Millennials and Gen Z suffer from a ‘mental wealth’ crisis

Avoiding financial stress means arming yourself with financial know-how

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As Christmas approaches and the cost of living rises, financial stress is peaking for many young people – and it has been going on for some time.

Nearly three in four Americans under 40 say managing their finances is harming their mental health, according to a new survey from Laurel Road, KeyBank’s digital banking platform. Over 60% feel “constantly stressed”.

“Financial stress and anxiety are incredibly common feelings among Gen Z and Millennials,” says Alyssa Schaefer, Managing Director and Experience Manager at Laurel Road. “We see that cultivating ‘mental wealth’ is clearly a priority for many people. “

It means gaining more financial knowledge and implementation of a financial plan so that you can have confidence in the future. Here are five ways to achieve these goals:

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1. Beat your debt in shape

Girl open book on the street

Lewis Tse Pui Lung / Shutterstock

While you might not be able to get rid of your debt anytime soon, there is a lot of pressure that you can take off by putting it in the most manageable form possible.

In many cases, your best bet might be refinance with one of today’s lowest interest rates . Assuming you have a good credit rating , refinancing could help you pay off your loan faster and save you a lot of interest.

2. Create an actual budget

Christmas business red baubles, pen, calculator, garland

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About two-thirds of Gen Y and Gen Z worry about overspending during the holiday season, but only 38% budget.

Consider talking to loved ones about the exchange of homemade gifts, like baked goods or crafts, or agree to skip the gifts and just share in the fun of each other’s company. You will likely find that some of your friends and family are strapped for cash as well.

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If you buy gifts, remember that you can download a free app that will give you money – no points, no travel miles, but real money – when you shop.

Even after the end of 2021, a monthly budget can be a great money and stress management tool. Take out a notepad and write down all your usual expenses, such as groceries, credit card bills, mortgage or rent payments, and retirement savings. This way, you know exactly how much you can spend on the fun stuff each month, worry-free.

3. Prepare for disaster

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If your anxiety stems from imagining the worst-case scenario, like losing a job or not having enough money in retirement, then now is the time to prepare for it.

About 44 percent of those polled in the study say they are striving to save more. However, saving is only part of the picture; you will also want to maximize the money you save.

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Set aside a few savings each month in a high yield savings account he therefore has a chance to grow. Normal chequing and savings accounts offer virtually no interest.

Experts suggest keeping enough cash on hand for three to six months of spending, if possible. Knowing that you have a secure reserve for emergencies like dental work or expensive car repairs can help bring peace of mind.

However, you’ll also want to make sure you’re investing for the future – and the best thing you can do is start early. Even a small amount can turn into a fortune over time, so consider using an app that lets you invest with just your “spare currency”.

4. Ask for help

Depression consultation.  Desperate man recounting his unhappy life as a professional psychologist takes notes during a meeting in the office.  Selective focus

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Don’t be afraid to talk to someone if your financial anxiety gets out of hand, whether it’s a mental health professional or a financial planner. Building “mental wealth” goes both ways.

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A good financial planner review your situation and help you achieve your goals, such as planning for retirement, managing your investments, and settling your debt.

Just keep in mind that they won’t directly address your emotions or traumas about money.

If you can find one, financial therapists specialize in both mental health and money. They can help you rethink your relationship with money, manage your coping behaviors, and even come up with the right spending plan.

5. Find other sources of wealth

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ImYanis / Shutterstock

If your 9 to 5 isn’t making enough money for your comfort level, try taking control through other means, like starting a side business or investing.

It used to be quite difficult to turn a hobby into a real lucrative business, but nowadays digital marketplaces can help you find enthusiastic buyers. You can work as a mystery shopper , reviewing products and services, or earn gift cards watching videos online.

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Don’t have extra time to waste? Investing is always an option.

Again, you don’t need a bachelor’s degree in finance or thousands of dollars to get started. Some investment apps will allow you to pay low or no fees, and even give you money to use them .

Assuming you are comfortable making your own investment decisions, free trading apps can be a great way to lower your costs and maximize your profits.

This article was created by Wise Publishing. Wise is dedicated to providing information that helps readers navigate the complex landscape of personal finance. Wise only associates with brands he trusts and believes may be of use to the reader. This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

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