Money and Mental Health: Information and Resources for Coping With Financial Stress

Financial stress occurs when you experience pressure related to your financial situation. A 2020 survey by the American Psychological Association revealed that “72 percent of Americans reported feeling stressed about money at least some time in the prior month.” In some cases, financial stress is unavoidable. However, there are steps you can take to help prevent and manage it.

Common Causes of Financial Stress

Financial stress can be caused by a wide range of monetary concerns. However, there are some common scenarios that prompt financial stress, such as:

• Debt: Debt can come in many forms, notably medical, credit card, and student loan debt. Debt may have many far-reaching consequences, including damage to your credit score and legal action.
• Emergency expenses: Emergency expenses such as medical emergencies and car repair can be very pricey and vital to attend to immediately. This can be extremely difficult to manage, as you likely would not have budgeted for these expenses. They can also have more far-reaching consequences if you are unable to pay, such as the need for high-interest loans, or acceptance of debt.
• Seasonal expenses: Holidays often bring with them additional expenses, such as those related to gifts, travel, and hosting. However, these expenses can be mitigated to some degree by things like holiday pay and holiday credit card offers.
• Poor credit: Poor credit can impact your chances of opportunities for important loans, or even opportunities for housing. These opportunities may be completely unavailable, or may only be available at greater cost and risk (e.g. at a higher interest rate).
• Job loss: Job loss is of course a particularly stressful situation to deal with, although, in many cases, options such as unemployment compensation can mitigate the related struggles to some degree.
• Cost management: It can be very difficult to balance your income and expenses, especially if either is inconsistent.
• Handling limited finances as a parent or guardian: Not only is parenting an expensive endeavor, the possible need to communicate your financial challenges to your children can further compound that stress.

Once you have identified the primary source of your financial stress, you can begin to work on stress management techniques.

Effects of Financial Stress on Your Health

Some possible effects of financial stress on your health and wellbeing include:

• Insomnia;
• Weight gain or loss;
• Depression;
• Anxiety;
• Social withdrawal;
• Use of unhealthy coping methods;
• Headaches;
• Muscle pain;
• Mood swings;
• Lack of motivation;
• Fatigue;
• Difficulty focusing;
• Irritability.

These effects will often be exponentially worse if you already suffer from chronic stress or another mental ailment.

How Financial Stress Can Exacerbate Existing Mental Illness

In addition to causing mental issues, financial stress can also exacerbate existing mental illnesses such as anxiety disorders, mood disorders, and substance use disorders. Fight or flight responses elicited by stress can negatively affect the body and mind over time. In turn, mental illness can worsen financial issues in many ways such as:

• Negatively impacting decision-making skills;
• Reducing job productivity;
• Making it more difficult to secure a job;
• Increasing the likelihood of job loss;
• Increasing the likelihood of the need for medical treatment.

However, people with existing mental conditions are not the only individuals who are disproportionately affected by financial stress.

Who Does Financial Stress Affect Most?

Anyone can suffer from financial stress, but there are some individuals who may be at higher risk of suffering from financial stress, such as:

• Parents: According to the U.S. Department of Agriculture, the projected cost of raising a child born in 2015 was $233,610.
• Young adults: Young adults often deal with unique expenses such as education costs, and often do not yet have the qualifications to acquire jobs that pay well. They may also still be in the process of building good financial habits.
• People with medical conditions: People with serious and/or chronic medical conditions such as diabetes and epilepsy may deal with financial strain relating to medication costs, emergency medical visits, and work opportunity limitations.
• Minorities: According to the U.S. Census Bureau, the median 2017 household income was $40,258 for Black citizens and $50,486 for Hispanic citizens, whereas the median household income for white citizens was $68,145.
• Women: According to the U.S. Census Bureau, women earned 81.6 cents to every dollar men earned in 2018.

How to Deal With Financial Stress

There are a wide variety of ways to handle financial stress, and it is often helpful to pursue more than one at once. Ideally, you should find resources and techniques that can help manage both the financial issues themselves, and the stress surrounding them.

