Do You Have Financial Fatigue?
In the face of continued economic uncertainty, record-high inflation, and a very real threat of a recession, how do you feel about this rocky year ahead?
You’re undoubtedly exhausted by managing your money these past few years. Financial fatigue has struck the nation, causing many people to feel apathetic about their finances.
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Snoozing on your finances can cause bigger problems than boredom with your budget. Economic exhaustion can lead you to discount warning signs that leave you unprepared for preventable expenses and situations.
What is Financial Fatigue?
Financial fatigue is just like any deep-rooted exhaustion or burnout. It’s a one-two punch of apathy and lack of energy that steals away your motivation to make decisions, take on new tasks, or even maintain healthy habits.
The current economic conditions compound these feelings. Inflation, the central bank’s latest rate hikes, and a looming recession are all out of your control. Yet, they dictate everything to do with your wallet — from how much you spend on groceries to the cost of borrowing an installment loan or whether you’ll keep your job this year.
It’s hard to care in the face of these odds.
What Does Financial Fatigue Look Like in Real Terms?
Let’s be honest — if you have this fatigue, you probably already know it on account of the depression and demotivation. The practical effects of this fatigue may be harder to spot.
Here are some warning signs you might be more fatigued than you think.
1. You Have No Emergency Savings
Don’t have savings? Apathy in the face of economic uncertainty is sure to follow, especially if you haven’t managed to increase these savings since the start of the pandemic.
Last year, nearly a quarter of Americans (23%) had no savings whatsoever. Another 28% have managed to put some savings aside, but they couldn’t cover three months of living expenses.
If you remember, three months is the minimum goal for your emergency fund. Without achieving this level, you might find it hard to cover unexpected expenses and unpaid time off.
2. You Have Growing Debt
When you have no emergency savings, you might rely on credit cards, lines of credit, and installment loans to help you cover unexpected expenses. The online loan experts at MoneyKey join the chorus of financial voices that say these financial options are only recommended in extenuating circumstances as a last resort.
Unfortunately, financial fatigue can make it harder to save as you pay off these debts. You simply don’t have the energy to mount this two-pronged attack, so you focus on paying down an installment loan while putting your savings on hold.
Covering your debt is always a good idea, but without saving simultaneously, you’re still in the same position: zero savings in the face of an emergency. You may have to borrow again the next time you need to call a plumber or repair your brakes.
3. You Gave Up on Budgeting
Living without a budget is one of the biggest signs you’re sick and tired of your financial situation. This mindset is understandable but problematic. A budget is a spending plan that can prioritize expenses and eliminate areas of wasteful spending. You might be able to multitask savings and debt payments once you free up more cash.
Can You Change Your Mindset?
Financial fatigue can rob you of the drive to manage your money in responsible ways. While it may be a normal feeling in the modern world, it can leave you unprepared for another hard financial year ahead. Consider what you can do to recharge and reset.