Are you dissatisfied with your present financial situation? Are you worried that you can’t pay for your regular monthly living expenses? Are you afraid that you won’t be able to find money to cover an emergency? Do you make spending or investing choices that you regret? When you think about money, do you feel overwhelmed, scared or depressed?

If you answered yes to one or more of these questions, then chances are you’re financially distressed.

Financial distress occurs when you have negative feelings and reactions to your financial situation. These emotions are usually the result of unhealthy money practices that can have a damaging impact on your financial well-being or wellness.

There are four components of financial wellness:

1. Your financial state of affairs – how much money do you have?

2. Your financial behaviours and practices – what do you do with money?

3. Your knowledge and attitudes about personal finance – what do you know about money?

4. Your level of satisfaction with your financial situation – how do you feel about money?

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All of these components work together to create your level of financial well-being; so if you’re feeling distressed, you have to examine each area to determine the source of your problems.

How much money do you have?

One of the major contributors to financial distress for many people is that while they know that they don’t have enough money to make ends meet, they are really not sure how bad their situation is. Being clueless about the extent of your money problems can actually make you feel worse than the underlying issues.

The solution to this concern is to be honest with yourself and determine the true state of your affairs. The first step is to assess your spending habits to find out if your expenses are being met by your available income. Go to www.financiallysmart.org to download a personal budget, and record everything you spend money on throughout the year.

Most persons will find that they spend more money than they earn; and this basic imbalance is the root cause of most money distress. When you see the figures on paper it can help you to face reality – to be in balance you either have to cut back on spending or find ways to earn more money.

What do you do with money?

An examination of your budget will usually point to clues about what you’re doing with your money. Are you saving money for emergency needs? How much money is spent on non-essential items? How much money is going towards consumer loan and credit card payments? Are you investing for long-term goals?

The level of your distress will directly increase with the poor spending decisions that you make. While you might receive instant gratification and pleasure from buying things that you know you can’t afford, focusing on saving and planning for the future will bring long-term satisfaction and financial well-being.

Making plans to protect and maintain your money can also help you to be free of financial distress. Taking out insurance on your health and life can give you peace of mind. Thinking carefully before you invest your money into risky schemes will help you to rest well at night. Knowing that you have made adequate preparations for your retirement and your eventual passing is mentally liberating.

What do you know about money?

Becoming financially smart is perhaps the best thing you can do to combat financial distress. Many years ago when I first became uncomfortable with my financial situation, I resolved to learn all I could about money. As I studied and applied the principles of financial success, my confidence and comfort level about my money position increased exponentially.

In past columns we have covered various ways to learn about money. Reading books and magazines, listening to CDs and radio programmes, watching television shows, attending workshops, surfing the Internet, playing money games, sharing with friends in money groups – all of these should be components of your financial education plan.

How do you feel about money?

What’s your relationship with money? Do you love it and put it on a pedestal, or do you dislike it and wish that you could live without it? It’s not only the size of your bank account or your financial smarts that determine your money happiness – your attitudes towards money can have a big impact on your financial well-being.

Why is it that some people can live contentedly with average means, while others are dissatisfied, always wanting more money, despite having much wealth?

The answer lies in level of your ‘money intelligence’. Being intelligent about money means that you appreciate that there is more to life than the acquisition of riches; you put people first before money; you will never lose sight of your values and principles in order to get money; and you are committed to using your money to benefit others and not just yourself.