A few years ago, I found myself drowning in a sea of bills, debt, and constant worry about money.
Every alert on my phone made my heart skip a beat, fearing it was another overdue notice. I felt trapped, stressed, and emotionally drained.
But you know what? I clawed my way out.
And I didn’t do it overnight; it began with changing my habits.
If you’re in a similar boat, know that you’re not alone and there’s a way out.
Here are 7 habits that helped me free myself from the emotional grip of financial stress, and they can help you too.
1) Set a budget
The first step to reclaiming your financial peace of mind is setting a budget. Now, I know what you’re thinking — “Budgets are restricting, complicated, and frankly, a bit boring.”
I thought the same until I found myself stuck in a loop of endless debt and bills I couldn’t pay. That’s when I realized a budget isn’t a constraint; it’s a roadmap to freedom.
I started simple, listing out my income and dividing it up between the things I wanted to spend on, down to the last cup of coffee. Seeing it all on paper was an eye-opener.
For the first time, I had a clear picture of where my money was going and how much I actually had to work with.
Then, I prioritized. I thought hard about which expenses were really necessary (do I really need to have *that many* frappuccinos?) and cut down to the essentials.
By sticking to my budget, I felt a weight lift off my shoulders each month as I started to have a little extra money at the end.
And let me tell you, there’s no better feeling than having some financial breathing room for a change.
2) Track your expenses
A budget is like a diet plan, and we all know how easy it is to cheat on a diet if you’re not paying attention. That’s where tracking expenses comes in.
I used a simple app to record every dime I spent, whether it was a $100 grocery trip or a $2 pack of gum.
At the end of each week, I reviewed my list of expenses and matched them against my budget.
The reality was sometimes shocking. I never realized how much I was overspending on little things like takeout or subscription services I hardly used.
With this newfound awareness, I began to make smarter spending choices. Each avoided expense felt like a little victory against the financial stress that had been suffocating me for so long.
Before I knew it, these small wins began to add up. The financial stress didn’t disappear overnight, but I felt more in control, and that was a big deal.
I encourage you to start this habit as soon as possible, even if you don’t have a budget set yet. You might not like what you see at first, but you can’t clean up a mess you don’t know exists.
3) Build an emergency fund
One of the major sources of my financial stress a few years back was living paycheck to paycheck, knowing that one unexpected bill could throw everything into chaos.
That’s why building an emergency fund was a game-changer for me.
This is essentially a financial cushion that can cover at least three to six months’ worth of living expenses. It’s your safety net when life throws a curveball your way, be it a medical emergency, car repair, or sudden job loss.
To build my emergency fund, I started by setting aside a small, manageable amount from each paycheck. Even if it was just $20, it was still progress.
I put it in a separate account to avoid the temptation of spending it. Over time, this small act of setting money aside turned into a considerable sum, giving me peace of mind that I’d never felt before.
You’ll be amazed at how much stress evaporates when you know you’ve got a financial cushion to fall back on.
It’s like having a spare tire in the trunk; you hope you’ll never need it, but you’ll be so grateful it’s there if you do.
4) Avoid impulse spending
You know that rush you get when you see a flashy “Sale” sign or snag a trendy item you’ve been eyeing? Yeah, I used to live for those moments.
But when I was buried under financial stress, those impulse buys were more like quicksand pulling me deeper into a pit of anxiety.
To overcome this, I made a pact with myself: whenever I felt the urge to make an impromptu purchase, I’d take a step back and give myself a 24-hour cooling-off period.
More often than not, after the initial excitement wore off, I’d realize I didn’t actually need that item.
But let’s be real; it wasn’t easy at first. The urge to splurge can be strong, especially when you’re feeling down and shopping feels like an instant mood booster.
Yet, every time I successfully resisted the urge, I felt a different kind of high — the high of taking control and making smart financial choices.
5) Pay off debts
Debt is a heavy chain that can make your financial worries feel like a never-ending loop.
A few years ago, my debts felt like a mountain I could never climb. Credit card bills, student loans, you name it.
But I realized that being paralyzed by the enormity of it all wasn’t going to get me anywhere.
So, I started small. I listed all my debts, from the smallest to the largest, and focused on paying off the smallest one first. Each time I cleared a debt, no matter how minor, it felt like a win.
The emotional lift from these small victories fueled my motivation to tackle the bigger debts.
This is actually a debt repayment strategy called the “debt snowball method,” which involves paying the minimum on all debts while focusing on clearing the smallest one.
As each debt is paid off, you roll the amount you were paying into the next smallest debt, creating a snowball effect.
It’s a long journey, and I won’t say it’s easy. But each account that reaches zero helps buy back peace of mind, one payment at a time.
6) Review your finances regularly
Let’s face it, when money is tight, the last thing you want to do is sit down and look at your bank statement. It’s like poking at a sore tooth; you know it’ll hurt, but you also know you need to address it.
I too was guilty of “financial avoidance.” Ignorance seemed like bliss until I realized that not knowing was far more stressful in the long run.
So, I took the plunge and made a commitment to review my finances regularly. Every Monday, I set aside time to go through my spending, review my budgets, and track my progress toward my financial goals.
And guess what? The more I did it, the less it hurt. Knowledge truly is power.
Regular check-ins with my finances helped me to spot problems before they got out of hand. Overdraft? I caught it early. A subscription I forgot to cancel? Nipped it in the bud.
These check-ins became a kind of financial self-care, an empowerment ritual that helped me gain control over my money and, consequently, my emotional well-being.
The truth is, what you avoid controls you. So, take the reins and make reviewing your finances a non-negotiable habit.
7) Educate yourself
I used to think that financial literacy was something for accountants and Wall Street folks. I couldn’t have been more wrong.
The day I decided to educate myself about money was the day I really started to reclaim my emotional freedom.
I felt ridiculous at first, because I didn’t even know where to start — so I just typed in “how to manage money” into Google.
But you know what? That’s a good a start as any. I went on to read articles, watched videos, listened to podcasts, anything that could make the complicated world of finances a bit more understandable for an everyday person like me.
And you won’t believe how much free information is out there! Understanding terms like “interest rate,” “credit score,” and “investment portfolio” didn’t just make me smarter about money; it made me smarter about life.
Slowly but surely, I became my own financial advisor. I learned how to make my money work for me, instead of me constantly working for my money.
So, don’t shy away from learning; embrace it. Your future self will thank you, both financially and emotionally.
Take control of your finances, take control of your life
There you have it — 7 habits that helped me break free from the emotional grip of financial stress.
Each step, from budgeting to self-education, didn’t just put more dollars in my pocket; it gave me peace of mind.
You too can take charge of your financial destiny and, in turn, your emotional well-being.
Start with one habit and build from there; the journey to financial freedom is a marathon, not a sprint.
Trust me, the emotional payoff is worth every effort.