Professional Support

There are many professionals who can help you manage your finances and/or manage the stress associated with them. These professionals include, but are not limited to:

• Therapists: A therapist can help you manage stress of any kind. They are especially helpful if you are also managing a mental disorder.
• Financial advisors: Financial advisors can provide advice on a wide range of financial matters.
• Credit counselors: Credit counselors help people with debt manage, reduce, and repair their debt.
• Accountant: Accountants can help you take stock of and manage your finances, as well as prepare your tax information.
• Insurance agent: An insurance agent can help advise you about how to most effectively use insurance policies.
• Attorney: An attorney can help you manage any monetary disputes, such as court actions related to debt collection.

Unfortunately, the use of such helpful professionals can temporarily worsen your financial situation. Therefore, it is prudent to compare prices and look for financial assistance wherever possible. You should also consider support in your personal circle as an alternative if possible, as it will likely be cheaper.

Support From Friends and Family

Friends and family can be a great resource for emotional and financial support. However, it is important to approach this support carefully, as damage to your personal relationships can compound your existing stress.

Healthy Coping Mechanisms

It is important to cultivate healthy coping mechanisms throughout a period of financial stress, in order to prevent your financial problems from having further negative effects on your life. Healthy coping mechanisms include:

• Maintenance of physical health: Exercise, healthy eating, and sleep hygiene can help promote mental health.
• Maintenance of a healthy routine: A routine creates a healthy outlet for anxiety, and can prevent future stressors.
• Leverage of personal relationships: Talking about your problems with friends and family can be a great outlet for stress, although it is important to avoid co-rumination.
• Consideration of breaks: Breaks or even vacations can be a great way to de-stress. However, it is important to not over-utilize them to a degree that they become a means of avoidance.
• Consideration for professional care: In some cases, it may be helpful to seek out help from a therapist who can help you further cultivate healthy coping mechanisms that are personalized for your needs.

Furthermore, one of the best ways to cope with financial stress in a healthy way is to start taking steps to get your finances in order.

Finance Management Techniques

Some financial management options that can help you get through a period of financial stress (and even prevent financial stress) include:

• Budgeting: Budget for both the short- and long-term. When creating a budget, take into account all income and expenses. It may also be helpful to consult a professional or a budgeting app.
• Credit score maintenance: Keep track of your credit score, carefully manage your debt, and seek out low-risk opportunities to build your credit.
• Planning for long-term income opportunities: A great way to improve your financial situation is to increase your income. Therefore, it is beneficial to build your credentials and seek out opportunities for the future.
• Creating safety nets: Build savings and emergency funds for long-term financial security.
• Carefully investing: Investment can be a means of building your assets, but it can also be detrimental if approached inappropriately. Carefully research investment opportunities, and seek out low-risk investment opportunities when possible.
• Carefully using loans: Loans can be a helpful way to gain assets and manage payments. However, this must be approached carefully to avoid further debt.

While financial management techniques can prevent or fix financial situations that cause stress, they are not always helpful to your mental wellbeing when you find yourself actively dealing with financial stress. In that scenario, general stress relief techniques may be useful.

How to Deal With General Stress

In many ways, financial stress can be handled just like any other type of stress. Tips for managing stress include:

• Practice relaxation techniques such as meditation.
• Maintain your physical health through exercise, healthy eating, and sleep hygiene.
• Maintain a regular routine.
• Set short- and long-term goals.
• Maintain bonds with close friends and family.
• Consider cognitive behavioral therapy.
• Develop hobbies.

Additional Resources

Resources that may be useful for dealing with financial stress include:

• Mental Health and Addiction Recovery: This page provides information about how to access and pay for mental health and addiction recovery resources.
• Poverty: This is a comprehensive list of resources for people living in poverty.
• Medical Debt: This is a comprehensive list of resources for people dealing with medical debt.
• Unemployment: This is a comprehensive list of resources for people in various unemployment scenarios.
• Student Finances: This is a compilation of tips and resources for students planning their education funding, as well as people dealing with student loan debt.