"Worrying yourself sick" isn't just a figure of speech your mom likes to use—there's a real scientific link between chronic stress and illness. The short version, courtesy of Calm Clinic: When you’re stressed, your endocrine system pumps out the cortisol hormone, which makes it really hard for your immune system to ward off a cold.
For most of us, money stress is the top reason we feel like we need a sick day. Finances are the No. 1 stressor for Americans, according to a national survey by the American Psychological Association. And for people shouldering debt, the health effects are easy to quantify: An APA survey released in early 2015 found that 42 percent of people with high levels of stress lie awake at night, while another 33 percent eat unhealthy foods. Debt-related stress has also gotten in the way of exercising for 29 percent of Americans.
Money stress might be pervasive, but it’s not unavoidable. (And neither is that chronic tension headache.) Lise Andreana, a certified financial planner and author of No More Mac 'N' Cheese!: The Real-World Guide to Managing Your Money for 20-Somethings, explains how we can learn to stop worrying ourselves sick by loving (or at least liking) our financial situation.
What's the biggest reason people can’t stop stressing about money?
Andreana: Debt! Excess debt and the cost of carrying debt are the most destructive forces working against most people experiencing money-related stress. Job loss is a close second, as it can result in an inability to meet financial responsibilities.
For someone who’s really suffering because of debt stress, what’s the best plan of attack?
Andreana: A plan for dealing with the debt can go a long way toward easing stress. You can’t move forward without budgeting—it’s the cornerstone of financial security. And establishing a budget doesn’t have to be difficult. In fact, there are several online tools to help you. I also recommend having two separate bank accounts: one you can access from an ATM and another one that you cannot. The account you cannot access from the ATM is where your paycheck goes and where you make your fixed payments (rent, car, student loans). Then you also make regular contributions to a discretionary amount with ATM-card access.
You also mentioned job loss as a major stressor. How can we alleviate that anxiety?
Andreana: By having an emergency fund in place to meet up to six months of financial obligations.
Even hearing the six-month number can be stressful and overwhelming for some people. Is there any flexibility?
Andreana: It actually depends on how secure your job is. If you're working for a major bank or for the government and you have pension plans and benefits, you don't need as much—a couple months' or a month's worth of gross income would be just fine. But if you're self-employed you might need as much as a year's worth, because when you're self-employed or your job is not secure you could be without income for a very long time.
Saving for an emergency fund seems like such a luxury when you're self-employed or not making a lot of money.
Andreana: It's not always easy, and it takes time. It took my daughter five years to reach her goal of having enough cash to last her six months, but keep in mind it’s not a “one size fits all” approach.