For anyone who buys groceries, drives a car, purchases home supplies, has children or pets, enjoys entertainment, longs for travel, or you know, lives life, you’ve probably been burdened with the rising costs. Reports show that the majority of Americans are feeling the mental toll of these increases: According to the monthly poll done by the American Psychiatric Association (APA), 90% of Americans have expressed anxiety about inflation, which is up 8% over last month.
And for most of us, rising price points mean more strategic budgeting practices. While practicing smart budgeting is essential anytime of life—good or bad—it becomes even more critical when money gets tight.
And for those worrying, “budgeting” doesn’t automatically mean trimming down or cutting out every expense that’s not a top line essentials (food, shelter, and the like). In fact, most experts will encourage you to make room for the things that support your well-being, as a healthy body and mind are critical during stressful times.
So we pulled together some of our favorite budgeting tips and mindset shifts from top experts that you can use right now.
When’s the last time you’ve checked your bank account or your bills? It’s normal that the simple thought of it can make you feel a little uneasy. But the more you do it, the easier it will become.
As part of this process, lay out the things that need to be paid regularly: Rent, groceries, utilities, credit card bills, tech expenses (like your cell phone and wifi), loan payments, and other essentials. The sum of this is considered your baseline and the itemized allocations are non-negotiables.
Any money left over, is what you can put into savings or spend.
After you sort out the basics and establish what money is available for spending, be smart about where your money is going. Invest in the things that bring joy and well-being to your life—not things you may later feel guilty about.
“Knowing your values for your life is one of the most important actions you can actually take for your financial health. Without these values, you set yourself up for spending patterns that don't feel good,” says financial coach Brianna Firestone.
Essentially: Spend some time thinking about what you want out of life, what makes you happy, and what things can help you get there. “When you know your values for how you want to live your life, suddenly you have a natural system for making decisions. Whether you need to make a choice between making upgrades to your home or moving money into your savings—your values will help you make the right decision,” she says about having a value filter. “When making money decisions (or life decisions), simply ask yourself, ‘Is this in alignment with my values?’ This question will guide you down the right path to making the selection that supports you and your life.”
If moving your body supports your well-being, then a gym membership expense no longer feels superfluous. If bettering your nutrition is one of your priorities, then spending money on fresh fruits and vegetables no longer seems like an indulgence. You can apply this mindset to any area of your life. Need help deciding what your personal values are, or which ones are most important? Read more.
Let’s just call it like it is: Money is emotional, and pretending it's not only stunts our relationship with it. One of the best things you can do to better your understanding of your own personal finances is to understand your own financial hangups.
"Unfortunately, neither financial literacy nor emotional literacy are taught, so when these feelings come up, we don't know how to deal with it," says Bari Tessler, a financial therapist about financial anxiety. "And after you've used money to provide your basic needs—food, clothing, shelter—money issues are no longer just about money. It is always about other deeper stuff."
There’s no way to magically heal your relationship with money. Just like it takes time to rekindle a friendship that’s been neglected for years, this journey will take time and be unique to you. But a great place to start is simple mindfulness practices.
When you pay rent, how does it feel at the moment? Do you have anxiety about going to the grocery store? Does buying something for yourself bring on waves of guilt? Acknowledge those emotions, validate them, and understand that feelings are a natural part of the financial process.
"There's a lot of emotional baggage and junk that comes along with financial decisions, so we end up just ignoring it or make choices that don't take everything into account because we are trying to avoid something," financial coach Lynne Somerman about financial decision-making.
And then, says Somerman, when you are forced to make a decision, it might not be the best one for you: "Eventually you'll put things off enough, and then when you have to make a decision, you are reacting—you probably think, I don't know if this right decision but I need to make some decision," she says.
In times of financial stress, it’s hard not to get down on yourself. In a society where we are encouraged to equate monetary value to social and personal value, this can be a struggle. As Megan McCoy, a financial therapist, explained to mbg: divesting your self worth from your bank account will make you happier in the long run. Not only that but it can help you get a clearer picture of where you should actually be spending your money.
A 2017 study in the Personality and Social Psychology Bulletin backs up this observation with some initial research. In it, hundreds of participants from different backgrounds journaled about their financial stressors. In the end, those who connected finances to self-worth wrote in a way that hinted at negative psychological consequences, such as "feeling less autonomy and control over one's life, and experiencing more financial hassles, stress, and anxiety."
By establishing a boundary between you and your money, you have more control over it. And what is budgeting other than having control over your finances, no?
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