Financial Stress Affects Mental Health: Here’s How to Cope

Financial Stress Affects Mental Health: Here's How to Cope

Money is one of the leading sources of stress in people’s lives. According to a study, 73% of human beings report feeling stressed about money at least some of the time. This number is not surprising, given that many people are struggling to make ends meet in today’s economy. Financial stress can take a toll on your mental health, leaving you feeling anxious and overwhelmed. In this blog post, we will discuss how to cope with financial stress and protect your mental health.

How Does Financial Stress Affect Mental Health?

How Does Financial Stress Affect Mental Health?There is a strong relationship between financial stress and mental health. It directly impacts our ability to think clearly, make decisions, and cope with difficult situations. Financial stress is defined as “the degree to which an individual perceives that financial demands exceed the resources available to meet those demands.”

Let’s understand with an example, that you are juggling between paying your rent. Buying groceries, and repaying your student loan. You have very little money left after meeting these expenses. This will eventually lead to financial stress.

There are a few ways that financial stress can manifest itself in our lives:

  • Anxiety and fear: We may feel anxious about our ability to make ends meet or pay our bills. This can lead to feelings of fear, especially if we’re unsure where our next paycheck will come from.
  • Depression: Financial stress can cause us to feel down, hopeless, and helpless. We may lose interest in activities we used to enjoy and start to withdraw from friends and family.
  • Anger: We may find ourselves feeling angry more often than usual. This can be directed at ourselves, our loved ones, or even perfect strangers.

These are just a few examples of how financial stress can affect our mental health. If you’re struggling to cope with financial stress, you must not avoid it, instead, face it.

How To Cope With Financial Stress?

When you identify the root cause of your financial stress, you can start to look for solutions. Maybe you need to find a better-paying job or make some lifestyle changes. Whatever the case may be, once you have a plan, it will be easier to cope with the stress.

There are also some things you can do on a day-to-day basis to help relieve financial stress. Below are some of the ways to cope with financial stress:

Talk To Someone Who Can Help

It is the foremost thing you should do when you feel like you are struggling to cope with your finances. Talk to a financial advisor or counselor who can help get your finances in order. Talking with someone who is unbiased and can offer helpful advice can be very beneficial. Moreover, it can help to talk with someone who is going through a similar situation.

More often than not, people tend to keep their financial problems to themselves. This can lead to feeling isolated and stressed. So, talking to someone about your finances can help you feel better and may provide some relief.

Create A Budget

Create A BudgetOne of the best ways to get a handle on your finances is to create a budget. In the beginning, it is essential to be as detailed as possible. Track every penny you spend for a month so that you have an accurate idea of where your money is going. After that, you can start to cut back on unnecessary expenses. This is important in the first place as it will help you save money.

Budgeting is considered the key to financial success. It gives you a clear picture of your income and expenses. This will help you find out where you can cut back and save money. There are ways such as; the 50/30/20 rule, where you spend 50% of your income on necessities, 30% on wants, and 20% on savings or debt repayment. Hence, pay attention to your budget and make changes accordingly.

Build An Emergency Fund

An emergency fund is crucial because it gives you a cushion to fall back on when unexpected expenses arise. Try to save at least three to six months of living expenses in case of tough times. This will help reduce financial stress in the long run. An emergency fund will act as a buffer and will help you tide over difficult times.

In simple words, an emergency fund is a savings account where you put money that you may need in an unpredictable situation. This could be job loss, medical emergencies, or any other unforeseen event.

Start Investing

Investing is another great way to reduce financial stress. When you invest, there is always the potential to make more money than you would by keeping it in a savings account. However, it is important to remember that investing involves risk so do not invest more than you can afford to lose.

Investment, these days, has become easier with the presence of online investment platforms. You can start with a small amount and gradually increase it as you get comfortable. However, it is also important to remember that you should only invest money that you can afford to lose. Because investment comes with its own risks.

Get Organized

Getting organized is the most important thing you can do to reduce financial stress. When your finances are in order, it will be much easier to stay on track and make sound decisions. This includes creating a budget, tracking your spending, and setting up a system to pay bills on time.

Getting organized will help you take control of your finances and reduce stress in the long run. It is basically defined as putting all the pieces of your financial puzzle together so that you can see the big picture. There are various ways to be organized in managing your expenses, such as;

  • Making a budget and sticking to it.
  • Tracking your spending.
  • Paying bills on time.
  • Creating a system that works for you

All of these will help you take control of your finances, which in turn, will help reduce stress. Financial stress can be overwhelming but by taking small steps, you can make a big difference.

Review Your Finances Each Week

Review Your Finances Each WeekReviewing your pockets every week helps us to be more mindful of our spending and saving habits. It will also help us to catch any red flags early on. Set aside sometime each week, even if it is just for 30 minutes, to review your finances. This will help you stay on top of your finances and reduce financial stress in the long run. Otherwise, financial stress can take your mental health for a toss!

This, actually, is a great way to ensure that you are on top of your finances and to catch any red flags early on. For example, if you see that you are spending more than you are earning, it is time to take a step back and reassess your situation.

Make Time For Yourself

It is important to make time for yourself amidst all the stress. This can be in the form of relaxation techniques such as yoga, meditation, or aromatherapy. Taking some time out for yourself will help you relax and de-stress. Moreover, it will also help you refocus on your goals and stay motivated.

Studies have shown that financial stress can have a negative impact on our mental health. It is important to take steps to reduce this stress. You have to be proactive and take charge of your finances. Remember, you are not alone in this journey. There are plenty of resources available to help you. Do not hesitate to seek professional help if needed.

Get Help With Debt

Debts are one of the major causes of financial stress. If you are struggling to cope with your debts, seek help from a credit counseling service. They will work with you to come up with a repayment plan that is affordable and sustainable. This will help reduce your financial stress in the long run.

In simple words, debt is when you owe someone money. This could be in the form of a credit card bill, a personal loan, or even your mortgage. Getting help with debt is simply means finding a way to repay what you owe. Such ways to get help with debt are;

  • Credit counseling services.
  • Debt consolidation loans.
  • Balance transfer credit cards.

All of these options will help you reduce your financial stress in the long run. Choose the one that best suits your situation and needs.

Manage Your Overall Stress

Manage Your Overall StressFinancial stress can take a toll on your mental and physical health. It is important to manage your overall stress so that you can cope with financial stress in a better way. This includes;

  • getting enough sleep,
  • exercising,
  • eating a healthy diet.

Furthermore, it is also important to find ways to relax and de-stress. Taking some time out for yourself will help you stay focused and motivated. However, these ways are just a coping mechanism and not a solution to your financial stress. The only way to get rid of financial stress is to take control of your finances.


To conclude, financial stress can have a significant impact on mental health. If you are struggling to cope, it is important to seek professional help. There are also many helpful online resources available. With the right support, you can manage your financial stress and improve your mental wellbeing.

It is important to understand that you are not alone in this. Many people experience financial stress at some point in their lives. With the right support, you can overcome this challenge and improve your mental health. If you find this article helpful, please share it with others who may be going through a tough time. Thank you for reading.

A Word From Therapy Mantra

Your mental health — Your psychological, emotional, and social well-being — has an impact on every aspect of your life. Positive mental health essentially allows you to effectively deal with life’s everyday challenges.

At TherapyMantra, we have a team of therapists who provide affordable online therapy to assist you with issues such as depression, anxiety, stress, workplace Issues, addiction, relationship, OCD, LGBTQ, and PTSD. You can book a free therapy or download our free Android or iOS app.