Self-help

Worried About Money? Here’s How to Cope with Financial Stress

Financial stress is a common issue affecting many people’s mental and physical well-being. Learn about the impact of financial stress on mental and physical health, as well as practical strategies for managing and coping with financial challenges.

therapist william snyder By William Snyder, LPC

Updated on May 13, 2024

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Are you feeling stressed about money? You’re not alone. 

About 57% of U.S. adults say they’re worried about their finances, and more than 80% are stressed about inflation, according to the 2022 Stress in America survey. Their concerns are perfectly justified, given the ever-increasing cost of living.

The COVID-19 pandemic aftermath, rising interest rates, and other factors contribute to financial stress. What you feel is perfectly normal, but you shouldn’t let it take over your life. 

Financial worries can affect well-being, sometimes leading to depression, anxiety, and physical illnesses. Some people develop unhealthy coping mechanisms in response to these problems, turning to alcohol or drugs for comfort. Others give up on hope and isolate themselves, which can take a toll on their mental health. 

On the positive side, there are steps that can be taken to address financial hardship. But first, you must identify your stressors and tackle them one at a time. 

Financial Stress and Your Health

Money is a major stressor for millions, regardless of age, gender, or financial status. You can have a successful business or a high-paying job and still be worried about your finances. After all, you never know what could go wrong.

The psychological and emotional strain experienced in such situations is often referred to as financial stress. It can stem from various factors, including job loss, excessive debt, unemployment, low income, financial uncertainty, and more.

If left unaddressed, these worries can affect your well-being and everyday life. “Financial stress can have a significant impact on mental health and overall general well-being by triggering or exacerbating mood disorders,” warns Deborah Harland, a licensed clinical social worker with Grow Therapy.

For example, people with high debt are more likely to experience anxiety and depression. Over time, financial hardship can lead to psychiatric disorders, a major cause of functional impairment.

Money Stress Can Take a Toll on Mental Health

The impact of financial stress on mental health goes beyond anxiety and depression. This can also impact our ability to communicate with others, taking a toll on interpersonal relationships.

Think about how easy it is to get irritated when the bills stack up and you can’t pay them. In such cases, many people blame a family member or friend for their financial issues or project their feelings onto others.

Your productivity and mental focus may suffer, too, says Harland. You may feel too tired to get things done or make costly mistakes, further affecting your finances.

Stressing Over Money Can Affect Physical Health, Too

“Financial stress can negatively impact physical health, as it makes our bodies more susceptible to disease,” notes Harland. Any long-term stress, for that matter, can cause physical symptoms, according to the American Psychological Association (APA). These may include, but are not limited to:

The APA warns that chronic stress can trigger and worsen asthma, heart disease, obesity, diabetes, and respiratory problems. Stress has also been linked to a higher risk of arrhythmia, or irregular heartbeat, elevated blood pressure, stroke, and heart failure.

Furthermore, job loss and other causes of severe emotional stress may immediately affect heart health. For example, it’s possible to experience sudden cardiac arrest after having your bank account frozen. Not surprisingly, these problems can occur even in otherwise healthy people.

High Stress Levels Can Lead to Insomnia

Financial worries can skyrocket your stress levels, making falling and staying asleep difficult. Stress also affects sleep quality, leading to fatigue, drowsiness, and mood changes.

Over time, poor sleep can weaken your immune system and increase the risk of disease. You may also experience weight gain, anxiety, memory problems, and difficulty concentrating.

The relationship between stress and sleep deprivation goes both ways. Chronic stress from heavy workloads, financial problems, or trauma may cause or worsen insomnia. The less sleep you get, the higher your stress levels.

Financial Stress Can Hinder Work Performance

About half of the American employees dealing with financial stress spend at least three working hours per week thinking about money. What’s more, 35% say their financial issues keep them from doing their jobs, and 21% feel less productive because of it.

It can be hard to stay focused at work when you don’t have enough money to pay the bills. It may feel like everything you do is in vain, and you’ll never be able to make it through.

These thoughts can affect your morale, productivity, and job satisfaction, leading to poor work performance. Depression and other mental health issues only make things worse. You may also receive negative feedback from managers or team leaders, which can further increase stress.

In such circumstances, seeking therapy for anxiety and stress makes sense. But you must also learn to deal with financial stress on your own and improve your money management skills. 

How to Deal with Financial Stress

Whether you’re paying off a student loan or filing for bankruptcy, financial stress can take over your life. Meanwhile, you may also have to deal with other stressors, such as relationship issues, tight deadlines, and daily hassles.

On the positive side, taking control of your finances is always possible. The key is to make small but impactful changes and prioritize self-care. You just need to know how to go about it. 

For example, something as simple as switching to a different health insurance plan can help you save hundreds of dollars a month. You could use those savings to build an emergency fund, pay off credit card debt, and get peace of mind.

Moving forward, here are some small steps you can take to overcome financial difficulties without losing your sanity. 

Cut Unnecessary Expenses

First things first, make a budget and set realistic financial goals. “With a budget, you can adjust and learn how to live within your means or even below them to reduce ongoing financial stress,” explains Harland. This approach lets you put some money aside and build up your savings account.

