Financial Stress: Coping Strategies And Mental Health Considerations

Stress associated with finances and spending is widespread. The American Psychological Association's Stress in America report for 2022 reveals that most adults (66%) felt money stress, particularly around affording basic needs such as groceries, housing costs, and health insurance. 

While money-related stress is an everyday occurrence for many, it can sometimes become overwhelming enough to interfere with our daily lives. We may feel less motivated to participate in social activities or lose interest in things we once found pleasurable. When left unaddressed, financial stress can also take a toll on our physical health and potentially lead to more serious mental health issues.

But there are steps one can take to manage financial stress, such as prioritizing expenses, seeking debt management support, and, if needed, working with a therapist. In this post, we'll explore some of these strategies, as well as some other self-care strategies and stress management tips.

What is financial stress?

Financial stress can occur when you feel persistent uncertainty about how you will meet all of your financial obligations. You might be experiencing financial stress if financial challenges are causing you ongoing distress or otherwise negatively affecting your daily life. Other common signs of financial stress may include:

• Frequent feelings of fear or uncertainty about your financial situation 
• Difficulty keeping up with your bills
• A sense of shame or guilt around money
• Reliance on credit cards or loans to cover your basic expenses
• Changes in sleeping or eating habits
• Withdrawal from social situations due to money problems
• Physical symptoms like frequent muscle tension, nausea, headaches, or unexplained aches and pains

Common sources of financial stress

Financial stress can be caused by a variety of factors, such as:

• Job loss
• High-interest debt
• Medical bills
• Economic downturns
• Rises in living expenses

How financial stress affects mental and physical health

Ongoing stress, including stress related to finances, can have a range of negative side effects. In this section, we’ll explore some of these effects in more detail. 

Emotional effects of money stress

The mental and emotional effects of financial stress can be taxing. Constantly worrying about money can make it difficult to socialize, feel good about yourself, and prioritize your health and wellness. Money-related stress and the associated feelings of shame may also negatively affect self-esteem and self-worth. Other mental health concerns that may accompany financial stress include anxiety, depression, and substance use disorders. 

Physical symptoms that may be linked to chronic financial stress

If financial challenges are persistent or ongoing, they may also contribute to a state of chronic stress. The potential physical impacts of chronic stress are well-documented and may include:

• Digestive issues
• High blood pressure
• Stroke
• Weight gain
• Reduced immunity
• An increased risk of conditions like coronary disease

These effects may be compounded by practical financial concerns. For example, a person might hesitate to see a doctor for physical symptoms they’re experiencing due to cost, causing them to delay treatment, or struggle to find affordable, healthy ways of managing their stress. 

Coping with financial stress

Handling financial difficulty may require a combination of proactive steps and adaptability. While it may take some work and a change in spending habits, navigating the challenges and laying the groundwork for a more stable financial future is possible. Below are some tips that may help you start to make progress toward financial recovery. 

Assess your situation honestly

An excellent first step in handling financial difficulty is to take stock of your income, debts, and other expenses. Create a detailed monthly budget to grasp where your money goes and identify areas where you can cut back. This can provide a clear picture of your financial issues and where adjustments can be made to help you regain control.

Prioritize your expenses one at a time

Trying to tackle all your debts at once can be overwhelming and unmanageable. Instead, focus on covering essential expenses like housing, utilities, and food first. Trim discretionary spending on non-essentials temporarily to free up resources for crucial bills. 

Reach out to negotiate your expenses

You might consider contacting debtors to explain your financial situation honestly and explore options to alleviate the immediate financial pressure. You might negotiate for lower interest rates, extended deadlines, or reduced minimum payments on loans or credit cards. Many institutions offer hardship programs or modified repayment plans. You might also negotiate with your utilities, phone, and internet service providers for payment plans or discounts that reduce immediate financial strain.

Seek additional income streams

If possible, consider exploring supplementary sources of income. This doesn’t necessarily have to mean getting a full second job; you might explore freelance work, part-time jobs, or monetizing a skill or hobby. Online platforms offer various opportunities for freelancing, tutoring, or selling handmade goods, providing possible avenues to bring in more money.

Planning for unexpected costs

While it may seem challenging right now, aim to save money for an emergency fund as soon as possible. Consider opening a high-yield savings account and setting aside as much money as you can spare each week. Even small, regular contributions can accumulate over time and serve as a safety net to cover unexpected expenses in the future. Building an emergency fund can help you avoid relying on credit or loans during emergencies.

Consider debt management strategies for stressful times

If dealing with substantial debt, you might also research debt management options. Consolidation loans, balance transfers, or debt settlement programs might be viable solutions to ease the debt burden, depending on your unique circumstances. Some nonprofit organizations, financial advisors, and credit counselors may offer free counseling and professional financial advice to those in need, so consider checking for low-cost options in your area. 

Explore resources for financial distress

If the situation is particularly urgent, you can also investigate available government assistance programs or community resources designed to support individuals facing financial hardships. These may include unemployment benefits, food assistance programs, housing aid, or charitable organizations providing financial relief.

Set short- and long-term financial goals

In times of financial stress, the top priority is often to pay off debt, cover basic expenses, and build an emergency fund. However, once you’ve achieved a level of stability, setting and achieving other short- and long-term financial goals may help you regain a sense of control. It can be helpful to reflect on your goals — such as saving for retirement or buying a house — and taking small steps over time, like investing a little money from each paycheck in an investment account. These small steps can help you make progress toward your goals and achieve a sense of financial resilience. 

