Financial stress affects nearly half of U.S. adults. According to a 2024 Bankrate survey, 47% of people say money negatively impacts their mental health, causing anxiety, sleep loss, and more. If this sounds all too familiar, you’ve come to the right place.
Inflation and rising prices—cited by 65% of respondents—continue to add pressure, with the economy's future remaining uncertain. While we can't control the economy, we can each take steps to manage financial stress and ease its impact. Here’s how to start.
What are the main causes of financial stress?
Financial stress is any mental discomfort, pressure, emotional strain, or tension related to one's finances. It can be caused by one or a mix of different money-related issues.
- Low income
- Not having enough income for basic expenses (e.g. rent, groceries, utilities)
- No discretionary money
- Being in debt
- Lack of emergency savings
- Lack of a stable income
- Being unprepared for retirement
“For individuals, worries about making ends meet, repaying loans, or managing unexpected expenses can lead to feelings of helplessness and anxiety,” says Dr. Max Doshay, a licensed clinical psychologist, CEO, and co-founder of Monima Wellness. “Within families or relationships, disagreements over spending habits or financial goals often create tension and erode trust, leading to strained relationships.”
According to Bankrate, 65% percent of U.S. adults cite inflation as the primary cause of their financial stress, and 28% mention rising interest rates. By extension, it would seem that the country's economy is a common source of stress for most people.
How financial stress can affect your mental health
Because money is a big and important part of our lives, financial stress and mental health walk side by side. When your financial life gets bad, mental health typically follows suit.
“Persistent financial worries can lead to heightened anxiety, depression, and even physical health issues such as chronic headaches, sleep disturbances, or gastrointestinal problems,” Doshay says. “On top of that, prolonged stress can impair focus and decision-making, making it more difficult to address financial challenges logically and effectively.”
As your mental health declines, more physical problems might appear or rise as a consequence. “People start to lose sleep, their productivity drops, and they may even develop physical symptoms like headaches or high blood pressure,” says Dr. Sarah Jeffries, a psychologist (MSc) and CEO of the Mental Health First Aid Course. “I’ve noticed that financial worries can also affect self-esteem, especially when people compare themselves to others or feel they aren’t meeting societal expectations.”
How to deal with financial stress
If you're feeling burdened by financial stress, financial anxiety, or any mental symptom caused by money-related issues, there are specific actions you can take to ease the stress.
1. Focus on what you can control
You can't control inflation and grocery prices, but you can control what you buy and don't buy. So start there—and maybe dial back on watching, reading, and listening to countless news reports detailing the minutia of the economy.
This doesn't mean you should completely ignore the news about inflation or the economy—just don’t let it take over your mental feed. “The key is to break the cycle of overwhelm,” Jeffries says.
Then, focus on aspects of your financial life that only depend on you. “Start with small, actionable steps—like creating a simple budget or tracking daily expenses—to regain a sense of control,” she says.
2. Create a budget
Besides giving you a sense of control, a budget also helps you see exactly how much money you have coming in and where you're spending it. With this clarity, you can make adjustments that could improve your financial situation.
For example, if your internet plan is expensive but not essential for you or your family, consider switching to a cheaper option. If groceries are taking up too much of your budget, could you try switching from name brands to generic ones?
A big part of creating a budget is also determining how much of your income goes to what. Because you're struggling, prioritize your basic needs (e.g. rent, utilities, groceries, transportation), debt repayment, and saving the amount you can—even if it's $10 a month—until your situation improves.
3. Set achievable financial goals
Think about one financial aspect of your life you could realistically improve and make it a goal. It doesn't matter how small or simple it is, as long as it is achievable. “Even small wins can build confidence,” Jeffries says.
Circling back to the $10-a-month example, you could make it a goal to save $120 a year. Or perhaps you have a small credit card debt that it's possible to repay in a few months if you get organized.
When outlining your goals, remember to get anyone you share finances with involved. “Discuss goals and priorities honestly and collaboratively to reduce conflict,” Doshay says. Being in sync and working together towards a goal can help alleviate financial stress and avoid problems.
4. Find a new source of income
If possible, consider finding a second source of income, like a second job or a side hustle. It could be something as simple as pet sitting, as long as it brings you some extra income. With more money coming in, you might feel more financially secure and improve other aspects of your life.
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5. Talk with a trusted person
It's a cliche, but it's true: Talking to someone can make you feel better. Keeping your feelings to yourself can further the anxiety, stress, and anguish. So, go to someone you can trust to vent a little or ask for advice—the right person can help you find solutions you've never thought of before. “Talking openly about money, whether with a partner or a trusted friend can be incredibly empowering,” Jeffries says.
If budget allows, seek professional help, both for your finances and mental health—especially if your situation is critical. “For chronic or debilitating financial stress, consider seeking professional support from a therapist or financial counselor to build strategies and gain a fresh perspective,” Doshay says.
6. Try stress management techniques
If you're constantly stressed out or anxious, try implementing some stress management techniques in your routine. This could be meditating, exercising, eating more nutritious foods and getting regular sleep, or practicing mindfulness.
“Practicing mindfulness can help reduce the mental chatter that financial worries bring,” Jeffries says. “For example, taking five minutes each day to focus on breathing can calm the nervous system.”
You got this
We all know that your financial circumstances don't solely depend on discipline or hard work. Inflation and high cost of living can definitely take a toll on the finances of regular people, which causes financial stress. But when you focus on what you can control, like your budget and money goals, and take care of yourself both physically and mentally, it can significantly reduce stress and improve your financial life little by little.
Read this next: How to Live Within Your Means