Start by writing down your income and expenses. Next, see how much money you have left after paying for healthcare, utilities, groceries, housing, and so on.

Meanwhile, try to identify and reduce discretionary expenses, including:

Go one step further and cut back on essential expenses, such as groceries and internet services. For example, you could downgrade your internet speed and start buying food in bulk. If you have ongoing health problems, ask your doctor to prescribe generic drugs rather than branded medications. 

Consult a Personal Finance Advisor

A personal finance advisor can assess your financial situation and then tell you what you do well and could do better. “Educating oneself about financial choices to better understand how to manage and build wealth is an important step that many overlook,” says Harland. “Financial literacy goes beyond being able to balance the checkbook every month. It also requires learning healthy spending habits for a lifetime.”

If, say, you are paying a high interest rate on your car loan, a personal finance advisor could help you identify other options. You may be able to refinance your loan, negotiate a lower interest rate, or consolidate your debts. Financial coaching won’t solve your problems, but it can give you a fresh perspective and improve your budgeting skills. 

Focus on What You Can Control

Some financial stressors are beyond your control, and you shouldn’t blame yourself for how things turned out. For example, many people lose their jobs because of budget costs. Their work performance has nothing to do with it. 

What you can do is identify the factors you have control over — and take action on them. Assess your financial health, see where you can make adjustments, and devise a plan. This could mean looking for work, starting a side hustle, or even taking a mental break to find your inner balance.

Most importantly, accept and acknowledge your feelings. Financial stress can be overwhelming, regardless of where you’re at in your life. Allow yourself to feel the emotions associated with it without judgment. 

Count Your Blessings

No matter how bad things may seem, there’s always light at the end of the tunnel. What matters most is to focus on what you have rather than what you lack. This approach can help shift your mindset, making it easier to overcome financial anxiety. 

Think about your family and friends, pets, hobbies, or whatever makes your heart smile. Be grateful for having them in your life, and remind yourself why they’re so important to you. 

Keep Up with Your Daily Routine

Having a daily routine can provide structure and stability during uncertain times. It can also buffer the effects of financial stress, create a sense of normalcy, and improve mental health.

A healthy routine should include regular exercise, balanced meals, and adequate rest. “Physical exercise can not only help you get a good night’s sleep, but it also aids the body in balancing stress on a physical level,” says Harland. She also recommends creating a bedtime routine that includes meditation, deep breathing, and other relaxation techniques.

But while it’s important to keep up with your daily activities, you can (and should) try out new things. 

You could start a hobby or work on a project you’ve postponed for years. Such things can boost your motivation and help you feel more in control of your life. 

Seek Healthy Ways to Cope with Stress

When you’re worried about money, it can be tempting to seek comfort in alcohol, drugs, or other unhealthy coping methods. One way to avoid this trap is to acknowledge your feelings and develop healthy coping mechanisms.

Returning to the previous point, you could start a new project or hobby, exercise regularly, or resort to meditation, yoga, tai chi, and other relaxation techniques. Physical activity is particularly beneficial, whether that’s weight training, jogging, walking, or team sports, etc.

You may not feel like hitting the gym when you’re stressed out, but give it a try and see how it goes. Exercise increases the “feel-good” chemicals in the brain, which may help calm your mind and reduce stress. Plus, it can boost your confidence and self-esteem, making you feel more in control. 

Know When to Seek Help

Another option is to see a therapist or talk with a trusted friend. Sometimes, it helps to see things from a different perspective. It’s easier to make sound financial decisions and cope with stress when you look at the bigger picture.

Remember, there’s no shame in seeking help. On the contrary, it shows that you care about your health and well-being. 

A good therapist can help you grow as a person, build mental resilience, and gain a sense of control over your finances. Plus, you’ll be better able to identify and address unhelpful behaviors that contribute to financial stress, such as impulsive spending. Therapy can also help reframe your relationship with money, leading to greater financial well-being and reduced stress.

Take Control of Your Finances

Money can quickly become a source of stress. Sometimes, one wrong decision is enough to ruin your budget. Even if you do everything right, you can still go into debt or lose your savings.

Don’t wait until it’s too late. Assess your spending habits, make a budget, and seek areas for improvement. Meanwhile, take care of your mental and physical health.

Lastly, ask for help when needed. Look for a therapist who can help you cope with financial stress and challenge negative beliefs. Remember, therapy can be a powerful tool for building the life you want.

Frequently Asked Questions

About the author
therapist william snyder William Snyder, LPC

William Snyder is a licensed professional counselor who works with adults experiencing symptoms such as anxiety, depressed mood, loss and grief, identity and self-concept difficulties, relationship problems, life-transition difficulties, and traumatic memories.

This article is not meant to be a replacement for medical advice. We recommend speaking with a therapist for personalized information about your mental health. If you don’t currently have a therapist, we can connect you with one who can offer support and address any questions or concerns. If you or your child is experiencing a medical emergency, is considering harming themselves or others, or is otherwise in imminent danger, you should dial 9-1-1 and/or go to the nearest emergency room.

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