Financial Stress: Symptoms, Effects, & How to Cope

What Is Financial Stress?

Financial stress typically occurs after an event that negatively affects financial standing. Most people experience financial stress at some point, whether due to personal reasons or an economic climate that creates a sense of scarcity or instability. Buying a new home, struggling with debt, or losing a job can cause significant anxiety, and being stressed about money can impact your physical and mental health and well-being.

Signs & Symptoms of Financial Stress

Financial stress presents differently depending on the person and situation. For example, adults entering the career field face financial troubles associated with income, funding their lifestyles, or saving for future expenses and retirement. These anxieties may manifest as anger, irritability, or resentment toward more successful peers.

In late adulthood, financial stress can increase as individuals accrue healthcare costs, leading many to decide that retirement is impossible. Not only does financial stress impact psychological health but also physical well-being.¹

Signs and symptoms of financial stress may include:

• Withdrawal from social activities
• Increased anxiety
• Depression
• Physical pains (i.e., headaches, stomachaches, etc.)
• Avoidance behaviors (i.e., avoiding paying bills)
• Shame about financial situations
• Feelings of hopelessness

What Causes Financial Stress?

Stress over money can be caused by many factors, such as low socioeconomic status, unemployment, a lack of education, and income inequality. While some situations cause temporary financial stress, like being between jobs, factors like income inequalities and opportunity gaps can lead to chronic, persistent anxiety. Additionally, substance or behavioral addictions can contribute to further complications as individuals spend excessive amounts of money on their compulsions.

Below are the possible causes of financial stress:^2,3

• Job loss
• Bankruptcy
• Foreclosure
• Poor financial literacy
• Debt
• Unexpected costs
• Failed business ventures, investments, etc.
• Gambling addiction
• Shopping addiction
• Life transitions
• Lack of savings
• Financial abuse
• Supporting family members or others
• Preexisting mental health conditions
• Physical health conditions

Effects of Financial Stress on Mental & Physical Health

Financial stress and mental health concerns often go hand-in-hand. Research suggests financial stress can lead to new or maintained depressive symptoms and exacerbate psychological distress.^1,2 In addition to the mental health impacts, financial stress can increase inflammation, often causing pain and discomfort.⁴

Below are the possible impacts of financial stress on mental and physical health:

• Physical symptoms: Inflammation, increased physical pain, and poor health can result from financial stress.
• Anxiety: Having worries about finances has been correlated with clinical anxiety disorders.⁵
• Depression: Hopelessness or helplessness over money is something researchers have studied, finding that financial stress often leads to clinical depression.²
• Poor coping skills: Financial stress is often associated with emotion-focused coping rather than problem-focused strategies that can improve a situation and offer a sense of efficacy.⁶
• Delayed health care: One study showed that financial stress was associated with delaying or forgoing health care due to cost.⁷
• Trouble sleeping: Financial stress can lead to poor sleep, especially for those dealing with debt.^2,8 Such distress can inhibit good financial decision-making, creating a maladaptive cycle.
• Decreased self-care: Experiencing stress related to your financial situation can impact your health, quality of life, and life satisfaction.⁹ Many people with financial stress sacrifice self-care to meet their basic needs or because of related anxiety or depression.
• Changes in appetite: Financial stress can lead to changes in appetite and stomach issues. Roughly 40% of people increase their caloric intake during stressful times, while 40% decrease their intake.¹⁰

15 Ways to Deal With Financial Stress

Stressing about money seems inevitable when experiencing financial hardship. Most people experience financial stress at least once, so knowing how to handle these challenging times is essential. You can overcome money challenges and leave the stress behind with the right coping strategies.

Below are 15 tips on how to cope with financial stress:

1. Practice Stress Management Techniques

Practicing stress management techniques is the best place to start when struggling financially. Mindfulness, meditation, deep breathing, progressive muscle relaxation, and yoga are just a few evidence-based techniques to reduce tension and stress in the body.¹¹ Even with a lack of money, you can find relaxation scripts or audio for free online to guide your practice.

2. Identify the Cause of Your Financial Stress

Various issues can cause financial stress. These factors often include insufficient income, lack of assets, high debt, or poor money management. Identifying the cause of your financial stress is an important step in coping with and eventually overcoming the stressors.

3. Revisit Your Spending Habits

One of the best ways to stop stressing over money is to reduce your spending. Studies suggest that 78% of American workers report living paycheck to paycheck.⁶ Many of us live barely within or beyond our means. Consider cutting unnecessary expenses, depending on your responsibilities, liabilities, and needs.

