There’s no doubt the COVID-19 pandemic has impacted almost every aspect of American’s lives. As millions of people’s financial situations were adversely affected, mindsets shifted regarding where to invest your money. Across all fifty states, U.S. residents are being forced to reconsider their financial habits. Whether it’s changing investing decisions or figuring out alternate income streams, people quickly learned they needed to adapt. It’s likely that even the most frequent spenders got a bit of financial anxiety, took a step back and reevaluated their budget during these difficult times.
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Reducing Financial Anxiety: Americans Are Saving More on What Matters Most
Overall, Americans say they’re saving more and spending less—but what exactly are they saving up for? Using the search engine analysis tool Ahrefs, we can see that the average monthly Google searches for terms related to saving money in the U.S. revolve around practical concerns like preparing for retirement, buying a house, and saving for a car. On the other hand, saving for a trip and saving for a vacation are both extremely low on people’s list of priorities.
But nobody has to live like that. Take some strategic steps to create a more secure financial situation, and you’ll likely bid farewell to those worries.
Curious about the breakdown of which states are most worried about saving for retirement and home buying according to Google? Mint’s team delves into states’ financial savings-related Google search patterns.
Check out the visual below for a fun and easy-to-read depiction of the top searches related to savings in the U.S. this summer.
Image source: https://blog.mint.com/
3 Tips to Reduce Financial Anxiety
It’s understandable that financial instability combined with the pressure to save money and reach personal financial goals can be a recipe for stress and anxiety. Keeping your finances in perspective within the context of national and global events may help reduce any feelings of anxiousness. Remember that even if your money-related goals are unattainable at the moment, working slowly towards them with a steadfast approach is the best possible course of action.
Below we’ve listed five actionable tips to reduce financial anxiety, while still being cognizant of your savings amidst the current economy.
1. Funnel funds into your emergency saving account
Every bit of spare change that you can muster up should go towards an emergency fund to help you reduce financial anxiety. Nothing will give you peace of mind more than knowing that you’re doing everything in your power to create a nest egg for yourself.
If you already have a solid bank account full of emergency savings, you can still bolster it as much as possible to prepare for any kind of emergency in the future. With so much unpredictability coming up in the next couple of years, why not err on the safe side?
2. Incentivize yourself to stick to your budget
Sticking to your budget can feel like an anxiety-inducing task when you feel like you’re already extremely far away from reaching your goals. Give yourself a boost of encouragement by creating an incentive to stick to your budget. Why not consider including family members who can help incentivize each other and hold each other accountable?
Maybe you decide to plan a fun, budget-friendly outing, or perhaps you choose to set aside funds for a special meal (funds that you can only touch if you stay true to your goal.) Adding an element of enjoyment to the money-saving process can work wonders.
3. Make a financial plan that excites you
When you feel inspired by your own financial future, you’re more inclined to focus on the progress you’re making versus the anxiousness you’re feeling about life’s unknowns. Developing a frugal mindset won’t feel like a chore when you psych yourself up to be genuinely excited about your financial plan.
Create an intentional five-year game plan and allow yourself to get amped up about it. Be sure to prioritize paying back debt—strategizing ways to repay a loan should always be top-of-mind in any financial plan. Also, be sure to consider various influencing factors and don’t rule out working with a certified financial planner if you have that option.
Remember the Big Picture
The pandemic changed life as we know it in 2020, and the long-term financial impact remains to be seen. We hope that this article provided you with some food for thought about the evolving attitudes Americans are having towards saving money in the wake of COVID-19. It’s no surprise that people’s changing financial concerns also relate to people’s sentiments and mental state regarding money.
Even during times when a large scale economic downturn has negatively influenced your life in the short term, it’s important to realize that your financial goals are still within reach in the long run. You might have to make decisions like reevaluating your living situation to decrease the amount of monthly rent you’re paying. Chances are, it’ll worth it in the end. It’s easy to get caught up in the minutiae of recovering from a financial setback and feel like it’ll take ages to bounce back.
The job market may be volatile and the stock market might not be in your favor, but as long as you avoid creating more debt for yourself, you’ll be on the right track. Don’t forget that there are millions of people around the world working through the same challenges. By committing to a more frugal lifestyle, you’ll eventually emerge on the other side of financial hardship stronger.