September 25, 2020

Financial Stress and Your Mental Health

by Petra Brunnbauer
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Where does financial stress come from?

Financial stress starts early

For my generation, plastic is definitely the new paper. Checkbooks have been replaced by debit cards and e-transfers. And cash is making way to credit cards. It’s easy to spend money. I just tap my card and it’s done. I don’t even need to go to the bank and really think about my purchase before I withdraw the cash. Everything is available 24/7 with online shopping and all I have to do is sit at home on my couch.

In addition to purchasing becoming so easy, our daily costs seem to have increased as well. I remember my parents building a duplex near Munich for less than it costs to buy a one bedroom apartment in Spokane. And that’s not even talking about skyrocketing childcare costs or student loans. Basically before we even leave high school, the debt starts racking up.

I lived quite far out of town, for example, so I needed to buy a car when I was sixteen. Talk about financial stress starting early!

And then there is the reality of living in my parents’ basement until I was 35. That one is hard to admit.

“Success is the sum of small efforts, repeated day in and day out.”
                                             - Robert Collier

But there just wasn’t enough money to buy a house in the area we lived in. And with the vacancy rate at less than 1%, renting was not an option either. I mean, don’t get me wrong. The basement was like a comfy hotel with all the bells, whistles, and fantastic laundry facilities. But the fact that my parents had already bought and paid for their second house at my age really made me question my situation.

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Financial stress, depression, and anxiety

Let’s start with this. Do you think it is surprising that financial stress is the number one stressor for Americans? When I consider how much time I spend worrying about money, it’s not surprising at all. Almost half of Americans say they have not been putting anything away for their retirement. This is not because they don’t want to. It’s because even with two full-time incomes, the money just does not stretch to include any savings. It’s really scary and it adds a lot of stress to our daily lives.

Many people live under the constant threat that they would not be able to pay their bills if even just one paycheck was late. That kind of pressure and frustration can have a negative impact on your life, your health, and your mental health as well. It can be hard to try and juggle different priorities and decide which ones should be paid first. It can be hard to decide what you can and can’t afford.

Worrying about financial stress

Financial stress grinds away at you

Decisions like these can have a big impact on your quality of life. Whether you lost your job unexpectedly or had a big expense come up, debt can build fast. With high interest rates and eager lenders to let you borrow more, many of us are in over our heads before we really understand the impact. Many people report feeling like their debt is crushing them. It causes them an unimaginable amount of pain, shame, and anger. Debt can be a constant burden, something that never leaves your mind.

So, over time, this feeling of worry and uncertainty can turn into chronic anxiety and depression. Since financial stress usually lasts for years, not just minutes or hours, it can absolutely affect our mental health long term. From what I have personally experienced, financial stress seems to build the older we get. At first, we start with a student loan. Then we add a car loan. Later, a mortgage and maybe go into debt for a wedding. And then the insane costs of childcare, if we decide to start a family. Instead of easing out of debt, it seems that as time goes on, financial stress only increases.

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Impacts of financial stress

Financial stress can be the feeling that at any minute you may lose everything you’ve worked for, whether it be your car or even the family home. This kind of pressure will start to impact many areas of your life. Although it might start out as passing thought when you are in your twenties, it might start impacting all areas of your life very quickly.

Budgets and financial stress


Many people under financial stress report having problems sleeping. Some feel overwhelmed with anxiety when they try to lay down to sleep. Others report waking in the middle of the night and not being able to get back to sleep. Sometimes the burden can even translate into nightmares that haunt you. Over time, this kind of sleep disruption can leave you even more exhausted, on edge, and anxious. Getting enough rest is a vital coping mechanism to be able to handle stress in a healthy way.

Poor diet

People who are facing a lot of financial stress often have to prioritize where to spend their money so they can make it through another month. Often buying nutritious food is not on the top of those priorities. Even if the intention is there, fresh healthful food is often more expensive than the nutrient deficient options. Keeping full so you can keep functioning becomes a bigger priority than getting enough nutrients.

Poor diet and financial stress

Too much work

Many people that are faced with large amounts of debt or financial stress take on more work to make ends meet. Working too many hours in a week can have severe consequences on your life in the long term. Working too much can mean that you’re giving up sleep and rest time in order to make more money. You might even be forced to work day and nighttime hours which can disrupt your sleep patterns. Not having enough time to eat, sleep and rest will eventually translate into exhaustion and burnout. Doing what is necessary can be hard when it means sacrificing your wellbeing.

