’t like unknowns. Worrying about the future is human nature – but there are steps you can take to prepare yourself for the ‘what ifs’ in life, as well as long-term goals like a nice retirement.

Start by working out how much you might need. For emergency funds, we recommend having three months’ of expenses set aside in savings. Look at your current monthly bills and multiply by three to work out what you should aim for in your emergency fund. If this feels impossible, start by working towards a $100 emergency fund, and then towards a $500 fund. You don’t have to do it all at once – it could take a couple of years to build up your emergency buffer. Work out what you can afford to put towards your emergency fund each month and set up an automatic transfer so that it happens automatically on payday. Don’t stress if you have to dip into this fund if something unexpected comes up – that’s exactly what it’s for!

And if it’s more like C) Stress about not feeling in control:

Sometimes you stress simply because money feels too hard and overwhelming. If you want to tackle this stress, you should start by taking a hard look at exactly where you stand financially today. You can find out your Financial Fitness Score via our calculator here as a first step.

Worrying about paying bills on time can be a major contributor to money stresses. Take back control by automating as much of your finances as possible. Use a budget template to make a note of all the days you have money coming in and going out. Setting up automated monthly bill payments with your utilities provider, smartphone provider, and internet provider could save you hours of stress every month going forward.

Setting up another bank account can also help you separate your cash for bills from your spending money. If you have an account just for the things you know you will have to pay, like electricity, phone, mortgage or rent, you won’t have to do mental math every time you purchase something. Every payday, transfer enough money to this account to cover these expenses and direct payments can do the rest of the work for you! This means the money in your everyday account is yours to spend. 

Remember: sunlight is the best disinfectant

As with any type of stress, talking helps. Money worries won’t disappear just because you push them to the back of your mind. If you’re anxious about your finances, tackle your concerns head on. It's normal to feel uncomfortable to talk about your finances and this can make it difficult to open up about. The good news is that you’re not alone: Salary Finance survey data from June 2020 found that about three quarters of people are stressed about money -- so your friends and family probably can sympathize with the position you’re in or the concerns you have. If you have a partner, open up to them before your money worries spiral. If you live alone, share your concerns with someone you trust. Your friends or family will also be able to help you look at the problem objectively.

Here are some extra tips:

Be realistic

Planning to overhaul your finances and reduce stress is a great idea, but it’s all too easy to be overly optimistic about the amount you can pay towards debt or boost savings. It’s better to consistently achieve a small target, than to beat yourself up because you didn’t reach a too-ambitious one.

Reward yourself

Remember that the goal is to change your habits, not drain the fun from your life. When you set your savings goals, set the rewards you’ll give yourself at the same time. If you successfully reach a goal, like saving the $15 you would usually spend on lunch, maybe your bargain with yourself is that you get a $3 coffee in celebration! 

Don’t beat yourself up

You’re not a bad person if things don’t go perfectly according to plan. Look at what went wrong and see if you can plan for next time this happens. Regularly review your progress and if you find things aren’t quite working, adapt.