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Understanding and Overcoming Financial Stress

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Finances form a significant part of our lives, especially as adults. Your financial stress determines what you can buy, the services you can access, and the lifestyle you lead.

Managing one’s finances can be challenging, especially if you don’t earn enough to build wealth. Financial problems like debt can quickly rack up, leaving you stressed and anxious.

In 2023, 73 percent of Americans ranked their finances as the top stressor in their lives. Millennials and Gen Z, the younger generations, are more stressed about their finances than older generations.

Financial stress can have several ill effects on one’s health and overall quality of life. If you’re concerned about your level of financial stress, read below for some tips on overcoming it.

The Effects of Financial Stress

Financial stress can expand beyond the limits of your wallet or bank account. It can have tangible physical manifestations that affect your health and overall well-being. 

Understanding the extensive effects of financial stress is crucial when managing and mitigating its impacts. Here are some ways financial stress can manifest itself in your life:

Insomnia and sleep problems

Debt and other financial problems can lead to heightened stress and anxiety. Thinking about these issues can cause you to toss and turn at night, causing you to lose sleep. 

Over time, a lack of sleep can be damaging. It can develop into chronic insomnia and contribute to a range of health issues like impaired cognitive abilities and weakened immunity.

Weight changes

Financial stress could trigger changes in someone’s appetite. It can lead to emotional eating and cause people to seek comfort in food, resulting in weight gain.

On the other hand, this stress can also cause people to lose their appetite, leading to rapid or unhealthy weight loss.


A study published in 2022 found a significant association between financial worries and psychological distress.

Financial problems can create a persistent state of worry or anxiety. These issues can make you fear the unknown or the consequences of insufficient funds for your needs and obligations.

Suffering from worry for an extended period can cause anxiety disorders and other mental health problems. Some symptoms include increased tension, restlessness, and difficulty concentrating.


Aside from anxiety, financial worries can cause feelings of depression and hopelessness. Some financial problems can seem insurmountable, especially when you don’t have the resources to recover. These feelings can lead to hopelessness, which can affect your life, including your daily functioning, work, and relationships.

Relationship problems

Chronic stress, particularly caused by financial problems, can cause changes in one’s psyche, energy levels, and interactions with others. As a result, financial stress can lead to relationship problems, strained communication, and disagreements with loved ones.

Money can be a particularly sore topic for couples. A recent survey found that 35 percent of people see finances as a primary source of conflict in their relationships. Fifty-four percent of respondents in another survey see debt as a significant reason to consider divorce.

Social withdrawal

Financial stress can massively impact your view of yourself and your relationship with others. People undergoing financial stress may withdraw from social activities or situations due to feelings of guilt, shame, or inadequacy compared to those around them.

This isolation can lead to a vicious cycle. Since people suffering from financial stress withdraw from others, they risk their relationships and support system. This situation can exacerbate mental health issues, which may cause further loneliness and disconnection.

Poor physical health

Beyond its effects on mental and psychological health, financial stress can also cause physical symptoms and health problems. 

Chronic stress, including financial stress, can lead to various physical health conditions, such as the following:

1. Obesity and eating disorders

2. Cardiovascular disease (e.g., high blood pressure, heart disease, heart attacks, strokes, etc.)

3. Menstrual problems

4. Skin and hair problems (e.g., acne, eczema, psoriasis, hair loss)

5. Gastrointestinal problems

6. Sexual dysfunction

This toll on one’s physical health can open up many other problems. It can add to one’s stress levels, especially when one doesn’t have the financial means to seek medical help.

Financial Stress Leads Unhealthy Coping Behaviors

Stress can be challenging to manage, especially without a robust support system and the resources necessary to recover. Many people suffering from financial stress may turn to substances like drugs or alcohol to cope with their problems.

These unhealthy coping mechanisms can add to their existing issues. It may cause further debt, stress, and deterioration of their mental and physical health. It can also become a slippery slope to addiction, which can damage relationships and exacerbate other problems.

How To Overcome Financial StressHow to overcome financial stress financial stress

Financial stress can be overwhelming, especially as it affects multiple aspects of your life and relationships. However, your situation doesn’t have to be entirely hopeless. 

Here are some tips to help you get your finances in order. You might not see the results overnight, but building healthy habits can allow you to regain control over your financial situation.

1. Talk to someone

Financial problems often come with guilt or shame, which can stop you from talking to people about them. However, keeping these problems to yourself can lead to further isolation and personal distress.

