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10 Tips to Manage Financial Stress

January 11, 2023

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Money has been consistently cited as one of the leading causes of stress among Americans. Right now, in particular, concerns over high inflation and geopolitical tensions have many Americans stressed about money more than ever before. Indeed, in a survey by the American Psychological Association (APA), 65% of American adults noted money as a significant source of stress in their lives.

Left unchecked, stress from financial worries and anxiety can damage your health, mood, relationships, and your quality of life in general. Fortunately, there are things you can do to manage this stress and prevent it from taking over your life. 

How to Manage Financial Stress

Here are 10 practical ways to cope with financial stress and protect your mental health.

1. Identify Your Primary Stressor

Identifying your primary financial stressor or trigger is one of the key steps to managing financial stress. What is that one big thing that you’re most concerned about? Maybe you’re worried about losing your job and not having enough savings to cover yourself until you find another one. Or perhaps you’re carrying a large amount of credit card debt and are worried about how you’ll pay it off.

Once you’ve identified your primary stressor or trigger, you can begin developing a plan to deal with it. If your main concern is a lack of sufficient savings to cover you in case of an unexpected event such as job loss, you can put together a plan to build an emergency fund. If credit card debt is your main concern, you could start looking into debt repayment options and solutions such as the Happy Money Payoff Loan.

2. Limit Your News Consumption

In times of economic uncertainty, it’s common for the news to be filled with gloomy reports and dire predictions about the economy, cost of living, stock markets, and so on. Sadly, constant exposure to negative headlines will only increase your stress levels. To keep financial stress under control, limit your news consumption to a few reputable sources — specifically, sources that don’t rely on sensational headlines to boost their ratings. 

Also, when watching the news, focus on the facts. Recognize that headlines are just a fragment of the bigger picture and that any negative economic forecasts are just that: forecasts. If the news becomes too much to bear, don't be afraid to shut off the TV or radio.

3. Create a Financial Plan and Stick to It

Creating and sticking to a financial plan can help you feel in control of your finances and reduce financial stress. The kind of plan you put in place will, of course, vary depending on your goals and priorities.

Your plan, for example, might involve tracking your income and expenses for a while and then creating a monthly budget to help make sure that you’re not spending more than you are making. Alternatively, your plan could involve opening a savings account and setting up automatic transfers from your paycheck to build up an emergency fund. Or, it could involve learning more about, and then implementing a debt repayment strategy, such as the debt snowball method, to pay off your creditors. 

4. Focus on What You Can Control 

If you're feeling stressed about your finances, another tactic to help you cope is focusing on things you can control. For example, you might not be able to control the stock market or the interest rates, but you can control how much money you spend each month and how much debt you take up going forward. Focusing on things you can control can help you feel less hopeless and lead to less financial stress.

5. Find Worthwhile Distractions

Constantly obsessing or thinking about your money problems will only make things worse. Look for worthwhile distractions to divert your attention away from your worries, even if it's just for a few hours.

When you notice negative money thoughts creeping in, take a break and do something else for a while. Bring out your favorite board game and invite a friend to join you. Play a game of hide and seek with your toddler. Or if you prefer, dust off your running shoes and go for a run—anything that will help take your mind off your financial woes.

6. Avoid Comparing Yourself to Others

It’s natural to compare ourselves to others when it comes to financial status. But as the adage goes, comparison is the thief of joy. Indeed, if you're constantly comparing yourself financially to your peers and falling short, it will only lead to frustration. So, rather than comparing yourself with others whose journeys and circumstances might be vastly different from yours, focus on your own journey and set goals that reflect your unique circumstances.

7. Find Ways to Earn More Money

Increasing your income can help ease some of the financial pressures you're currently facing and help reduce stress levels. If you have a few hours each week to spare, you could pursue a meaningful side hustle that could put a few extra dollars in your pocket every day. 

Nowadays, there are numerous side hustle options to choose from. The key is to find something that you’re passionate about. You’ll be more motivated to work on your side hustle if it’s something you actually enjoy doing, rather than something you see as a chore.

A few top side hustle options worth considering include:

  • Freelance writing
  • Virtual-assisting
  • Driving for a ride-sharing company
  • Babysitting or pet sitting
  • Selling handmade crafts online

8. Remind Yourself of What is Good in Your Life

When dealing with financial stress, it can be helpful to remind yourself of other things that are going well in your life. It could be good health, a great family, or even a supportive group of friends. Whatever it is, take a moment to focus on the positive aspects of your life. This doesn't mean that your financial stressors will magically disappear, but it can help you to put them into perspective and hopefully lessen their hold on you.

9. Celebrate Small Wins

Understandably, overcoming your worries and getting to where you want to get financially might take time. Any step you make, however, that moves you closer to your goal or any little progress is worth celebrating. Whether it’s paying off a small chunk of your credit card debt or accumulating even just one month's worth of living expenses in your emergency fund, give yourself a pat on the back—you deserve it! After all, it’s the small victories that compound over time and eventually lead to big successes.

10. Seek Professional Help

If financial worries become unbearable, consider seeking professional help from a financial therapist or counselor. As established in our 3-part interview series with Certified Financial Therapist, Ed Coambs*, money and emotions are deeply interconnected. More specifically, most money issues are rooted in our emotions.  Financial therapists can work with you to change your ways of thinking, feeling, and using money. They can help you identify and address any limiting beliefs you have about money that might be holding you back or preventing you from achieving your financial goals. A financial therapist can also work with you to create a plan to improve your financial situation and provide you with emotional support and guidance as you work to get there.

Regain Control and Reduce Your Stress

If you're feeling overwhelmed by financial stress, remember that you're not alone. Money worries are common, but there are things you can do to ease the burden. Use the tips we’ve discussed here to stay in control as you work towards obtaining financial security. 

Check out our article “What is Financial Stress?” to learn more about financial stress and how it can impact your life. And for simple, practical financial mindfulness tips and exercises to empower and help you cope with money stresses and worries, be sure to sign up for our Peace Program

*Please note: Ed Coambs is completely independent/unaffiliated with Happy Money, and this article/his opinions are informational only and not a solicitation for any person or service.