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Your guide to dealing with financial stress

Stressing over money?

Worries about debt, job security, and meeting financial obligations can take a toll on mental wellbeing, leading to increased levels of anxiety and depression, and decreased quality of life.

Illustration of someone looking at their empty wallet, looking stressed

Understanding the link between financial stress and mental health is crucial for building resilience and effectively coping with money worries.

Let’s explore the effects of financial stress on mental health, with top tips to help you navigate through difficult financial times while preserving your mental wellbeing.

What’s financial stress?

Financial stress refers to the emotional and psychological strain that results from someone struggling to meet their financial obligations and responsibilities.

It happens when financial resources, such as income or savings, aren’t enough to cover expenses, debts, or financial goals.

Common causes of financial stress include struggling to find employment, mounting debts, unexpected expenses, or not enough of a savings buffer. This can lead to feelings of anxiety, worry, and insecurity about your financial future.

The effects of financial stress on mental health

Financial stress can be an overwhelming burden that affects many aspects of our lives. The constant worry about money can lead to feelings of helplessness, hopelessness, and even shame.

Here are some common ways money stress can impact mental health:

Anxiety and depression

Constantly stressing over money can trigger anxiety and depression, making it difficult to concentrate, sleep, and find joy in daily activities.

Physical health worries

Prolonged financial stress can also manifest physically, resulting in headaches, digestive issues, and even weakened immune systems. Those can in turn trigger health worries, adding another layer of anxiety to financial concerns.

Relationship strain

It’s important to take into account the effects of financial stress on a marriage and relationships in general. Money stress can strain relationships, leading to conflicts and communication breakdowns.

Reduced academic or work performance

Financial stress can affect academic and job performance, potentially leading to a vicious cycle of decreased productivity and fear of job loss or academic failure.


Some people may avoid confronting their financial situation and live in denial, which can further exacerbate debt stress and money problems and increase feelings of guilt and shame.

10 tips to deal with financial stress

While money worries may seem insurmountable, there are practical and effective strategies to help manage them and safeguard your mental health.

Try these tips to better cope with financial stress:

1) Be honest with yourself

Acknowledging your financial situation can be scary, but it’s the first step toward finding effective solutions. Set aside some time to sit down and do a deep dive into your situation.

Create a comprehensive list of all your debts, income, and expenses. While this may initially induce anxiety, having a clear understanding of your finances empowers you to make more informed decisions.

2) Set (realistic) goals

Time to set some objectives for yourself! Breaking down your financial goals into achievable milestones can make them less overwhelming.

Start with small, attainable targets, and gradually work toward larger ones. Don’t forget to celebrate each milestone you achieve! A sense of accomplishment can help to keep the motivation and momentum going.

Here are some ideas of achievable goals to set:

  • Set up an emergency fund goal and put away whatever you can spare each month. It will soon add up!

  • Work out how much debt you can afford to clear each month and set up a direct debit.

  • Set a short-term saving target to buy a present or replace your old phone.

  • Check if there are any subscription services you can cancel, such as streaming services and unused gym memberships, and cancel them.

3) Create a reasonable budget

A well-structured budget is an essential tool for dealing with financial stress effectively. But where to start?

First, categorize your expenses into essentials and non-essentials. Find areas where you can cut back on spending, such as budgeting for meals and finding cheaper or even free entertainment options.

Use this budget to guide your expenses in the coming weeks and months, and readjust if necessary.

4) Get professional guidance

If money stress becomes overwhelming, consider speaking to your bank, a debt advice charity, or a nonprofit organization. They can provide expert advice and offer strategies to navigate through challenging times.

Your place of work or study might have services in place when it comes to financial wellness. Don’t hesitate to take advantage of the resources they offer.

5) Try mindfulness to reduce stress

Mindfulness and relaxation techniques such as meditation, deep breathing exercises, or yoga, can help better cope with anxiety.

Why not try one of these breathing techniques if you’re feeling overwhelmed by money worries?

6) Don’t fall into the comparison trap

With social media constantly showing us the seemingly perfect lives of others, it's easy to fall into the comparison trap and feel inadequate.

Remember that appearances can be deceiving, and everyone faces their own financial challenges. Focus on your journey and progress instead of comparing yourself to others.

7) Build an emergency fund

We’ve already mentioned it, but creating an emergency fund can provide a safety net during unexpected financial crises. Why not make it one of your first financial goals?

Aim to save a portion of your income regularly until you have three to six months' worth of living expenses saved.

8) Communicate openly with loved ones

Money worries can often make us feel vulnerable and even ashamed, but it’s essential to be honest about them with your loved ones to avoid future conflicts and misunderstandings.

Try to be open about your financial situation and worries with trusted friends or family members. You might be surprised to find that you’re not the only one who is struggling.

Most people have had financial worries at one time or another and will understand and react with kindness. If they don’t, try not to beat yourself up. You are trying to take the steps you need to look after yourself and there’s no shame in that.

9) Find affordable (or free!) ways to relax

Retail therapy won’t help if you’re dealing with financial troubles. Seek affordable or free stress-relievers to unwind and reduce money anxiety.

Activities such as going for a walk in nature, spending quality time with loved ones, or engaging in hobbies can offer much-needed relief without adding to financial burdens.

We asked the community for their favorite free mood boosters. Here are some of their top tips:

  • "I like to play upbeat music and get in a cute outfit. The process of getting ready makes you feel more put together and helps a bit."

  • "For me, it's watching horror movies. They honestly calm me down."

  • "Going for a walk, at least for 30 mins."

  • "I find drawing quite soothing and it only takes a pen and paper!"

  • "Looking at the dogs in my local park."

You can find more affordable strategies to deal with anxiety here.

10) Focus on what you can control

Money stress often arises from factors beyond our control. Concentrate on aspects of your financial life that you can manage, such as budgeting, saving, and finding new opportunities to increase your income.

Finding ways to manage and alleviate financial stress is essential for our wellbeing. If your finances feel out of control, get some professional advice. And if your mental health is taking a hit, seek professional support here too. There is a way through.

Sometimes the key to dealing with financial stress is to talk to the people we trust. They can provide us with the emotional support that we need to keep going and bring some much-needed perspective to the situation. You’re not alone!


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