I have a friend who was feeling really anxious one month. When her second paycheck hit her bank account, her mood lifted. After avoiding social events for a couple weeks, she was ready to go out and have fun.

Over dinner, she had a lightbulb moment when she realized she didn’t need therapy — she just needed to get her finances in order. 

Money isn’t something most people talk about, so financial stress often lurks under the surface.

If you’re feeling stressed and you’re not sure why, money could be playing a role.

Today we’re going to explore the link between financial stress and mental health and share five effective steps to handle financial stress. 

Are financial stress and mental health connected?

Financial stress is indeed a primary source of stress because we need money to survive — it’s not optional. 

We need money to eat, travel to work, take care of our health, and so much more. Think about how many times you swipe your credit or debit card in a day. If you weren’t able to do that, what would happen?

Any type of stress may affect your mental health, so financial stress and mental health are absolutely connected.

Stress is a broad term — what does it actually look like?

Symptoms of stress, including financial stress, can include:¹

  • Excessive worry 
  • Difficulty focusing
  • Memory issues 
  • Negativity
  • Indecision 
  • Irritability
  • Digestive issues
  • Fatigue
  • Social withdrawal

… and much more. 

Stress can look different for everybody. 

When you’re stressed, your risk of developing a mental health issue may increase.²

​​Researchers at the University of California, Berkeley have shown that stress can cause changes in the brain that make you more prone to disorders like anxiety and depression.³

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How to tell if money is a source of stress for you

If you think that money might be stressing you out, ask yourself these questions:

  • Have you been feeling worried and anxious for no obvious reason?
  • Do you frequently check your bank account and worry about money?
  • Are you someone who spends without a budget?

If you’re nodding your head, money could be a source of stress for you. 

What causes financial stress?

Financial stress isn’t always obvious. Part of the reason for this is that society tells us that talking about money is taboo, so many of us struggle in secret. 

There are three key triggers for financial stress:

  1. Being unaware of your spending and earning habits
  2. Spending more than you earn, despite your best efforts 
  3. Underearning

When you address these areas, your financial stress might decrease or disappear altogether. 

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How to reduce your financial stress

If money contributes to your stress levels, you can take steps to strengthen your relationship with money and reclaim control of your dollars. 

Let’s dive into the five steps you can take to handle financial stress:

Track your income

Many people don’t know exactly how much they earn  — especially those with multiple sources of income.

Choose a financial tracking app, or use a simple spreadsheet to track exactly how much you earn every month.  

Track your expenses

As many people as there are who don’t know exactly how much they earn, there are probably more who don’t know how much they spend.

Financial education is not always required in school, and many people are unaware of how much they spend.

Tracking every purchase is challenging. At a minimum, we recommend tracking your fixed expenses using a financial app or spreadsheet. Fixed expenses include rent, car payment, gas, insurance, phone bill, and any other payment that’s required regularly.

Subtract your fixed expenses from your income, and write down what you have left over. That number is what you have for saving, shopping, dining out, and any other flexible spending. 

Want to take it a step further?

Get to know your spending habits on a deeper level by tracking all your purchases. There are many financial tracking apps that make this fun and easy. Once you get in the habit, it becomes second nature.

Even if you don’t track every coffee, you’ll still be developing a better understanding of your finances and improving your relationship with money.

Trim your spending

Take a look at your primary credit card and debit card statement from the past 30 days. Is there anything you can trim?

Look for subscription payments you don’t use, purchases that don’t bring you joy, and items you don’t really need at this point in your life.

Prioritize what you love

While moderation can be important when it comes to money, like with food, restrictions can backfire. In the same way we might overeat after restricting ourselves, we might eventually overspend if we always deny ourselves.

Just as you looked at your bank statement to see what you can trim, take note of the purchases that brought you true value and joy.

What do you love spending money on? What are your top three values?

Perhaps you love high-quality groceries, self-care treatments, or clean beauty products. When you’re aware of your overall budget, you can cut costs on things you don’t love and buy things you do love without guilt.

Less guilt could mean less stress.

Consider self-worth

There may be a link between self-worth and income.

A confident person is more likely to negotiate a higher salary or pursue a raise.

How do you feel about yourself and your skills?
Does it feel scary to ask for what you deserve?
Could you be selling yourself short?
Are there any skills you’d like to develop?

You deserve to feel properly compensated, and your skills deserve time. Working on your confidence and skills may help increase earnings and decrease financial stress. For now, simply journal on these questions and take stock of where you are today. 

Final Thoughts

Money may feel like an awkward topic, but it’s incredibly important to talk about it.

If you have symptoms of stress and don’t feel particularly strong in your finances, consider the five steps we’ve shared to handle financial stress. 

Is your relationship with your finances healthy, or could it use some attention?

Have a friend who would be interested in this article? Share away using the buttons below! They’ll be thankful.

Listening Morale Professional wellness

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