When you are in dire financial straits, it’s a good idea to open up to someone you trust. They don’t necessarily have to give you advice or solve your problems. They can simply be an outlet for your problems and frustrations.

Discussing your financial situation can help ease some of your burdens, and your person can provide emotional support and valuable perspectives.

If you want advice, you can reach out to a financially savvy loved one. You can also consider contacting a financial advisor for professional assistance.

2. Assess your finances to overcome financial stress

The first step to resolving your financial issues is to evaluate your current situation. Examine your income, expenses, assets, and debts to understand your financial standing.

During this process, identify your spending patterns, which are likely the most significant drivers of your financial burdens. This process can help you identify your triggers and manage your behavior accordingly.

Identify where you can cut your spending by looking at your expenses and habits. You can minimize or eliminate impulse purchases or make your meals instead of getting takeout or eating at a restaurant. You can also cut out recurring subscriptions for items or services you don’t use often.

As you undergo this process, give yourself some grace and time to change these habits. Accepting your past mistakes and not getting too hung up on them is a healthy mindset for improving your financial situation.

3. Understanding the debt cycle

Debt is a major contributor to financial stress. Acquiring too much debt that you can’t pay off can become overwhelming. 

If you have incurred a debt problem, there is a way to resolve it. You can start by understanding debt and creating a strategy to get out of it.

Make a list of all your outstanding debts and categorize them. Write down the interest rates, payment schedules, and potential fees (like late payment penalties) associated with each debt.

It’s advisable to pay off debts with the highest interest rates to avoid taking on unnecessary interest over time. You can also talk to your lenders and negotiate more favorable terms, such as lowering interest rates or extending your loan term.

4. Create a plan to overcome financial stress

Financial stress can stem from various sources and factors. However, each one will have a solution. You just need to make a plan and stick to it.

Establish short-term and long-term goals after assessing your current financial situation and habits. You can then break down these goals into manageable steps to make your milestones achievable and realistic.

5. Find ways to earn to reduce the financial stress

One way to resolve your financial issues and minimize the stress that comes with them is to grow your income. This step gives you more money to work with, which allows you to repay debts and sustain your lifestyle without too much restriction.

You can increase your income in various ways, such as getting a pay raise or taking on an additional job or side hustle. Part-time work, freelancing, and side gigs are good options, especially if you also have a full-time job.

6. Stick to a budget

Creating and sticking to a budget is a habit everyone should practice, but it is particularly important when facing significant financial challenges. Every cent counts, and planning your spending is vital to sustaining yourself and paying off your financial obligations.

Immediately set aside an amount for your bills and savings upon receiving your paycheck. Then, budget for your necessities like groceries. You can spend the leftover money on little treats and wants.

If you tend to overspend, it’s a good idea to track your spending regularly to see your expenses in real time. There are personal finance apps and dedicated budgeting apps you can use on the go. Pens and paper are also reliable tools if you prefer the manual route.

7. Save up

Savings are necessary to create a financial safety net for yourself should emergencies arise. An emergency fund can help you with unexpected expenses.

You don’t need to have a massive savings account right away. You can start small, as much as your budget allows, and build this amount over time. The important thing is to teach yourself the habit of saving.

8. Automate some financial transactions

Automation is a valuable tool to help you keep up with your financial obligations. 

Setting up automatic transfers can help you pay your bills and obligations on time. This practice also minimizes the risk of overspending or accidentally spending the money you need to pay your bills. It also helps you avoid getting charged late payment fees.

Aside from your bills, you can also set up automatic transfers to your savings account. This way, you can ensure that you consistently contribute to your savings or build your emergency fund.

9. Track your progress

Monitoring your progress is a vital part of planning your finances. This step allows you to identify and celebrate your milestones and adjust for specific goals.

You can look at your savings, progress on your debts, and overall financial habits to make an assessment. Be flexible and adjust your strategy to accommodate unexpected circumstances or changes in your lifestyle.

Take Charge of Your Finances

Financial stress can be incredibly taxing and overwhelming. Sometimes, it can seem like there’s no way out. However, your financial problems will always have a solution.

Overcoming financial stress is an ongoing process that requires commitment, discipline, and perseverance. Building good financial habits is the first step to resolving the sources of your stress. 

Remember that progress takes time. Give yourself grace and maintain a sound support system to help you overcome challenging times.

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