As we experience changes due to the collapse of SVB, a growing problem has arisen that is affecting the startup world.
Many companies relied all their funds in SVB or other banks that recently collapsed. This increased the financial stress that a startup already has in the lifetime.
Founders and employees will start feeling overwhelmed by money concerns. Whether this was caused by the current events or is part of being an entrepreneur, there are ways to get through these tough times, ease stress and anxiety, and regain control of your finances.
Understanding Financial Stress
Many of us,are having to deal with financial stress and uncertainty, many times in your lifespan. Whether your problems stem from banking collapse, stock market down, a loss of work, escalating debt, unexpected expenses, or a combination of factors, financial worry is one of the most common stressors in modern life.
An American Psychological Association (APA) study found that 72% of Americans feel stressed about money at least some of the time. The recent economic difficulties mean that even more of us are now facing financial struggles and hardship.
CreditWise by Capital One run also a survey where results shows that 73% of individuals identify that their finances are a major stressor.
Some of the most common financial stressors include:
- Bankruptcy or foreclosure
- Job loss
- Reduced work hours or income
- Lack of savings
- Debt
- Health care costs
- Separation, divorce or the loss of a partner
- Taxes
- Food insecurity
- Housing insecurity
How does financial stress affect you?
When you’re struggling financially fear and stress can take you ove. It can damage your self-esteem, make you feel flawed, and fill you with a sense of despair. When financial stress becomes overwhelming, your mind, body, and social life can pay a heavy price.
According to Gallup’s annual Health and Healthcare poll, around 30% of Americans admitted that they have put off seeking health care when in need due to concerns about the cost of the visit or treatment.
Financial stress can lead to: insomnia or other sleep difficulties, weight gain (or loss), depression, anxiety, relationship difficulties, social withdrawal, physical ailments, unhealthy coping methods and addictions.
How to deal with financial stress?
Maintaining a financial health and learn to keep it takes time. Sometimes health professional recommends to look for financial advisory when you suffer of anxiety or other health issues so that it might take the weight from you.
You have to focus on the things you can control, you might be able to take small steps toward reducing the stress you feel.
We will share some tips to overcome your financial stress.
Ask for help
Don't start asking for money help, you shouldn’t be afraid to reach out to someone when you’re in a tough spot. Financial difficulty as many other stressors causes isolation, but talking to someone you trust or a professional can be the first step toward turning things around.
Money-savvy peers are good support teams that can help you go over and advisor in certain decisions. Find you Financial Mentor.
Find ways to earn extra income
Earning extra income can help you reach your financial goals faster. In the startup world we can call it a "Pivot" if you find that there are more opportunities elsewhere.
Adding other services is another way to offer and work with others
Control your spending
Look at your financial books. If you don't have one, this is a good time to start building one to identify what are your biggest expenses.
Emotions, whether we realize it or not, are behind a lot of our discretionary spending, so make sure to control them with a better plan and more organized schedule.
It is always good to think twice before making an expenditure, mainly in this situation even small money spends can make a big impact on your overall finances.
Budget your Money
Creating and maintaining a budget is key for success, and essential to exit your financial stress situation.
Look at your monthly income, and subtract your operating expenses (e.g. Cost of Goods, Housing costs, Services, etc.). Having that figure in mind can help keep you accountable. After a month, you will be building a habit to look at the number and more comfortable setting up goals. If you’re going way over in certain areas, you’ll know where you need to adjust.
There are plenty of online budgeting, investing and money management tools designed to help people and businesses take better control of their finances.
Learn from your mistakes
Unpleasant financial experiences and bad decisions, whether it was the time we didn’t have enough for an emergency, or we let a due date slip by and our card was declined. Face down those mistakes and what caused them. You might get some valuable insight into your habits and overall mentality.
Be sure to periodically reassess what you know about budget best practices, especially if your income, business or personal situation changes.
Set your goals
With the budget and tools, now you are at the time to set your financial goals.
You need to understand what is important for you and your business and what you want to accomplish in the near future.
Start small with manageable goals and move up in the ladder. Even getting to the next month with enough cash is what you are working now then look not further.
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