July 12, 2013 by ADEMOLA ALAWIYE Leave a Comment
How to manage financial trauma
Financial trauma is not peculiar to Nigeria it’s a challenge people face in all economies across the world. Unfortunately, it’s rampart in this part of the world.
Because the economy isn’t always where people would like it to be, financial trauma is bound to be part of the people. Thankfully, there are ways to reduce financial stress and rid yourself of this problem.
Financial stress is a problem we all face at least once in our lives. It’s a problem that has caused divorce and even alcohol abuse. Losing a job or making a bad investment can cause panic and stress.
Financial trauma is widespread.
According to a poll by Business Watch , roughly seven in 10 respondents are “very stressed” about money, and only one in 10 report that they are not stressed about finances — and the proportion of people stressed about money is only going up.
With the rising cost of living and unemployment problems, Nigerians are feeling the crunch of financial stress. Experts say this is pretty significant because financial stress is linked to health problems like depression and sleep problems. They say anxiety over money can negatively affect health in several ways-
Unhealthy coping behaviours
People experiencing financial stress can be more likely to numb their anxiety by drinking, smoking, overeating and practicing other unhealthy coping behaviours. This in turn leads to more stress.
Less money or self-care
With less money in the budget, people who are already under financial stress tend to cut corners in areas like health care to pay for basic necessities like food. Small problems can go unchecked and turn into larger problems. This also leads to more stress.
Sleeplessness
When under financial stress, people often experience trouble sleeping, which can add up to a sleep deficit, impairing immune functioning and cognitive abilities, causing additional moodiness, and more.
Unhealthy emotion
Debt can cause unhealthy emotions that can take a toll on health. People can experience anxiety, frustration and a sense of hopelessness as the debt piles up and increasing amounts of money are needed just to pay the interest. This causes additional stress, which compounds with the stress from poor coping and self-neglect, to become a menacing amount of stress. Avoid falling into credit card debt. Use credit cards to help build up your credit score by using only a small portion of their limit and paying them off to avoid interest fees.
It is best to learn financial planning skills early in life to help avoid financial pitfalls. However, to manage financial trauma, the experts say the following instructions should be followe-
Make a list of expenses
Much of financial stress stems from the fact that people often don’t know how much money they’re spending. They go through life blindly paying for this and that without any conscious thought. It’s no wonder so many people are financially stressed. Not knowing whether your pay check will last to the end of the month is scary. That’s why you must make a list of expenses and become aware of your spending habits. Write down absolutely everything you spend money on.
Decide which expenses can be cut or reduced
You’ll notice that not all of your expenses are necessary. For example, you may look at your grocery bill and realise half of your bill is convenience/junk food. Many of your expenses can be cut or reduced by doing things for yourself. Instead of buying pizza every Friday night, make it at home. Excessive materialism brings very temporary satisfaction and contradictorily causes long term stress.
Talk to your family about the new budget
Financial stress can become worse when there are other people involved. It doesn’t have to though. The main reason people fight over finances is because they aren’t open and honest about them. Taking time to sit down with your spouse to talk about the money coming in versus what’s going out can help reduce stress.
Look for ways to earn extra income
Extra money coming into the house is always a good thing. Even if the amount is small, the money can be used to help cover your expenses. If you still have a job, but your hours have been reduced, consider online work. You may be able to make enough money writing or programming to pay a few of your bills.
Re-evaluate your budget on a continuous basis
It’s important to keep reviewing your budget to make sure you’re on track. You may find even more expenses you can do without. It is important to have both short term and long term financial goals. Without this, you are just swimming against the tide. Have a realistic budget and to live within it. This schedule should be structured around the basic necessities such as housing, automobile expenses, etc. but should also allow for occasional splurges. A good rule of thumb is to spend a third of your income, save a third and invest the rest.
Become determined to work within these guidelines and within a relatively short time you will begin to feel the weight being lifted from your shoulders.
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