How to Combat Financial Stress
Stress isn't good, and when it's financial stress, it can feel even more burdensome. Worrying about money can put a wedge in your relationship and affect how you live your life. Fortunately, there are ways to combat chronic stress from money problems.
Here's how.
Understanding Financial Stress
Financial stress is like any other stress you feel, but it has to do with money concerns. It can show up for many reasons, such as not having enough money to cover the daily cost of living or being unable to cover your monthly bills.
Financial stress can occur with couples when they don't see eye-to-eye on how to manage their finances or simply struggle to make ends meet.
Stress and Health
Regular stress is bad for your health, but financial stress has ripple effects that can cause even more damage to your health.
For example, if you have financial worries, you may not be able to seek regular health care. Unless it's an emergency, you may put off healthcare appointments and even struggle to pay for health insurance, making it even harder to seek medical care.
Financial struggles can also cause mental health problems like anxiety and depression. According to the Money and Financial Health Institute, 46% of adults in debt have mental health struggles.
The combination of lack of medical care and mental health issues can lead to more physical symptoms, such as stomach aches, headaches, trouble sleeping, and even heart disease.
Not pretty, I know.
Causes of Financial Stress
Financial stress can occur for various reasons, but the most common include the following:
Not enough income to make ends meet
Excessive expenses make it hard to get ahead
The inability to afford what you need/want for your family
Fighting with your partner about money
Lack of stable income
Not enough money saved for an emergency fund
Not enough money saved for retirement
Preventing Financial Stress
Fortunately, there are ways to deal with and even prevent money stress. Even those who feel they are in a terrible situation may be able to decrease and prevent intense, ongoing financial stress. These steps can help you get there.
Sticking to a Budget
A monthly budget is necessary for anyone, whether you have financial problems or not. A budget tells you where your money must go and how much spending money you have. It's a great way for couples to stay on track because a budget is straightforward, with — in theory — nothing to argue about because the budget says where the money must go.
If you don't have a budget yet, now is the perfect time to create one, and if you have one that's not working, consider revamping it. Work on financial communication so that you can figure things out as a team as constructively as possible. Money management is an ongoing task you must handle for the rest of your life, so getting used to making and redoing your budget often is important.
Reduce Expenses
If you have too many expenses, find ways to reduce them. Eliminating unnecessary expenses helps you to save money and reduce your financial anxiety.
As a couple, sit down with your budget to figure out where you can cut back. This isn't a time to point fingers or try to one-up each other; instead, review your expenses together, and decide which you can eliminate the most painlessly.
For example, cancel what you don’t need (i.e. unused subscriptions), and shop around for cheaper services for those you do, like insurance or cell phones.
This is a great way to get control of your finances and debt. If credit card debt is a part of your expenses, figure out a debt payoff plan that allows you to gain control of your finances again. Think about what you could do and how you’d feel if those monthly debt payments were instead going into your pocket!
Additional Income Streams
If you don't feel that you can make ends meet, consider additional income streams to increase your financial stability.
This doesn't mean you have to work 24/7, though. While a part-time job is an option, other ways exist to bring in more money, including passive income streams.
Work with your partner to determine what you can do to bring more money into the household. For example, you can freelance online, start a side hustle in person, or invest and earn passive income. The key is brainstorming to relieve stress, know you have each other’s back, and make each other feel better about your financial situation.
Build an Emergency Fund
An emergency fund helps you when unexpected expenses occur. For example, if you need unexpected car repairs, lose your job, or become ill and can't work, you'll feel much less financial stress if you know you have an account with three to six months of monthly expenses.
You won't build an emergency fund overnight, but regularly contribute to it to prepare yourself for anything. An emergency fund is a great way to manage stress about money, knowing you have funds to fall back on if something bad happens.
Slow and Steady Savings
In addition to your emergency fund, you should have an additional savings account. Whenever you can, work more savings into your monthly budget, so you have more money available when needed.
Combatting Financial Stress
If you've reached the point of financial stress and are worried about your mental and physical health or your relationship, here are some ways to help fight the stress.
