Improving Financial Stress: Causes, Signs, and Solutions

Stress is a part of life. And one stressor that’s top of mind for many of us right now is financial stress. Money provides access to necessities and opportunities, but it’s also a common source of anxiety. With a few key strategies, you can learn to manage financial stress and have a healthier relationship with money that promotes financial stability and supports your mental and emotional well-being.

What is financial stress?

Financial stress is fear and anxiety over money. It can include worries about your expenses, debts, investments, and other personal finances. While financial stress isn’t a mental health disorder, it’s a real concern because money worries can create overwhelming stress and anxiety.

Based on findings from the American Psychological Association (APA), money stress weighs heavily on the minds of most Americans—so if you’re feeling anxious about money, you’re not alone. Financial stress isn’t just felt at home; it can contribute to mental health issues at work. One study found that 63% of workers are stressed about their finances, and 56% say it negatively affects their mental health.

What are the signs of financial stress?

One way to manage financial stress and anxiety is to recognize and name what you’re feeling. “When it comes to anxiety about money, people don’t necessarily know they’re dealing with financial stress. They just know life feels hard,” says Aja Evans, a licensed mental health counselor who specializes in financial stress. It’s normal to have occasional worries about money, but if financial stress and anxiety are getting in the way of your quality of life and daily responsibilities, consider reaching out to Lyra Health for support. Here are some signs that financial stress could be impacting your well-being:

• Feeling restless or excessively worried about finances, even during unrelated activities
• Aches, pains, racing heart, or other physical symptoms when thinking about finances
• Feeling overwhelmed, like you’re losing control or can’t keep up
• Avoiding financial decisions or transactions, such as making purchases, paying bills, or communicating with creditors
• Difficulty enjoying other parts of your life because you’re worried about money
• Feeling guilty, embarrassed, or ashamed about your financial situation
• Rigidity around budgeting (e.g., minor budget changes upset you)
• Feeling angry or irritated with people involved in your finances
• Trouble sleeping due to money worries

It’s common for people with financial stress to worry about not having enough money or beat themselves up for past financial missteps, but it can also show up in other ways. For example, people who’ve made solid money decisions may obsessively save or check their investments, or they may feel like they’ve failed because they aren’t further ahead.

Effects of chronic stress

Over time, stress (including financial stress) can impact us mentally and physically. For example, chronic stress may increase the risk of mental health disorders such as anxiety and depression.

Stress can also negatively affect our physical health. For example, stress has been linked to higher cortisol levels, which can increase the risk of many health problems like heart disease, digestive issues, and diabetes when left unchecked over a long period. Unfortunately, when money’s tight, one of the first cost-cutting areas is health care, which may make health problems worse and more costly in the long run.

6 tips for managing financial stress

You may not be able to control every circumstance that affects you or your finances, but you can use strategies to manage financial stress in healthy ways.

1. Talk to people you trust

It’s often considered taboo to talk about finances, and that can contribute to money anxiety. “Money is a major part of life,” says Evans. “It affects how we live and allows us to take care of ourselves. Yet somehow we ignore it and think it should ‘work out.’ But ignoring feelings only makes them worse.” Consider sharing your worries about finances with trusted friends, family, or mentors. You may be surprised how many will relate to you and offer creative solutions.

2. Seek financial advice

Consulting a financial expert can help because not feeling knowledgeable or confident about managing money can feed financial stress. Maybe you aren’t sure how to manage your money or even where to get started, and you’re not alone.  A financial advisor or even free online resources can help you take inventory of your money, create a budget, take steps to improve your finances, and monitor your progress.

3. Check in on your beliefs about money

It’s important to examine the beliefs about finances you’ve learned over time, likely without realizing it. Money beliefs can be influenced by family upbringing, personal experiences, cultural values, and the expectations we pick up from the world around us. Since stress about finances is often deeper than how much money you have, it can help to identify these beliefs and explore strategies for reframing them. A therapist or mental health coach can help.

4. Make a financial plan

A concrete plan is a great step toward easing financial stress. Be honest about your current financial situation so you can improve it. From there, you can create a budget. This gives you some power back and helps you avoid surprises like coming up short on bills. Once you have a budget, you can start looking at longer-term financial goals and seek advice as needed.

5. Practice self-care

Self-care practices like exercise, relaxation, mindfulness, connecting with friends, and participating in activities you enjoy can help you manage stress. Consider setting a goal to practice self-care every day, even if only for five minutes. And most importantly, practice self-compassion. Most people never learn about money management in school or from family, and it takes time to forge a path that works for you.

6. Seek mental health support when needed

Most people worry about money sometimes. But if money anxiety affects your daily life, or if you feel “stuck” and unable to make strides toward a financial plan, consider mental health support. “Financial stress is about money, but often it’s more about the feelings you have about your money,” Evans says. “A mental health professional can help you identify stress triggers and learn new tools and coping strategies.” Check with your school or employer to see if you have mental health benefits like Lyra, which can make this type of support free through insurance or low cost.

You’re more than your net worth

Finances are a concern for many people—even those considered wealthy. Acknowledging financial stress and taking steps to address it can help even if your bank account isn’t picture-perfect.

“People don’t lack value because they lack money,” Evans says. “We’re more than our net worth—and you deserve to feel better.”