How to Deal with Financial Stress

Financial stress is very common – an estimated 44% of Americans rank money as the #1 thing they worry about. And, with millions of folks laid off or on furlough with no end in sight, if you're one of the many worrying about money now more than ever, you're not alone.

Feeling concerned about finances makes anyone want to shove their proverbial ostrich head deep in the sand – but actually, the only way to feel better about financial stress without completely ignoring it is to understand it, confront it, and make a plan to deal with it.

What is financial stress?

Financial stress is any stress reaction that occurs due to your financial situation, and is often exacerbated by a feeling of scarcity. This stress can be short-term – for example, unexpectedly losing money or learning that your car repairs cost twice as much you imagined. But it can also be long-term or chronic – a common example being student loans that may take 10 or more years to pay off.

As with many different types of stress, your reaction to thinking about money might be physical or psychological. Some people get literal headaches when writing out their budget for the month; others can’t sleep at night from excessive worry and spiraling thoughts that darkly say, “No one will marry you because you have no money.”

Other common physical symptoms of financial stress include stomach aches or stomach ulcers, weight gain or weight loss, acne breakouts and a weaker immune system. In terms of psychological symptoms, racing thoughts, inability to focus, and feeling negative are all signs of financial stress.

Understanding the impact of financial stress

Recognizing how (and why!) financial stress plays out in your body and mind is the first step in finding a way to decrease this anxiety, worry, or frustration. Considering where you are in your life at that moment is a great place to start.

Here are some examples of common life stages when financial stress reactions pop up:

• College. College may be the first time people gain financial independence, and the newness of being an independent financial decision maker, as well as not having established credit or savings to pull from, can add to feelings of stress and uncertainty. Being away from home for many college students means learning to pay their own way, for food, housing, tuition, textbooks, plus the pressure to engage in costly social activities… no wonder college students often find themselves worrying about money!
• Beginning of a career. After college, many people have to face the reality of student loans. And for anyone, the start of a career is daunting – finding a job, negotiating your salary or rate, then finding a lifestyle that works for your budget is new, can be high-stakes, and often becomes a major stressor.
• Marriage. Marriage brings an incredible amount of change – especially when it comes to money, as many couples discuss whether or not to combine their finances. Being upfront and honest about your financial situation with your partner can cause worry about rejection, or new discussions about balance, power, and expectations in the relationship. And even paying for a wedding can be mind-numbingly expensive:  according to BusinessInsider, weddings in New York City average $76,944 (yikes!).
• Growing family. If finances are a stressor for you as an individual, adding kiddos or other family members to the mix can certainly be an additional strain. Even anticipating having kids is enough for many people to experience stress: planning and saving for any unexpected or expected costs can be a daunting new task.
• Retirement. Many view retirement as the great reward at the end of a career. While some are able to put money away throughout their working lives, others are not able to, or are not able to save as much as would be needed to sustain. Not to mention the intimidating retirement plans – IRA or 401k? To roth or not to roth? Then, when you’re at last ready to retire, determining a new lifestyle based on your retirement savings has huge implications for the longevity of your funds.

Break down all your stress into more manageable pieces

After understanding where your stress is coming from, it’s time to break it down into smaller, more manageable pieces to address. To start tackling your stress, break down your spending and costs into categories, and then break those categories down into measurable, discrete items.

Take the following examples:

Housing

• Rent/mortgage
• Maintenance
• Utilities (internet, water, electricity)

Living expenses

• Food and groceries
• Clothing
• Transportation
• Health insurance and health expenses

Debt

• Student loan debt
• Credit card debt (per credit card)
• Car loan
• Medical debt
• Hobbies, leisure, and social activities

Non-essentials

• Daily expenses (e.g., art materials)
• Weekly expenses (e.g., dinners out with friends)
• Monthly expenses (e.g., travel)

Considering all your incoming resources and outgoing expenses can help you to set a budget, make priorities, and feel more equipped to tackle each source of stress, piece by piece.

Examine spending behaviors that contribute to financial stress

Now that your spending is put into categories, consider where you can make changes to your spending behaviors to decrease financial stress.

Some common spending behaviors that can contribute to financial stress include:

• Impulse spending. Remember the adage “Never go to the grocery store hungry?” Well, the bad news is we’re always hungry for something, whether that’s actual food or if it’s clothes, home decor, cleaning supplies (which sounds productive but it might still be an impulse!), or just some cute trinket you couldn’t pass up.
• Big ticket purchases. Ask yourself, “Do I definitely need a newer/bigger/shinier  ____?” If you do need it to survive, feel comfortable knowing that you are spending your money productively and for something that is necessary and don’t beat yourself up over the cost. If not, though, consider skipping the purchase for now.
• Helping others before yourself. This one gets tricky, but if you’re spending your money making sure other people are enjoying themselves, then that takes away from your finite financial resources. There are of course exceptions to this, but it’s worth thinking about how much money you spend for your friends, with your friends.

As you devise a plan to tackle your financial stress, pay attention to what feels comfortable to you and what feels even more stressful to consider. Look for those behaviors that are within your control to change, and remember, the goal is to work on your finances, but it’s also to make sure that you feel less stressed!

Enlist support from sources that feel the most comfortable to you

When you’re ready to address financial stress, find some supports to help hold you accountable.

Social supports might be friends, family, financial advisors, mentors, or even support groups. While it may be best to find someone who can relate to your situation, speaking with anyone that you trust makes a difference – someone to help you keep on track, check in with you how you feel, and join you in celebrating progress!

Consider working with a therapist to address financial stress

When financial stress becomes overwhelming, some people turn to coping behaviors such as gambling, excessive or harmful drinking and drug use, or isolation from loved ones. If you notice unhealthy patterns – that is, ways that you’re making yourself feel better in the moment but have a negative impact on your physical or psychological health – then know that talking to a professional might be helpful.

Types of therapy that can help with financial stress include cognitive behavioral therapy, mindfulness-based therapy, or even couples therapy, if your financial stress is experienced within the context of a relationship.

Therapists who focus on practical, solution-focused therapies can also help you build (and stick to!) a budget that will help you feel more in control of finances, while also taking a look at the beliefs, values, and behaviors that drive spending habits.

Take advantage of additional resources

When it comes to dealing with financial stress, you are not alone out there! There are plenty of resources to look into regarding personal finance. Here are a few examples:

• Apps. Some well-regarded budgeting apps include Mint, Personal Capital, and You Need a Budget.
• Books. Reading about personal finance theory may be helpful, especially from books such as The Simple Path to Wealth or Women & Money.
• Online videos. TED Talks, YouTube videos, or other online material are good for the audio-visual learners out there. There are so many people producing quality content, write out the keywords related to your stressors and give them a search!
• Podcasts. Avoiding the finance bros talking about mega-investing for those who already have financial security, some really insightful podcasts are Her Dinero Matters (bilingual content!), Mad Fientist, and Clever Girls Know.

So, feeling up for the challenge? Even though you’re feeling stressed out, even sitting down to make a plan to deal with financial stress shows that you’re doing something to help yourself – and that’s a big step!