Welcome to Let’s Talk Money, where you’ll hear about the small changes you can make to build sustainable money habits, reduce your stress, and set yourself up for financial and personal well-being. Money is a top cause of significant stress for Americans, and unchecked stress levels have been linked to issues from heart disease to diabetes to depression. What’s more, 82% of individuals feel that the COVID-19 pandemic has had a bigger negative impact on their financial stress and well-being than any other event in recent history, according to a Thrive Global original survey of 1,000 Americans. The good news is that there’s a powerful, impactful approach to managing our finances and our health, based on the latest behavioral science showing that starting small — with too-small-to-fail Microsteps — is the most effective way to make habits stick. Read on for advice on how to take control of your financial and overall health, one small step at a time.

If thinking about your taxes makes you feel uneasy or anxious, you probably felt the tiniest bit of relief when heard that in response to the global pandemic, the federal government moved Tax Day from April 15 to July 15. 

But as the new deadline fast approaches, it’s important to make a plan — especially if you’ve been anxiously avoiding thinking about your taxes while grappling with any unanticipated financial repercussions of the coronavirus. Whether you’re nervous about making a mistake in the paperwork or how you’ll manage to pay a tax bill, not dealing with your “filing stress” can take a toll on your mental and even physical health. 

The good news? The expert-backed tips below can make the whole ordeal a whole lot less stressful. 

Acknowledge your discomfort 

One reason tax season is so stressful is that it puts money front and center in Americans’ minds, “forcing us to face our financial demons,” Bradley Klontz, Psy.D., an associate professor in financial psychology at Creighton University Heider College of Business, tells Thrive. And the truth is, many people would rather avoid thinking about it, which could explain why one in five tax filers puts off filing until the last two weeks before the deadline, according to the I.R.S. Avoidance and procrastination are common coping mechanisms for stress, but any short-term emotional payoffs (“ignorance is bliss”) aren’t worth it in the long run, says Klontz. 

Ultimately, getting on with the task at hand — in this case, your taxes — can help you build your financial confidence and slowly slay your financial fears. When we face our “demons” head-on, our attitude shifts from “I can’t” or “I won’t” to “I’m doing something,” Kathleen Gurney, Ph.D., a researcher and expert in the psychology of money management, tells Thrive. “The mere act of addressing the challenge will help you feel more capable,” she adds. 

Luckily, making even the smallest dent in this task can help you move through it. B.J. Fogg, Ph.D., a behavior change researcher at Stanford University and author of Tiny Habits, calls these small steps the “minimum viable effort.” Maybe you schedule time on your work calendar to call your accountant, or take two minutes to download an electronic copy of your W-2 if you haven’t yet. Even sharing your feelings about tax season with a loved one, or journaling about them, counts as taking action.

Don’t catastrophize

Stress is often a result of uncertainty, or a lack of control over future events. And when you first sit down to prepare your taxes, there can definitely be an element of the unknown. What will the outcome be? Will I be able to manage a big bill? “The inability to predict your future well-being can be crippling, and is the culprit for inducing and reinforcing stress,” Gurney says.

Ironically, you’ll be in much better shape to cope with worst-case scenarios if you don’t “future-fret.” That’s because the best decisions are made when you’re grounded and centered — not in a worry spiral.

So if the fear of tax-related unknowns is causing your mind to race ahead, use mindfulness techniques to keep yourself in the present moment. One mindfulness exercise to try: When you find yourself worrying about finances, take a long, expansive breath in, and then exhale slowly to the count of five. Do that a few times, and you’ll be equipped to face the task at hand from a place of greater calm.

Rethink your refund

Contrary to popular belief, a tax refund is not a “gift” from the government or a random windfall of cash. It’s a refund of your own money — because more cash was withheld from your paychecks than was necessary. But this isn’t how most people think of it — which is why they’re stressed when they don’t get the refund they expected or were hoping for, says Klontz. 

Our brains are hardwired to see the negative, but it’s entirely within our control to reframe stressful moments into positive ones. “If you don’t get a refund, remind yourself it’s because you either underpaid or you paid the right amount,” says Klontz. This mindset shift can also lead to less stress in the long run: because if you don’t see it as “free money,” you may be more likely to use it mindfully, or even pay off loans that are weighing on you emotionally, rather than “blowing it” on meaningless splurges. 

And in the future, Klontz recommends you don’t count on receiving a refund at all. You’re better off focusing on saving throughout the year. This way, you’ll have a reserve of cash you know you can rely on even if you don’t get a refund check every spring. 

Know your options

Sometimes when we’re stressed, we’re less able to see the solutions right in front of us. If you do get hit with a tax bill, you have options as far as how to handle it. If you can’t pay the bill upfront, the I.R.S. offers payment arrangements like long- or short-term payment plans. You can look at their website to see if you qualify, and if you do, download the relevant forms. If you go this route, keep in mind that the I.R.S. will not approve your plan unless you have filed all of your tax returns — no incompletions. 

Another option is to put your taxes on your credit card. While it’s important to check the associated fees first (you can do this on the I.R.S. website), this may be a good bet if you’re looking to meet the minimum spend requirement on a credit card to earn rewards and/or points. Just be sure you’re only going the credit card route if you feel confident in your ability to pay the balance when the bill arrives.

Head off future troubles 

When this year’s tax season comes to an end, you may be tempted to clear your mind of all memories of it (what’s a W-2 again?). But if you were particularly unsettled during this tax season, use the experience to head off unnecessary tax stress in 2021 and beyond. It’s a good idea to do a “paycheck checkup” now and review your withholding to avoid tax surprises next year. 

And if you do get a tax refund, consider stashing it away to boost your emergency fund. You can also think about your taxes more holistically, because let’s be honest: Feelings about taxes are never just about taxes. They’re about what you do with your money year round — and mindful saving (and spending) will not only help you alleviate stress for the next tax season, but can keep you feeling calm and in control about your finances in the long term. 

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