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Financial stress: What’s money got to do with sanity?

October 7, 2021 - 12 min read


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What is financial stress?

What are the symptoms of financial stress?

The effects of financial stress on your overall health

The relationship between financial stress and mental health

4 tips to cope with financial stress

How do you prevent financial stress?

Bottom line: You are not your bank account

When we’re stressed about money, it’s not only our bank account that takes a hit. Financial stress is one of the most common and persistent forms of stress in the world. Managing money is a big part of being an adult, and it can feel like when that’s not going well, nothing else is, either.

What is financial stress?

According to a 2015 report by the American Psychological Association (APA), 72% of Americans feel stressed about money at least some of the time. Typically speaking, income is inversely correlated with financial stress. The less you make, the more stress you have — and the less resources you have to manage and deal with that stress.

What are the symptoms of financial stress?

The symptoms of financial stress are similar to anxiety and other kinds of stress, but they change our thoughts, feelings, and behaviors around money. If you’re experiencing any of the following, financial problems may be affecting your life:

  • Symptoms of anxiety, like shortness of breath and racing heart when you think of money
  • Avoiding phone calls, mail, and contact with creditors
  • Canceling social plans and avoiding friends
  • Feelings of shame or embarrassment
  • Feeling as if you’re losing control of your finances or you can’t keep up
  • Anger or irritability with people who are involved in your finances, like a family member you share bills with or a manager at work who determines your raise
  • Worry, concern, or hopelessness about the future

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The effects of financial stress on your overall health

Because financial stress is usually a type of chronic stress, the impact on your health and well-being can be severe. People with chronic stress are usually more likely to experience the following:

Trouble sleeping

You may experience insomnia or be kept awake at night by money concerns. This creates a feedback loop, since less sleep makes it harder for you to deal with the effects of stress. 

Lack of interest in self-care

Because of concerns around money, you may cut back on or give up some of your self-care routines to save money. These might include your gym membership, haircuts, dining out with friends, doctor’s visits, or alternative care like acupuncture.

Weight loss or weight gain

Stress can cause you to overeat, using food to dull or soothe difficult emotions. However, you might find that stress completely takes your appetite away, causing you to lose weight. Financial issues may also make you feel compelled to skip a meal or two, further disrupting your normal eating habits.

Unexplained aches, pains, and physical health problems

Stress can show up as physical symptoms like headaches, heart disease, high blood pressure, and stomach issues. It can make it difficult for you to prioritize healthy habits like getting enough sleep or eating healthy meals


The relationship between financial stress and mental health

Chronic stress also affects mental health. So when it comes to mental health and money, there are connections.

In fact, the symptoms can be so severe that they mimic post-traumatic stress disorder (PTSD). When you feel like you can’t get ahead of the bills no matter how hard you work, it can destroy your self-esteem and sense of self-efficacy. It can isolate you from your friends and family, making you feel like you should stay home and causing you to miss out on gatherings and events. You may spend all your time (and emotional energy) worrying about bills, waiting for your next paycheck, or wondering whether you’ll be able to handle an emergency if it arises. 

4 tips to cope with financial stress

If you’re feeling overwhelmed by financial stress, the first thing you need to do is get a handle on the stressful feelings. Anxiety tends to steal our sense of self control and our ability to come up with solutions. Here are some ways to fight the financial stress:

1. Calm yourself down

You likely won’t change your financial situation in a minute or two, but you can certainly change your outlook and your immediate stress level. Calm yourself down by having a small snack, drinking a glass of water, or taking a few deep breaths. If you need to vent, share your financial worries with a trusted friend.

2. Make a plan

Financial stress often makes us avoid our finances, mail, bank accounts, and anything to do with money. You can regain control, however, by dealing with your money head on. Take a look and see if you can pinpoint what’s stressing you out. Is it an overdrawn bank account, credit card debt, fear of job loss, or an upcoming purchase? How can you make that one thing feel more manageable?

3. Ask for support

Have a friend that’s great at doing budgets? Ask them for help. Read blogs and books on personal finance and money management so you feel more confident and in control. See if you can share certain expenses with a family member, or ask a creative friend to help you come up with ways to make more money.

4. Practice mindfulness

Dealing with financial stress is a two-fold challenge. There’s dealing with money, and then there’s dealing with stress. Practicing mindfulness exercises, like breathwork, yoga, or meditation is a great way to combat feelings of anxiety — and it’s free. It can also help you learn to manage emotional discomfort and build cognitive agility, both of which may prevent you from becoming overwhelmed by your finances in the future.


How do you prevent financial stress?

As we mentioned, mindfulness, self-awareness, and your support system help you cope with financial anxiety — but planning and prevention can help you stay on top of your finances in the first place. Here are some ways to gain control of your finances and prevent financial stress:

Create a budget

It’s common advice, and for good reason: making a budget is the simplest way to get an understanding of where your money is going. You don’t have to go super fancy. You can keep track of your expenses in the Notes app on your phone, or use a notebook to quickly record what came in and went out that day. If you like, you can sign up for a budgeting tool like Mint or You Need a Budget (YNAB).

Reduce your expenses

Once you have an idea of what you’re spending, look for duplicates and ways that you can save. Are you paying for Netflix, Hulu, Disney+, and cable? Do you need them all? Are there any ways to bundle them and save money on the subscription? It’s often easier to find areas where you don’t mind cutting back if you have a goal in mind. Would paying off your credit card debt be a worthy tradeoff for making your own coffee?

Find ways to make extra money

As the saying goes, there’s only two ways to make a profit: cut expenses or increase revenue. If you’ve already cut unnecessary expenses from your budget, the only thing to do is make more money. See if you can take on extra hours at work, a part-time gig, or freelance. Be realistic about your time and only take on additional work that you know you can complete while still making time to take care of yourself.

Start an emergency fund

If you don’t have anything set aside for a rainy day, even the smallest emergency could send you into debt. Open a savings account and earmark it for unexpected expenses only. If you don’t have a financial goal, most experts would recommend putting aside three to six months of expenses. That way, the uncertainty of an emergency or job loss won’t be a constant source of stress.

Start small

Don’t try to overhaul your budget all at once. Like anything else, managing money is built by cultivating good habits. Pick one thing to change right away. You could set an entertainment budget, land one freelance client a month, pay off your lowest credit card balance, or reduce your food bill by 10%. The new habits you’re building may not see like much right now, but they’ll ultimately be more sustainable and will add up quickly.

Go easy on yourself

Dealing with money stress can be triggering. Most of us weren’t taught to manage our finances, and it can bring up feelings of shame, insecurity, and questions about our self-worth. Be curious, open, and compassionate about what comes up as you learn to manage your money. Try not to be discouraged by missteps, unforeseen expenses, or other bumps in the proverbial road.

Bottom line: You are not your bank account

Financial stress can be overwhelming on multiple levels. You can feel blindsided by the emotional tension, which can prevent you from feeling capable and in control of your expenses. Managing money stressors, though, is easier when you can try to take the negative emotions out of the equation. Even if your finances look bleak right now, your value isn’t represented by the number in your bank account. You can build new money habits, make more informed financial decisions, and create the bank balance to match.

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Published October 7, 2021

Allaya Cooks-Campbell

BetterUp Staff Writer

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