The pandemic has unrolled a massive amount of stress on people. It has shaken people’s lives socially as well as economically. Companies laying off employees, salary cuts, businesses ran down to the ground, these are to name a few. Many people are still suffering from the financial stress they have incurred. The circumstances have forced people to the brink of debt, and many people have fallen into the debt trap. It doesn’t stop here; the burden has also become a reason for stress and other health problems in people.
People have been facing many difficulties financially. The pandemic has taken a heavy toll on Indians not only financially but mentally as well. As per a study conducted by GOQii before December 2020, the change in lifestyle after corona has led people to feel more anxious and depressed. The research shows that 43% of Indians learned to cope with depression, 26% are mildly depressed, 17% face more strenuous kind, and 6% severely depressed. Even though people have been trying to adapt to the new lifestyle, the second wave of coronavirus has been more dangerous and tricky. It is pushing people to the brink of the debt trap. As per a LinkedIn survey, 40% of Indian professionals became financially unstable. The main reasons were job loss, job uncertainty, and a pay cut.
Now the question is, how can an individual deal with financial stress and overcome it?
Understand and accept
First thing first, you need to understand your financial situation. Every person’s situation is unique; you need to accept your position. You need to figure out how much money is coming in and where your money is going. Make some changes in your lifestyle if needed. One of the most challenging things in such a situation is to accept that you are going through a financial crisis. Understand where and how you have been spending your money till this point. You will also need financial planning and some changes in your lifestyle to go further to manage your expenses.
Take professional advice
We, being Indians, rely on advice given by elders or friends instead of seeking professional advice, and this is where we go wrong. Yes, taking suggestions from friends and family is great, but taking financial advice from people around you could turn out to be a disaster. As mentioned above, everyone has a unique financial situation, so something that worked for your friend might not work for you. Hence, you either find a financial advisor or do thorough research about your current situation and plan accordingly.
Monitor your expenditure
Impulse buying is one of the things which is extremely difficult to control. It takes extreme determination and control to spend in a limit, especially if you are someone who goes to the supermarket to get groceries and come back with products worth your room’s renovation. One of the things that could help you is monitoring your expenditure from the past few months. Analyze the data and understand where you are going wrong or where you can save more. Watch your future spending and budget your income even before it comes; this will help you to reduce impulse buying and overspending.
Plan a debt payoff strategy
Being in debt is extremely burdensome. It brings anxiety and N number of calls from creditors if you are past your payment date. Debt is one of the major causes of financial stress in people. So, the first thing you have to do after analyzing your financial situation is to map out a debt payoff strategy. It can be easy for some people due to small amounts of debt, and proper planning can smoothly get them out of debt. You can read more about debt management and strategies here.
But if you are deep in debt and unable to understand your obligations and map out a plan for yourself, you can try one of the options out of debt settlement, debt consolidation, or restructuring as per your financial situation.
The way forward: Save for an emergency to manage financial stress
We can’t stress the importance of saving money enough; an appropriate amount of saving can get you through some challenging times. Emergency funds are worth six months’ salary. In case of an emergency like job loss, pay cut, medical emergency, or anything, you can use the money without worrying about debt.
In a nutshell, financial stress is strenuous. It can cause mental and physical health-related problems. On one end, where people are managing and coping with financial stress alone; on the other end, FREED is here to help people who are finding it challenging to deal with their debt(s). At FREED, we aim to help debt-burdened people to get out of debt and live a debt-free life by resolving their debts. If you are stuck in the debt trap, and your situation is getting worse, we are here to help. You can reach out to our team of debt counselors on 01246663666 or visit our website to know more about us on http://www.freed.care.