Seek Support
It's okay to talk about your finances. So many Americans feel stressed about money, and it helps to know we aren't alone.
Find someone that can provide emotional support without judging. Consider a close friend or family member, especially if you know someone who has similar struggles.
You don't have to go into intimate details about your money troubles, but knowing you have a shoulder to cry on or someone to hold you accountable can help make things easier for you.
Evaluate Your Finances
Take inventory of your finances. Figure out what causes your financial stress, perhaps leaving you unable to sleep well at night.
With your spouse, list the issues you want to combat, and prioritize them. This may take a little work, because what bothers you might not bother your spouse and vice versa. Practice some give and take so that you both feel seen and heard.
If a part of your problem is that you can’t pay certain bills or make ends meet, consider seeking help. Contact your creditors to see if they have any payment arrangements or other options to make your bills more affordable. You may also consider refinancing loans or requesting an income-based repayment plan if you have student loan debt.
Create a Plan
After taking inventory of your finances, it's time to create a plan to alleviate your financial anxiety.
Create a plan that you can implement over time while leaving opportunities for quick wins. For example, if you have high-interest consumer debt that's making you stressed about money, create a plan to pay it off slowly and track your progress.
If you have chronic stress because your bank account runs low each month, find ways to save a little more money. Or if you worry about your spouse's spending habits, create a plan that allows them some freedom and you peace of mind.
Remember, your plan isn't set in stone and can be changed, especially as your financial goals or situation change.
Track Progress and Stress Levels
As you put these steps in place, track your progress. Notice if you feel like you have regained control of your finances, if you have paid down your debts, how you sleep at night, and if your physical health problems dwindle.
You won't see changes in your emotional well-being or finances overnight, but look for small wins. For example, if you pay off a small credit card, that's a win, or if you start a side hustle to make more money, you're on your way to improving your financial situation.
Work With a Professional
Don't be ashamed to work with a professional. Especially if you and your spouse can't get on the same page, or can't find your way out of credit card debt, get help.
A financial counselor can help you understand each other's views on money and how to handle one another's money stress. If you don't have the same views, or there are pressures like job loss or excessive spending patterns you don’t know how to address, a professional can help you understand one another and learn ways to fix the issues so that you feel more in sync with your spouse or partner.
FAQs
Is There a Difference Between Financial Stress and Money Anxiety?
Financial stress and money anxiety aren't the same things. Financial stress results from real problems you can put your finger on, such as job loss or low income. Money anxiety is generalized anxiety about money problems without any particular reason behind it. For example, you could have a high-paying job and plenty of money to make ends meet but still worry about money 24/7.
Is Financial Stress More Common During the Holidays?
Financial stress is normally heightened during the holidays, but it was even worse in 2022 with higher inflation rates. Over half of Americans said it was harder to afford the gifts they wanted to buy this Christmas because of the higher prices.
During normal times though, most people worry about finances during the holidays. There is often so much expectation to make the holidays 'perfect' that people put themselves into debt, but then they have to deal with more stress later because of it.
What Are the Symptoms of Financial Distress?
Everyone experiences different signs of financial distress, but some common symptoms include the following:
Only being able to afford the minimum payments on credit card debt
You constantly spend more than you earn
You use loans and credit cards to pay bills
You have little to no savings
Your finances affect your personal life
The Bottom Line
Knowing how to deal with financial stress is important. The emotional tension it can cause in a relationship is enough to create grounds for divorce. Fortunately, with the right steps, you can prevent or fix the stress caused by money problems and, in the end, save your marriage too.
Want to level up your game around money in your relationship? My free quiz will help you learn your Couple’s Money Personality Type AND how you can grow from there!
Adam Kol is The Couples Financial Coach. He helps couples go from financial overwhelm or fighting to clarity, teamwork, and peace of mind.
Adam is a Certified Financial Therapist-I™, Certified Mediator, and Tax Attorney with a Duke Law degree and a Master's in Tax Law from NYU. He is a husband, dad, and musician, as well.
Adam's wisdom has been shared with The Wall Street Journal, the Baltimore Ravens, CNBC, NewsNation, and more.
