Learn and Plan | Helping deal with financial stress
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Helping deal with financial stress

Jul 31, 2023, 6:47:06 PM | Reading Time: 4 minutes

Keeping up with day-to-day bills and trying to save money for the future can feel overwhelming, and many people experience stress and anxiety as a result of this pressure. A study from the American Psychological Association (APA), found 65% of people said money is a significant source of stress. Add in economic uncertainty, rising inflation rates, and increased cost of living and it’s not surprising that many individuals are worrying about their finances. Knowing what to look out for can help prevent stress levels from getting out of control and can allow you to take action to help relieve financial strain and support your overall mental well-being.

What are examples of financial stress?

The source of financial stress comes in all shapes and sizes and can often differ from person to person. Common examples of financial stress that may impact your mental health include:

  • Paying off debt
  • Little or no emergency savings
  • Medical expenses
  • Paying mortgage, rent, and daily bills
  • Losing a job or being unemployed for an extended period
  • Saving for children’s college education
  • Building retirement savings

For many people, just looking at their bank account or credit card balance can be stressful. Without managing this money-related anxiety, you can experience physical and mental symptoms that could lead to ongoing problems that can affect your quality of life.

What are some of the long-term effects of financial stress on mental health?

Worrying about money, especially for long periods, can take a toll on your mental health and can potentially be harmful if left unchecked. Your mental and physical health are closely linked and being stressed can change your eating or sleeping habits, lower your energy levels, or lead to headaches and chronic pain. Prolonged stress levels can also affect your respiratory and cardiovascular systems and put you at a higher risk for other health problems. Plus, being consumed with financial stress can negatively impact how we take care of ourselves and interact with others. You may find yourself being short with your partner or children or getting easily frustrated at work.

While periods of stress or normal, it can be concerning when short-term stress turns into a chronic problem that lasts for months or more. To better manage your stress levels, it can be helpful to know what warning signs to look out for before they become a more serious issue. Signs of too much stress may include:

  • Trouble sleeping
  • Difficulties concentrating
  • Memory issues
  • Frequent illness, headaches, or back pain
  • Stomach and digestive issues
  • Weight loss or gain
  • Skin problems
  • Moodiness or irritability

If you’re experiencing these symptoms and feel your financial situation is to blame, it may be time to take action and find ways to help lower your stress. Don’t hesitate to reach out to a mental health professional if you feel you could use some assistance in lowering your stress levels or getting through a difficult time.

How do you relieve financial stress?

Create a financial plan

Devising a plan, especially during times of heightened financial stress, can help you get organized and feel more in control of a tough situation. If a short-term stressor pops up, like an unexpected medical expense, take a look at your budget and decide how you can move around money or eliminate costs to free up funds to put toward your medical bills. Having an overall financial plan that you regularly maintain and update is a good proactive approach to managing money stress and can allow you to work toward savings goals, build an emergency fund, and keep on top of your expenses. When you have a clearer picture of your finances, you can make more confident decisions and bounce back from financial difficulties.

Design a manageable budget

While many people dread the word ‘budget,’ it can be your best friend, particularly when you’re looking to alleviate financial stress. The more you understand your income and expenses, and how to get them into better balance, the more you can feel in control of your money, even if your car suddenly needs repairs or the water heater breaks. Being familiar with your financial situation can help lessen stress when you look at your accounts and by keeping track of your spending, you can avoid going over budget, work more efficiently toward your financial goals, and find ways to bulk up your emergency fund for the future.

Automate bills and savings

Keeping up with your bills can be a big source of stress, but there are ways to help ease the mental load. Use your budget to identify your regular monthly expenses and carve out that amount from your paycheck. Set up automatic bill pay where possible to free up the time and energy it takes each month to enter each bill. This not only helps guarantee your money is going to your bills but can prevent you from spending money on unnecessary items. You can also have a designated amount of your paycheck automatically go into a savings account. Even if it’s $50 per month, you can begin to build up your savings and give yourself a little peace of mind knowing you have an emergency fund if needed.

Practice mindful spending and gratitude

Managing your spending habits and being aware of how each paycheck is spent helps to put you in the driver's seat and can give you more financial freedom to choose where your money is going. A large part of promoting mental well-being is maintaining a positive outlook. This can certainly be challenging during times of high stress, but trying to focus on the things you can control while being grateful for the aspects of your financial life that are going well, can help keep things in perspective. By looking at your financial situation through a different lens, you can often shift your feelings of stress to an attitude of determination, so you’re ready to tackle any challenges that come your way.

Meet with a financial professional

Having an advocate in your corner who can offer advice can be very valuable when you’re experiencing financial stress or uncertainty. If changes in the stock market have you worried, or you are going through a life event that is causing money concerns, a financial professional can be a reliable resource you can go to for guidance. Most importantly, they can help you create a sound financial plan that allows you to manage your money with more confidence and be better prepared if the unexpected happens. Financial stress is extremely common and nearly everyone will experience it at one time or another. Through preparation, practice, and patience, you can often improve how you react to money-related anxiety and find healthy ways to cope. Making financial wellness a priority can help support positive mental health and kick financial worries to the curb.