For many Americans, financial issues can be a great source of stress. The American Psychological Society even reveals that 72% of adults are stressed about money, especially in relation to debt or rent. Such high levels of stress can bleed into every aspect of your life, thus causing damage to your mental and physical health. For instance, financial stress may tie you to an unsafe working environment. Some workers may choose to stay in toxic working environments because the fear of living without income takes precedence over their psychological safety. In worse cases, individuals may even delay spending on things they need, such as healthcare, for fear of cutting their expenses.
However, your reaction to financial instability isn’t the only thing you need to control. You can also reduce stress by planning out your money in such a way that you’ll no longer need to depend entirely on work for financial security.
Benefits of a financial plan on work-life balance
A financial plan is a strategy for achieving a set of financial goals based on an assessment of an individual’s current income and expenses. For a person aiming to get out of debt, a financial plan takes a look at how much they earn and spend within a certain time frame (such as a month) then determines which expenses they can cut down so they can allocate more funds for debt repayment. Other examples of financial goals include building a fund for retirement, buying a house, setting aside money for education, marriage, or even saving for travel.
Having a financial plan gives you a clear picture of how much you need to work to achieve a certain goal. Let’s go back to the example of the worker trying to pay off debt. If this person did not have a financial plan, they might end up exerting more hours at work to scrounge up more money for debt repayments. However, if they had a clear picture of where their money was going, they would only have to perform the amount of work necessary to earn enough for their monthly income goal. Since they feel secure financially, they will be able to set work aside and focus on the other aspects of their life.
As long as you have a clear picture of where you stand financially, you suffer a lot less mental stress. Because your mental health is in good shape, your physical health, too, improves. This then allows you to perform better at work.
How to get started
The first step to creating a financial plan is to identify your goals. Once you know what you’re saving for, determine how much you earn and spend each month. Then, figure out where you can cut down or increase your spending. If you want to create a spending plan that suits your current situation but still maximizes steps towards your goal, you can seek assistance from professionals with degrees in accounting. Their education in strategic accounting, data analytics, and financial research can help you understand how best to manage your expenses.
Professionals with backgrounds in financial analysis can also help. On top of helping you with your spending, a financial advisor may also be able to help you select the right investments to maximize the growth of your wealth. The cost of hiring a financial advisor can run from $100 to $2,000, depending on how comprehensive their services will be.
Having a financial plan won’t just improve your financial health. A clear financial plan can help you reduce stress, improve mental wellbeing, and fight risks against physical health. With the right financial plan, you can achieve a good work-life balance.
Exclusively written by Jolene Blanc