Educate yourself and adapt

Financial literacy is a powerful tool. Educate yourself about financial health issues like personal finance, budgeting, and prudent money management. Adapt to changing circumstances by continuously learning and implementing intelligent financial practices that can help prevent difficulties in the future.

The role of emotional support in financial stress coping

Money challenges can be isolating, but having a support system may make them easier to manage. Trusted friends, family members, and peers may be able to help you feel less alone, share their own experiences, and provide a source of emotional support during particularly stressful moments. Consider reaching out to a friend or loved one if you’re struggling. Alternatively, you might also consider attending a support group, whether in-person or online, to connect with others in similar situations and share your experiences. 

Alleviating distress caused by money

Any type of stress can take a toll on our mental and physical health, but money worries often come with a unique set of challenges. 

For example, we may have emotional difficulties associated with gift-giving obligations during the holidays or on birthdays, or pressure around continuous calls from debt collectors. If we're caring for a sick or injured loved one, medical debt can drain not only our bank account but our mental and emotional state, as well. Practicing self-care techniques, such as setting financial boundaries or taking time for mindfulness, can help alleviate some of this stress.

Strategies for managing stressful financial challenges

A self-care plan is crucial to managing the stress associated with financial issues such as these. Below are some examples of stress-reduction strategies that might help:

• Practice mindfulness techniques or meditation to reduce anxiety and calm the mind. Visualization techniques, where you imagine yourself in a peaceful and calming environment, can also be effective. 
• Engage in deep breathing exercises, like diaphragmatic or box breathing, to activate the body's relaxation response and lessen physical symptoms of stress. 
• Stay physically active to reduce stress hormones and release endorphins that improve mood. A comprehensive body of research indicates that exercise can also help improve concentration and sleep (two common symptoms of stress) and enhance cognitive functioning. 
• Eat a balanced diet rich in nutrients to support your body in managing stress. Avoid excessive caffeine, sugar, and processed foods. Aim for a diet high in fiber and omega-3 fatty acids. Cultured and fermented foods like natural yogurt, kefir, miso, and kimchi may also be beneficial. 
• Prioritize good sleep hygiene. Aim for seven to nine hours of quality sleep per night to help your body recover, reduce stress, and promote resiliency against anxiety and depression. 
• Adopt time management strategies to reduce feeling overwhelmed, such as setting realistic goals and organizing and prioritizing tasks to accomplish them. You may also set healthy boundaries by learning to say no when needed to avoid overcommitting yourself.  
• Take breaks from screens, such as phones, computers, and TVs. A growing body of research on the effects of excessive screen time and media exposure shows that it can cultivate poor mental health in various ways besides significantly contributing to stress. Too much screen time may worsen symptoms of anxiety, depression, and comorbid conditions like ADHD and substance use disorders. One study indicated that young people indulging in excessive screen time experienced "non-adaptive or negative thought patterns, a lower sense of fulfillment in life, and a propensity for health concerns throughout maturity."
• Make time to engage in activities that bring you joy and relaxation, such as reading, listening to music, gardening, or hobbies. 

When professional help can make a difference

While the above strategies can be a helpful starting point, they may not always be enough on their own. Sometimes, uncontrollable stress can be a sign of a deeper mental health concern, like an anxiety disorder, depression, or post-traumatic stress disorder (PTSD). For this reason, if you’re going through a financially challenging period, you may want to talk to a mental health professional if you: 

• Experience symptoms of depression, anxiety, or other mental health concerns
• Find yourself withdrawing from social situations
• Avoid paying your bills, setting budgets, or managing other financial tasks due to stress
• Notice persistent physical symptoms related to money stress
• Feel constantly overwhelmed
• Experience any other symptoms that are interfering with your daily life

How online therapy can help

Many providers on BetterHelp now accept major insurance carriers. In many states, certain therapists on BetterHelp may be in-network with certain insurance plans. Coverage depends on your plan, provider, and availability. 

When sessions are covered, members typically pay an average copay of about $19 per session. Check your in-network status on the BetterHelp site. Coverage varies by state and provider availability.

Mental health care with online therapy: Benefits and techniques

A therapist can assess your symptoms and, if applicable, diagnose any underlying mental health conditions you might have. If you have an underlying condition, your therapist may use treatment techniques like cognitive behavioral therapy (CBT) to help you:

• Uncover the thoughts associated with mental dysfunction
• Reframe negative thoughts in a more realistic, productive way
• Manage difficult emotions that arise from negative thoughts
• Change problematic behaviors associated with your thoughts
• Develop coping skills to manage mental health challenges

Online platforms like BetterHelp offer individuals the option to speak with a licensed mental health practitioner from the comfort of home, typically for less than what traditional face-to-face therapy costs. BetterHelp is in-network with a growing number of insurance providers, and qualifying users may also be eligible for need-based financial aid. Therapy sessions are available via video call, voice call, and in-app messaging at a time that suits your schedule. This may make online therapy a more convenient alternative to commuting to in-person therapy.

Effectiveness of online therapy for stress-related mental health concerns

Research shows that online therapy using methods like CBT is as effective as in-office treatment for mental health problems associated with stress, such as anxiety and depression, as well as a large variety of other conditions, including PTSD, panic disorders, phobias, bipolar disorder, and substance use disorders. If you're having a hard time coping with financial stress on your own, reach out to a BetterHelp professional to gain control and move forward with better mental health and well-being.