4. Ask For A Raise

Asking tactfully and appropriately for a raise may be one of the easiest ways to increase your income, thus reducing financial stress and money problems. Of course, this request largely depends on your skills, performance, and length of employment with a company. However, asking for a raise can decrease financial burdens if you demonstrate merit.

5. Consider a Geographical Change

Living in certain areas costs more than others. For example, places like Boston, LA, or NYC rank among the most expensive cities. Consider moving to a cheaper location if you enjoy new experiences and have the leeway. Sometimes, a longer commute or smaller home can increase monthly funds, which is especially beneficial when stressing over money.

6. Change Your Ride

Dealing with financial stress may mean opting for other forms of transportation. Unfortunately, the convenience of owning a vehicle comes at a cost. Gas, car payments, insurance premiums, maintenance, and parking fees can be overwhelming.

Ditching the car may be one of the most financially beneficial options (if you can swing it). Public transportation, ride shares, or carpooling may be viable after selling a vehicle. Alternatively, buying used can reduce or eliminate car payments, so you can still affordably maintain a vehicle.

7. Set A Budget

Budgeting is the best tool for managing and reducing financial stress. Start by tracking your spending and keep a physical log of any transactions, including rent, loans, groceries, or extra expenses. From there, determine where to adjust and reorganize funds. You can even boost savings and investments after reducing your monthly budget, helping to decrease anxieties over financial struggles.

8. Take Action For The Future

Take action for your future by budgeting and putting money into savings, emergency funds, and investments. Start saving until you accrue three to six months (or more) of expenses in a secure account. Afterward, you can explore paying off debts or investing with a certified financial planner.

9. Get A Financial Advisor

Knowing what to do with your income can put you in a financially prepared situation. A professional has your best interests in mind, and they can help you make informed decisions about investments, loan payoffs, and other financial moves. These professionals cannot solve your financial problems or pressures but can offer possible ways to secure your future.

10. Boost Your Income in Other Ways

Consider finding creative ways to boost your income if financial concerns are causing stress. You can start a “side hustle” like selling handmade items or providing a service, like graphic design or event planning. Making wise investments can open the door to passive income, meaning your money works for you (rather than the other way around). Whether you get a second job, sell items online, or babysit on the weekends, making extra cash is one way to reduce financial stress.

11. Increase Your Financial Literacy

Financial stress and anxiety often correlate with low financial literacy. In fact, one study found that financial education and coaching can reduce financial stress and improve lifestyle behaviors, quality of life, and health outcomes.¹² Taking a budgeting or financial planning course or working with a trusted financial advisor can help reduce stress and empower you with information to make the best decisions with your money.

12. Remember to Take Care of Your Mental & Physical Health

Financial stress takes a toll on mental and physical health.¹³ Some people may overlook their health or neglect physical activity due to the stress associated with money problems.

Remember to care for your mental and physical health as you work to better your financial situation. Nourishing your mind, body, and relationships can go a long way in getting you through this difficult period of financial stress.

13. Automate Your Bill Payments

Automating payments for bills is a simple approach to managing financial stress. Doing so prevents late fees and can improve your credit score. Remember to ensure your account has enough funds to cover the monthly automated payments to avoid unnecessary overdraft charges.

14. Practice Gratitude for What You Have

Research has consistently shown that gratitude has the power to reduce stress.¹⁴ Practicing gratitude for what you have can also reduce the desire to obtain more things. Exercising daily thankfulness can save you money and increase contentment with what you already have, reducing the pressure to have more.

15. Set & Maintain Realistic Goals

Set and maintain realistic goals when making any changes in life. Goal-setting is a powerful way to stay on track toward desired outcomes while keeping you accountable. Remaining practical sets you up for success. Breaking larger goals into small, achievable action steps can build confidence, helping you develop freedom from financial stress.

When to Seek Help for Financial Stress

Therapy can help you cope with financial worries. A therapist offers a safe space to share your anxieties so you can stop stressing about money. Determining what kind of therapy you need can seem daunting, but cognitive behavioral therapy (CBT) is a common approach to consider.

CBT helps you explore how you think and feel about money, allowing you to make positive and long-lasting changes. You can also work with a financial therapist or social worker specializing in treating mental health issues related to finances. Overcoming financial stress is possible with the right support and guidance.