Neglecting self-care

Many people under financial stress end up neglecting self-care because they don’t have the time and money to dedicate to it. Perhaps you’re working so much that you’re too exhausted for healthy exercise. Maybe you just can’t afford those small indulgences like a coffee on the go, or an afternoon at the museum. All the small things that used to give you joy and relief seem like they are out of reach.

Forgetting self-care over financial stress

And it can be hard to make all the sacrifices you need in order to meet your financial obligations. Neglecting your self-care can have deep consequences over time. Even the little things we do can have an impact on our mental health. A common sign that you might be neglecting your self-care is constant headaches, frequent exhaustion, and frequent sickness.

Strain personal relationships

Not only does financial stress impact you and your health, but it can also have an impact on your relationships. Maybe you can’t afford to join your friends on evenings out or get-aways. Maybe you’ve had to borrow money from someone and you haven’t been able to pay them back. Your full work schedule could mean sacrificing time away from your spouse or children. Maybe the constant stress has left you exhausted and you find yourself emotionally distant and often angry with your partner. There are many ways in which money can impact your relationships. And when we are in the middle of stress, we tend to notice it the least.

Unhealthy living choices to cope with financial stress

We tend to isolate ourselves when we are depressed, which can often lead to prolonging and worsening depression. We just don’t feel like talking to A scary side-effect of financial stress is the way we try to cope. And that very often includes alcohol or drugs to make ourselves feel better. Whereas you may have been a social drinker before your financial worries, this can very quickly turn into alcohol as a coping mechanism. Often, a glass of wine and some prescription anti-anxiety medication become the preferred way to unwind. It goes without saying that these unhealthy living choices can have a detrimental effect on your physical and mental health.

Alcohol to cope with financial stress

Financial stress can impact your work

Ironically, all the hard work you might be doing to catch up with your finances might be negatively impacting your performance at work. The more you work, the more you neglect your health, your sleep, your family and your relationships. When these effects catch up to you, you may feel even more stressed, overwhelmed and frustrated. Not getting enough rest, sleep and nutritious food can cause you to lose focus at work. This can negatively impact your performance or even put your job(s) at risk. Losing your job would cause you even more stress, and this can become a vicious cycle.

Financial stress impacts work

Worrying about retirement

Many Americans report not being ready for retirement. This includes the Boomer generation as well. I know a lot of people in their fifties, who have not yet put anything away for retirement. And the stress that goes with it is unimaginable. The constant fear that they will end up under a bridge when they retire impacts each and every day. And nearly all people I know who are retired, simply do not have rough money each month. They have to pick and choose very carefully what they spend on each month because their pension is not enough to live on.

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How to start addressing financial stress

Having the constant burden of financial stress can be extremely taxing on your body and health. The constant worry and stress can translate into other health issues like high blood pressure, heart disease… and yes, depression and anxiety. The more stress you carry, the harder it will be to keep your mental health balanced and your body healthy. If things don’t improve, the situation can seem hopeless and terrifying. This in turn can trigger depression and generalized anxiety over time.

So knowing these impacts on our mental and physical health, what can we do to try and cope with financial stress?

Face your reality

Many of us start to ignore our finances when we know things are not going well. The stress of the reality of it is so overwhelming that we actually try and hide from it. We continue to use credit when we know we shouldn’t. And we keep buying things we can’t afford to make ourselves feel better. Yet the mountain of debt will keep growing, whether you are ready to face it or not. The most important thing you can do if you are consumed by financial stress is to face the reality of your situation and seek help to address it. Throwing a bit of money at it without facing the full reality will only make things worse.

Facing the reality about financial stress

Becoming aware that you have a problem is the first step. Then, finding someone who can help you with it comes next. This also includes addressing any substance abuse issues you might be dealing with. Admitting you have a problem with alcohol or drugs is extremely difficult. You may also feel like your family will judge you and you simply cannot face the shame and the guilt. But, the healing will not begin until you face up to your fears and get help. You are not alone in your struggles. And you will be in a much better position to tackle your finances, when you are sober.

