Dealing With Financial Stress

I doubt there is a single person on earth who hasn’t experienced a little bit of financial stress.  Perhaps saying a little isn’t giving enough credit.  We’ve all experienced a lot of money stress at some point in our lives.  Each and everyone one of us.  For some, it’s over their $100,000+ student loans.  For others it may be something small like having to hold off on a home purchase for another two months to save up money for a down payment. The what isn’t as important as the why and neither the what nor the why are as important as getting your butt in gear and taking care of the source of that financial stress.  

Money problems don’t just “go away”.  Quite the contrary.  Interest rates work in a way such that if you ignore the debt, the problem (how much you end up paying in interest) literally grows!

Story time

I had my own financial-freak-out this week.  It was about… TAXES.  Normally I really enjoy doing my taxes since it gives me a clear picture of how my overall earnings are looking.  A lot happened for me this year: a marriage, home sale and purchase, selling of shares of stock I’ve had to fund said home purchase, and the starting of a side business.  I had a feeling that taxes were–to put it bluntly–going to be a royal pain in the ass.  Whatever.  I’m not afraid of a challenge so I start plugging away one delightful Saturday morning, nice cup of coffee in hand.  A 1099-B here, a business expense deduction there, and voila!  I owed the IRS almost $3,000.

**record screeching**

What?!  How did this happen?!  Me!  I’m good with money!

I remember going to bed that night feeling totally overwhelmed and just plain screwed.  Our home renovation was already a little over-budget and now I have to pay the IRS $3k. Arrrgghhh.  My chest felt tight and a thought that I have never had crossed my mind: “is this a heart attack?  I’m too young to have a heart attack!”

financial stress

Don’t you just love that moment when you face-palm?

After processing what was going on, I decided to step away from doing my taxes for a week.  I had to clear my mind and strategize with my wife.

After taking a mental breather, we were able to come up with a few ways to reduce our tax burden.  Specifically, we contributed the maximum allowed ($3,350) to my Health Savings Account (HSA) for the 2015 tax year.  We also donated to charities for which our state provides a dollar-for-dollar tax credit.  This ends up being a wash on our state return, but helps increase our deductions for the federal side of things.  All in all, we were able to reduce our tax bill by almost $2,000.  I’d call that a success, especially when you consider that it’s pretty late in the game to make some serious changes that will have a positive impact on taxes.

Lessons learned

We learned two valuable lessons this year: the importance of preparation and taking action.  First, let’s talk about preparation.  Could I have prepared a little bit better for taxes?  Absolutely.  I could have topped off the ol’ 401k before the end of the year, taken advantage of other charitable donation credits, and mentally prepared for a little bit higher of a tax bill.  There are quite a few areas where we flat-out failed to prepare.  BUT! We did prepare in one area that really saved our butts: having an emergency fund.  This is the sort of thing that emergency funds are for.  It’s easy to see that having an emergency fund is an integral part of a healthy financial picture and is why it is Phase 2 in the What Should I Do With My Money series.

On to the next point: taking action.  This part is huge.  When I first received that $3,000 jolt, the first thing I wanted to do was close the laptop, crawl into a ball, and not ever think about taxes again.  Ever.  It was easy to see how people can perpetuate this procrastination because of the anxiety one feels when going through a financial hardship.  What worked for me was going on the offensive by creating a checklist.  From a mental standpoint, I’m much more comfortable being on the offensive than I am being on the defensive.  I love checklists.  My wife gives me a hard time because I once had a checklist with an item for “nap”.  But I digress.  A checklist helped tremendously with taking action.  It helped me paint a clear picture of the steps we needed to take in order to reduce our tax return and successfully file our taxes.  It also provided a sense of satisfaction when I was able to check things off of the list and see some physical progress.

No matter how big or how small your financial freak-out is, it’s important that you do one thing: deal with it.  These things don’t just go away.  If the source of your stress seems insurmountable, just remember that people are successfully paying off insane amounts of debt all. the. time.  There isn’t any reason you can’t do the same thing.

Action steps
  1. Pick a problem, any problem.
    • Write down what you’re going to do in order to address it.
    • Refrigerator bulletin boards can be a great tool for this sort of things.
  2. Make mini-goals that help you work towards your main goal.
    • Celebrate victories (high-fives are better than fancy dinners).
  3. Get your Emergency Fund up and running to help prevent stress in the future.


Since we’re talking about taxes a little bit in this article, TaxAct is gaining in popularity due to its lower cost than other online tax prep software.  You can get TaxAct here and save an additional 5% on the cost of the software by using my link.


4 thoughts on “Dealing With Financial Stress

  1. Pingback: What 5 Money Pros Are Doing With Their Tax Refund

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