A new study has revealed that a significant number of Americans' personal finances are so dire that they are stressed enough to miss work. This can cause further anxiety, as poor attendance and low performance have the potential to compromise job security and income.
The 2016 data published by Northwestern Mutual showed that 85 percent of adults in the U.S. have financial worries. Of these, 28 percent admit to daily anxiety, while 67 percent say their concerns are so great that they affect their health. One of the largest causes of stress is unplanned expenses, but many Americans also worry about everyday living costs.
For most people, there is no easy fix, but there are some methods to help ease stressful circumstances:
- Build an emergency fund to help pay for surprise costs. In general, households should try and save enough to cover between three and six months of expenses.
- Creating and sticking to a budget can also help reduce stress levels, as it gives you a sense of achievement and improves your ability to manage your money. Once you've made a budget, it can be updated regularly to take into consideration monthly fluctuations.
- Finally, you should prioritize saving for retirement. Currently, anyone under fifty years old can contribute $5,500 to an IRA and $18,000 to a 401(k) per year. Putting just $200 into savings per month will create $35,000 over a decade with an 8 percent annual return.
Worrying about money is nothing new. However, if you notice your personal finances having a negative impact on your daily life, it is essential you take steps to reduce your financial stress.
Let the free MoneyTips Retirement Planner help you calculate when you can retire without jeopardizing your lifestyle.