Make a plan

The first thing that will help is looking at your finances and making a plan. This can include making a list of all the money that comes in throughout the month and every single thing you pay out. You can then look through the transactions and understand how you might be spending more than you are earning. Simple changes like giving up that Starbucks coffee and watching a movie at home instead of at the theatre can already save money.

Once you know how much money you have available each month, you can set a monthly budget. There are budget tracker apps available for your phone. Or you can keep a spreadsheet on your computer. The important thing is that you talk to your family about this because it will take everyone sticking to the budget for you to succeed. Every purchase needs to be talked about and if there is no vital need for it (like groceries), then it should be shelved for a later date. Impulse buying can be detrimental to your spending plan, so make sure you nip that one in the bud.

When you first start to address your financial situation, the outlook can be too scary to deal with. So, understand that your financial worries will not be solved overnight. But, with a proper plan and a budget, you can start to work on it. Try to choose small things to change every month, or you will get too overwhelmed. If you try and fix the entire situation in one sitting, you may not even get off the ground with your plan. The trick is small, consistent steps every month.

Talk to a professional

There are many professionals who can help you understand your finances and make a plan. Maybe you even have a friend who is educated in the field and can help you come up with a solution. The answer might not be what you want to hear. It might mean making some sacrifices, but the opportunity to alleviate your financial stress is a worthwhile cause. Understanding your finances instead of running away from them will give you a sense of control. If you manage to pay down your debt it will also give you a sense of accomplishment and pride. These are all things that will help you deal with your stress and lower the chances of it ending in depression or long term anxiety.

Talk to an advisor to help with financial stress

Because financial stress is such a prevalent stressor nowadays, there are specially trained financial counselors and advisors available. A financial advisor can sit down with you, look at your financial situation, and advise you on the best way to proceed. At the same time, a financial therapist can help you deal with the feelings you are working through. As you address your financial situation, your emotional situation will improve. The more you feel like you take back control, the better you will feel. And the good news is that a lot of financial advisors come free of charge from your bank or a community outreach program.

Take care of yourself

Since self-care slips when we are experiencing stress, it is extremely important that you care for yourself. This will help you alleviate some of the stress you are feeling. It will also put you in a better physical and mental space to make decisions and deal with your situation. This can include making sure you eat a healthy diet, hydrate properly, and get enough sleep. It should also include some form of exercise that gets you moving a few times per week. And you should consider adding relaxation techniques to your routine, like meditation or yoga.

Self care for financial stress

When you stop taking care of yourself, your mental health takes a hit. And this in turn makes it harder to manage your situation. So, although you might not feel up to it, caring for yourself is a vital step in getting better and getting a handle on your financial situation. And your self-care routines don’t have to cost extra money. If you swap cooking at home for eating out, you should actually save you money. Exercises like going for a walk are free. And you can have a look online for free meditations.

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The Takeaway

Experiencing financial stress is scary, but sadly, it is a daily reality for most people. From an early age, the pressure of managing our finances builds up. Oftentimes we end up getting swallowed by it without knowing how to get back out. The effects of debt and financial stress on mental health is clear. And especially when financial stress lasts for weeks, months, and years, you can be left struggling with anxiety and depression.

Support with financial stress

Dealing with mental health issues on top of financial stress is a vicious cycle. The most important thing is to start talking to someone. You can talk to your family and friends, if you feel this helps. Or you can connect with a mental health professional and a financial advisor to get help with your situation. Please remember that financial stress is part of nearly everyone’s life and you are not alone.

Asking for help is a brave step, not something to be ashamed of.

Especially during times of high stress, make time to care for yourself. This is vital to stay mentally and physically healthy. Self-care is not selfish. Self-care is essential to making it through times of financial stress. It includes anything that supports your health, including diet, sleep, exercise, hobbies, and social connections. Putting yourself first means you are making solid choices for your own health.

And above all, take this one step at a time. It is so easy to become completely overwhelmed by your financial situation. This will literally leave you frozen in fear. Take small, consistent steps toward a solution. You are not expected to fix this problem today. One step at a time will get you there.

It takes courage and strength to face what is happening and I know you can do it!



anxiety, debt, depression, depression symptoms, financial stress, financial worries, money stress, the jorni

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