Losing Sleep Over Financial Woes

Financial challenges are keeping America up at night.

Each week, Consolidated Credit searches for financial research that can help you deal with your debt and budget. This week…

The interesting study

It’s no secret that when you’re facing financial challenges, it’s going to increase your stress levels and impact other areas of your life, but by how much? A new CreditCards.com survey explores this to see how financial concerns affect people’s ability to get a good night’s rest.

 

The big result

According to the survey results, roughly 6 out of every 10 Americans report that they lose sleep because they can’t stop thinking about a particular financial concern when they go to bed. What’s really interesting, however, is that women are far more likely to be burning the midnight oil worrying about money than men.

So while 56% of men occasionally lose sleep over financial woes, 68% of women do the same.

The fascinating details

What exactly is keeping Americans – particularly women – up at night? Retirement tops the list…

  • 44% of women lose sleep over retirement worries compared to 35% of men
  • 32% of women are worrying about education expenses versus 27% of men
  • 33% of women can’t sleep due to concerns about healthcare and insurance, compared to 24% of men
  • 28% of women are worrying how they’ll pay rent or cover a mortgage versus 23% of men
  • 23% of women have concerns about credit card debt keeping them awake versus 21% of men

What you can do

Losing sleep over financial stress isn’t doing you any favors. You’ll be less productive at work, which means you can’t be at the top of your game to earn critical promotions and salary increases. You’re also more likely to have an accident when you’re tired and distracted by worries over money. No kidding.

So you’re not helping your situation by stressing about money when you should be sleeping. Instead, what you need to do is block out some time in your waking hours to put in actual work on solving your financial concerns. Any major goal like saving for retirement or eliminating credit card debt needs to be made into a workable action plan.

“Financial goals should always be SMART,” says April Lewis-Parks, Education Director for Consolidated Credit. “That stands for Specific, Measurable, Achievable, Realistic and Time-Bound. In other words, you have to set goals that have definitive start and end points where you accomplish X within a certain amount of time. This way, you ensure you’re working towards achieving your goals instead of just wishing and stressing.”

So let’s say you want to pay off your credit card debt. You have about $10,000 of debt to eliminate on 6 credit cards, ranging from 13% APR to 21.99% APR on your rewards credit card. How would you make a plan to eliminate that debt?

  1. Start by identifying your highest-interest credit card – i.e. the card with 21.99% interest rate
  2. See how much money you can free up in your budget for debt elimination
  3. Now use a debt calculator to determine how quickly you can pay off that debt with the amount of money you have available
  4. If it will take 6 months to pay that card off, then your first goal is to pay off that card in 6 months.
  5. Repeat this for each credit card, working from the cards with the highest interest rates to the cards with the lowest interest rates.

“By making goals specific, you’re more likely to achieve what you set out to do,” Lewis-Parks explains. “Instead of a nebulous goal to eliminate your debt at some point this year, you know you’re paying off each credit card by a specific date. And having a plan like this can go a long way to reducing your stress so you can sleep better at night.”