Depending on the study cited, it’s now estimated that roughly 75 to 85 percent of adults are being impacted by financial anxiety. Credit industry statistics go on to say that credit card debt is a major component of their debt anxiety. Dealing with anxiety is bad enough but having too much debt is causing another problem for American adults: losing sleep.
As might be expected, individuals with the highest debt levels are more prone to losing sleep than those with fewer debts. However, since not everyone reacts the same to anxiety, even someone with moderate debts could be experiencing sleep deprivation.
If you explore the different surveys now commonly cited for their information on the relationship between sleep deprivation and debt, one common indicator is that reducing debt is essential to restore healthy sleep patterns.
In addition, it’s important to note that poor sleep patterns tend to reduce productivity both at home and work. Debt and sleep deprivation also lead some people to use drugs or alcohol in an attempt to fall asleep faster and sleep longer. That’s not generally helpful and may well lead to other health issues developing.
So, how can people saddled with too many debts get past that problem and get better sleep at night? Financial experts routinely recommend some strategies to overcome debt and, as a result, get back to sleeping properly.
Understand the Root Cause of Your Worries
There are several types of debt, and one or more of them may cause a person’s debt anxieties. That means it’s important to examine your debts and determine which ones are creating the most anxiety.
If, for example, a person’s primary debt concern is making mortgage payments, it’s important to tackle that issue first. If the anxiety is over credit card debts, focus on the steps necessary to eliminate that debt. Regardless of the source of your financial anxieties, the first step will always be to identify the problem.
Set Up Automatic Payments
The next step is to make sure specific payments are made automatically every month. Whether that’s the mortgage, car payments, or credit card payments, setting up automatic payments ensures the payments will be made on time every month.
Remember that making minimal credit card payments won’t significantly reduce the balance, so make sure the payments are sufficient to cover interest and some principle every month. Doing so will reduce the balances owed faster.
Don’t forget to pay yourself every month. That means a specific amount should be automatically transferred to a savings account. Saving money is always important even when financial pressures might lead you to use every dime of earnings to reduce debts. While that might be necessary in some situations, most people can afford to save at least a small amount every month without endangering their credit ratings. That leads us directly to the next step.
Establish an Emergency Fund
The Federal Reserve recently issued a report stating that 44 percent of all adults could not afford to pay an unexpected $400 bill. That’s a startling statistic and indicates systemic problems in our culture. However, establishing an emergency fund now will make it far easier for anyone to pay an emergency bill in the future.
Establishing an emergency fund isn’t easy for many people and may require some sacrifices. However, skipping a couple of nights out every month or cutting back on entertainment spending can provide the cash needed to establish an emergency savings account that will make it easier to pay unexpected medical or care repair bills. That, in turn, will reduce the worries people have about paying bills and make it easier to sleep.
Create a Workable Budget
Financial experts always recommend having a workable budget in place. Far too often, people set up a budget but don’t stick to it. When a budget isn’t realistic, there is no way it’s going to work for long. If setting up a budget is proving difficult, don’t be afraid to ask for help. There are agencies almost everywhere that provide residents with the advice needed to come up with a workable, realistic budget.
Why is a budget necessary? Simply put, if you don’t really know where your money is going every month, there is no way to correct spending issues. It’s far too easy to tap the ATM when you run out of cash without considering where that cash is going.
Know where your money is spent. That doesn’t mean you have to track every bottle of soda or cup of coffee you buy, but budgeting does mean you know how much you can actually afford to spend on those types of products every month.
Avoid Large Purchases
Given the number of ads people are exposed to every day, it’s easy to assume everyone is buying new cars, furniture, or electronics on a regular basis. That leads to a feeling that you, too, shouldn’t be afraid to purchase a new television or trade in that two-year-old vehicle for a new one.
However, if you’re already losing sleep over debts, that’s not a good idea. Today’s vehicles, for example, are designed to last for quite a few years with minimal maintenance or repair expenses. Avoiding the temptation to spend money on major purchases is an important strategy for reducing financial worries and restoring proper sleep.
Of course, there are times when making a large purchase is unavoidable. If, for instance, a refrigerator stops working and would cost too much to repair, purchasing a new appliance is necessary. However, it’s not necessary to spend $3,000 on a top-of-the-line appliance when a $1,000 refrigerator would be adequate. Being financially responsible is the objective here, so don’t spend more than necessary.
Reduce Other Stresses in Life
While financial stress is significant, there are other stresses in life that contribute to sleep deprivation and other health issues. Job-related stress is a good example of stress that can be reduced if the correct steps are taken. Since every situation is different, there is no one-size-fits-all solution to reducing job stress, but there are always ways to minimize that type of stress.
In the event there is no realistic solution for a specific issue, it may be time to eliminate that situation. If you’re over-committed to outside activities, it may be necessary to eliminate one or more activity. While volunteering is often seen as a way to reduce stress levels, volunteering too often may actually increase your stress levels. Find a balance that works for you.
Another issue today is our 24-hour news access. If watching too many news programs is raising your stress levels, reduce or eliminate the time spent watching news programs. Again, too much stress often leads to the abuse of alcohol or drugs as a way of relaxing and sleeping after watching anxiety-inducing programs. Those crutches are expensive, and spending that money leads to additional financial stresses.
Remember You Won’t See Results Overnight
It takes time to build up debts, and it will take time to eliminate them. Eliminating your debts will not happen overnight or even in a few months. Financial experts generally counsel people that reducing debt slowly is the most effective approach to recovering your finances and, at the same time, improving your health.
If people are able to see a light at the end of the tunnel, they’re more likely to stay on track and keep making the sacrifices needed to dig themselves out of debt. Knowing that debts are being reduced every month rather than growing is generally enough to help people sleep better.
There are some strategies to speed up the process. In most instances, credit counselors recommend eliminating the costliest debts first. For example, if one credit card charges 28 percent interest while another charges 16 percent, it only makes sense to pay off the high-rate card first.
Evaluating your debts carefully makes deciding where to focus your repayment priorities easier. Make a list of all credit card debts and look at the interest rates. At the same time, list other debts to determine which ones are costlier. Always focus on getting rid of the more expensive debts first.
Sell Assets When Possible
In some cases, it makes sense to dispose of some assets that are creating financial issues. If, for instance, you’re making payments on two vehicles, explore the option of eliminating one of those vehicles. Consider using public transportation or biking to work if those options are realistic.
If you’ve purchased expensive toys like boats, jet skis, or ATVs, consider getting rid of them to eliminate a payment. While having toys is nice, making payments on them can greatly increase your stress levels and exacerbate sleep deprivation problems.
Getting Started Isn’t Always Easy
If your debts are creating personal or health problems, taking steps to reduce the associated stresses is going to be important. Your well-being depends on doing whatever it takes to make it possible to sleeping normally again. Take the time now to evaluate your debts and determine what strategies will work to reduce them. If you need professional financial advice, now is the time to ask for help.