money

Financial Stress Got You Down? Here's the Quick Fix ...

Janine Perri

WealthFit Contributor

Do your financial troubles keep you up at night? Is the anxiety from your money problems paralyzing? Financial stress can cause serious health and psychological problems—don’t take it lightly. Take these steps to feel confident about the future and reduce your financial stress.

With an increased cost of living, staggering personal debt, rising inflation rates, and stagnant wages plaguing many parts of the country, it’s no wonder financial stress has been on the minds of so many Americans.

Nearly one in four Americans have no emergency fund, and as many as 73 percent of Americans will die in debt. On a national scale, these trends are indicative of the state of the overall economy and can be used by policymakers to direct efforts toward corrective measures as needed.

On a personal level, these issues also lead to financial stress that affects both long-term decisions and everyday life. A 2017 report by the American Psychological Association (APA) found that 62 percent of Americans are stressed about money, whether it’s worrying about making ends meet or feeling bogged down by debt.

Living paycheck to paycheck can make you extremely stressed about making payments on time, and too much debt makes it difficult for you to get a mortgage or a loan.

Financial problems can have a snowball effect—the deeper you get in debt, the harder it becomes to get out. In extreme cases, these circumstances can lead to bankruptcy and foreclosures.

[ DOWNLOAD: Got debt? Use our DIY Debt Elimination Worksheet to build a step-by-step plan to get out of bad debt and boost your income. ]

The amount of financial stress varies from person to person. Here’s a rundown of how financial stress affects you mentally, emotionally, and physically—and how to get your finances (and life) under control.

The Effects of Financial Stress on Your Life

Financial stress affects all ages and demographics. Millennials are dealing with exorbitant student loans at the same time Baby Boomers are finding out they didn’t save nearly enough for retirement.

A lack of money or the burden of debt influences long-term decision-making. For example, younger generations are choosing to delay marriage or homeownership, and older generations are delaying retirement.

More immediately, financial stress can also affect your health, leading to anxiety, depression, and other issues. Anxiety has a mental component, such as an impending sense of doom, and it can also manifest as physical symptoms like panic attacks. Similarly, depression can lead to feelings of hopelessness, as well as sleep deprivation, poor eating habits, and worse.

Even in the absence of mental and emotional disorders, financial stress can cause a variety of bodily diseases due to the constant state of “fight or flight” mode.

Long periods of increased heart rate and adrenaline pumping through your veins can lead to heart disease, high blood pressure, insomnia, and gastrointestinal problems. Other destructive behaviors that can result from financial stress include eating disorders, substance abuse, or gambling addiction.   

If you experience any of these issues, take a two-pronged approach to solving the problem.

First, work with a medical professional to reduce symptoms and treat any illnesses.

Second—and equally important—reduce financial stress from your life by creating a comprehensive plan to eliminate (bad) debt, save for an emergency fund, and position yourself for a stronger financial future. Here are a few ways to do that:

How to Manage Financial Stress

1) Create a budget—and stick to it.

Budgets are not just about curtailing spending. A budget is a holistic view of how much money you earn and how much you allocate to specific expenses.

Your budget can also adapt from month to month. For example, your utilities bill in January may be much higher than in July, which means you can allocate those additional summer funds into other expenses or paying off debt.

A good rule of thumb is to prioritize your needs, and then your wants. Keeping up with the Joneses is not the way to get your financial situation under control.

Instead, ask yourself: what can you absolutely not live without? Some items include housing, utilities, food, and healthcare. Any minimum payment on student loans, credit card debt, or other debts also fall within this category of “needs.” Whatever is left over can be spent on wants and on savings.

To reduce expenses, eliminate subscriptions you don’t use. That membership to the gym you went to twice? Try home exercises or one of these exercise apps instead.

Those streaming services that cost as much as $40 per month? Share the expense with friends or family, or limit yourself to one of the cheaper options like Netflix or Hulu.

Using coupons, cash back apps, and store brand products rather than brand name are other tried-and-true ways to save money with minimal effort.

When possible, allocate some money each month for an expense for treating yourself so that you don’t feel like your budget is too restrictive. You will also be less tempted to spend money you have allocated for other things, like groceries, on a spur-of-the-moment purchase.

2) Make a plan for paying off debt.

The average U.S. household has $137,063 worth of debt—a staggering amount considering the U.S. median household income is $57,617. The most common forms of debt are mortgages, student loans, credit card debt, and auto loans. If your debt situation is overwhelming, take small steps to eradicate it.

Don’t forget, not all debt is bad! If debt is an investment in an asset, like real estate or education, and can generate positive cash flow then it’s good debt.

On the other hand, bad debt doesn’t generate any return on investment or enrich your life in a sustaining way. Maxing out your credit card to pay for designer clothes, a vacation you can’t afford, and taking Ubers everywhere are a few examples of bad debt. Know the difference between the good and bad, and make borrowing decisions wisely.

3) Save for retirement and your emergency fund, even if it is just a little per month.

Invest in a 401k, IRA, or Roth IRA depending on how much you can put away each month, what retirement accounts your employer offers, and what tax benefits you want to take advantage of.

If your company offers 401k matching, max out your contribution to take advantage of this “free money.”

Roth IRAs and IRAs are post-tax, but might be a better option if you want to max out your yearly contribution ($5,500 for both types of IRAs, compared to $18,500 for a 401k).

Another benefit of a 401k is that the money comes out of your paycheck pre-tax, so you won’t see it reflected in your take-home pay (and thus be tempted to spend it).

Likewise, determine a specific amount of money each month to put into your emergency fund and automate your savings so that the amount instantly transfers from your checking account to the savings account.

If you can’t trust yourself not to touch your emergency fund, open an online account or an account with another bank—one where you won’t get an ATM card and therefore cannot access the money right away.

Ideally, you should have at least 3 months of savings stored in your emergency account.

4) Start a side hustle, passive income, or another way to supplement your income.

The best way to take control of your financial stress is to make more money! Rather than spending money, spend some of your spare time making it with a side hustle you enjoy. Indulge your love of fitness by becoming a part-time fitness instructor or yoga teacher.

Use websites like Freelancer and Upwork to connect with clients looking for freelance writers, graphic designers, web developers, social media managers, and more. Side hustles are a great way to hone your entrepreneurship skills and see if you are ready to take the plunge into starting your own full-time business.

If you want to generate a source of passive income, start a blog, create an online course through Udemy, write an ebook to sell on Amazon, or become a savvy investor and let your money work for you.


Don’t let financial stress take over your life. No matter your age or financial situation, you are in control of your financial destiny and can make the changes you want to see in your bank account and in your life.

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Written By

Janine Perri

Janine Perri is a freelance writer and marketing professional with experience writing about business, marketing, education, travel, and language services.

Read more about Janine

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