Coping with Financial Stress

Money worries are one of the most common causes of stress. Unexpected expenses, price increases, income loss, and high levels of debt can cause pressure that may feel all-consuming. When money runs short, it doesn't simply create financial hardship. It can lead to feelings of shame, anger, fear, and depression. Those negative emotions can get in the way of the clear thinking you need to deal with your financial challenges. Here are some suggestions for coping with financial stress and navigating a path toward better financial and emotional wellbeing.

Focus on what you can control.

Don't panic about things that are beyond your control. You can't change the economy to bring prices down or create more and better-paying jobs. You can control how you spend your money and how you manage your debt and savings. There may be ways you can earn more money. By acting on things you can control, you'll begin to feel more in control of your life, and feeling more in control can help you stay calm and make good decisions.

Understand your financial situation.

When you're worried about money, it can be tempting to avoid thinking about it. However, avoiding financial challenges won't resolve them. Turn toward your money worries instead of away from them. Take the time to understand your finances as they really are.

Add up how much money you earn every month, and compare that to what you spend. Make a chart breaking your expenses down into categories. A budgeting worksheet or an app can help as you build this picture of how your money comes in and flows out. By gathering this information in one place, you can see how your income and expenses match up (or don't). Seeing the totals by category can help you understand where you might need to make adjustments. While it can be scary to start this process, having the information is empowering and sometimes even comforting.

Talk as a couple and as a family.

If you're facing money challenges, your partner and other members of your household are also affected. Once you understand your financial situation, talk about it in calm, respectful, and mutually supportive ways. Recognize that others may be scared about what might happen in the future. They may have different ideas about what to change to bring household finances into balance. By talking, you can agree on a plan, then follow that plan together.

Prioritize changes, and make them one step at a time.

Financial stress can feel overwhelming. You can make it feel more manageable by choosing a few changes and making them one step at a time. As you experience small successes, you'll gain the confidence and courage to make bigger and more difficult changes. (If you're facing a financial crisis, you may need to make significant changes quickly. Consider talking with a professional advisor right away.)

To correct a budget that is out of balance, you can either increase your income or cut your spending—or both:

• Consider options to increase your income. These might include working extra shifts at your job, applying for a promotion, asking for a raise, taking a second job, earning money from an outside activity, renting a room in your home, or exploring options for government support.
• Think about ways you might cut expenses. These might include conserving energy to reduce heating and A/C bills, carpooling or working from home more often, switching to less-expensive phone and internet plans, shopping from a carefully planned grocery list and using coupons, exploring less-expensive housing options, paying down high-interest debt, ending subscriptions you rarely use, eating out less often, or cutting back on concerts and other entertainment.
• Leave room for fun and pleasure in your life. Many activities that bring joy don't cost money. Spending time in nature, playing games, and many forms of exercise are free. Even extras that cost money are worth keeping if they help you stay calm and clear-headed. If your yoga class helps you relax or an occasional latte gives you a lift, don't punish yourself by eliminating those expenses.

Practice stress management.

Making progress in resolving your money challenges will help you feel more in control of your life, but the changes can take time. To keep your stress under control while you work on your finances, take care of yourself, and use stress-management techniques that work for you:

• Talk to trusted friends. It can be hard to talk about money and embarrassing, at first, to admit to having money problems. But opening up to supportive friends can help you put your worries in perspective and feel calmer. You don't need them to fix your problems, just to be a friend and help you feel better about yourself.
• Focus on the positive. Think about the progress you're making, rather than how far you have yet to go. Think of what you're grateful for in life, rather than what makes you unhappy. Look for the positive opportunities in the changes you're making.
• Exercise. Physical activity is important to good health. It's also calming when you're feeling tense. You don't need to pay for a gym to exercise. Go for walks, ride your bike, or find exercise stations in public parks.
• Eat healthy foods, and get the sleep you need. Nutritious meals and regular sleep will help you feel better, maintain your energy, and think clearly.
• Practice a relaxation technique. Try deep breathing, mindfulness, meditation, progressive muscle relaxation, listening to calming music, or spending time in nature. Find an activity or a technique that works to relax your mind and body when you're feeling anxious.

Ask for professional help.

Credit counseling and financial planning services offer expert guidance on money matters. Mental health counselors can help you deal with stress and change behaviors that may be contributing to your money worries. Your employee wellbeing program can provide stress management counseling and referrals to financial and mental health professionals.

For More Information

American Psychological Association. (Updated 22 March 2022). Managing your stress in tough economic times. Retrieved September 30, 2022, from Link opens in a new windowhttps://www.apa.org/topics/money/economic-stress

Caron, C. (25 July 2022). "I'm always worrying": The emotional toll of financial stress. The New York Times [online version]. Retrieved September 30, 2022, from Link opens in a new windowhttps://www.nytimes.com/2022/07/25/well/mind/stress-money-relationships.html

Robinson, L., & Smith, M. (Updated 30 August 2022). Coping with financial stress. Retrieved September 30, 2022, from HelpGuide: Link opens in a new windowhttps://www.helpguide.org/articles/stress/coping-with-financial-stress.htm

Scott, E. (Updated 29 July 2022). Financial stress: How to cope. Verywell Mind. Retrieved September 30, 2022, from Link opens in a new windowhttps://www.verywellmind.com/understanding-and-preventing-financial-stress-3144546