Financial stress can threaten the mental and physical well-being of anyone, even someone who is usually frugal and financially conscientious. Not all financial stress comes from money mismanagement. Medical emergencies, unforeseen market changes, political shifts and other unpredictable and uncontrollable events could also serve as the root of a financial crisis causing you stress.

But it’s not just an unfortunate series of events that can cause you the most financial stress, it’s your unwillingness or hesitation to address the financial issue before stresses and crises turn into full-blown catastrophes. Let’s take a closer look at financial stress and what you can do to reduce or eliminate it.

Uncover Root Causes

The most common causes of financial stress are delinquent bills, mountains of debt, insignificant savings, medical bills, and life or societal changes that put a strain on your bank account. But each individual feeling pressured by financial strain will have a different root cause profile. So you’ll need to closely examine your unique root causes. Here are a few questions you should ask yourself:

• How much debt do I have relative to my income?
  Even if you’re earning a handsome six-figure salary, you might still be heavily indebted according to your income. A healthy debt-to-income ratio should be no more than 28%. Use a debt-to-income ratio calculator to figure out your level of indebtedness.

• What major life changes have I experienced in the last 24 months?
  If you’ve gone through a divorce, added a new member to your family, become a caretaker of elderly parents, or lost your job, these major life changes could cause financial strain. Take stock of the most recent happenings in your life so that you can get a better idea of how life changes may have hurt you financially.

• Do I have adequate emergency savings?
  The ability to cover the cost of an emergency can offer incredible peace of mind. If you don’t have enough savings to at least cover some of the most common types of emergencies such as vehicle trouble, out-of-pocket medical expenses, or enough cash on hand to take a flight if a loved died in another city, this could create ongoing low-level stress.

Once you’ve identified the roots of your financial stress, you will be better positioned to take the right kind of action to tackle it.

Releasing The Tension

There’s no magical way to solve all of your financial problems overnight. However, by committing to a logical course of action to tackle the root causes, you can immediately put your mind at ease even before you’ve made your first payment. Just having a plan can help you release a bit of the financial tension keeping you up at night. Here are a few tips:

• Understand the debt trap.
  The first step to fixing your financial situation is understanding how debt works. More specifically, how your particular debts work. Know how much you owe exactly and write it down. Know how much interest, penalties, and fees you pay each month and undertake to reduce or avoid them. And remember that paying just the minimum on any debt is guaranteed to keep you in the debt trap.

• Get the most out of your income.
  If you’re in debt and suffering financially, it’s understandable that you would assume that you don’t earn enough money, and that may be true. But before you look for a higher paying job, consider how you may be wasting a significant percentage of your income. Start by reducing your spending on frivolous items that can accumulate into hundreds of dollars per month such as restaurant meals, fancy coffee, subscriptions you don’t use, late fees you pay because you forget bill due dates, tax penalties because you’re underpaying your taxes etc. It may surprise you that very small changes can help you get the most out of your income even without a pay raise.

• Don’t procrastinate.
  When you’re facing large debts and overdue bills, it may feel comforting for a moment to ignore the issues or put them off until you have more money. But that’s a mistake. The longer you wait to address your financial stress, the worse it will get. As soon as you realize that there is an issue, move quickly to address it even if you can only make a small improvement.

Taking some steps to fix your financial issues will provide immediate relief from at least some of your stress. But it’s important to have a concrete plan that you implement now.

Keep Yourself Honest

Human beings are masters at self-deception; we may tell ourselves that we’re making an effort when in reality we’re slacking. To avoid serious amounts of self-deception when dealing with your financial stress, keep yourself honest by tracking your finances. Here are a few things you should track:

• Your spending habits.
  Keep track of how much you spend using a tracker (digital or manual) and check it each month. If you notice that you’re spending money on frivolous items or that you’re overspending, you will know you need to make a change.

• Your debt balance and interest charges.
  Track how much interest you accrue on existing debt and how much progress you’ve made to pay down your balance. You should always pay more than the minimum balance if you want to make any progress. But don’t depend on your memory to keep track, look at your records each month to see just how well you’ve done.

• Your savings.
  How much money do you save each month? If you’re spending $200 on restaurant meals but only $100 on savings then you know that your priorities need an adjustment.

Remember, what gets tracked gets done. If you want to make an improvement in your finances and relieve your financial stress, track your progress.