How to beat financial stress by controlling your finances
Follow a strong financial plan to take control of fruitless worries.
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While money may not guarantee happiness, it’s often true that financial stress can lead to feelings of unhappiness. We understand how overwhelming this can be, and we want to offer our support. It’s important to take steps to manage your financial health and reduce anxiety, but we also recognize that shifting your mindset to one of gratitude and contentment is equally crucial. We’re here to help you achieve both of these goals and improve your overall well-being.
The best way to get ahead of money stress is by adjusting your mindset and planning ahead. Our best tips for dealing with money stress include:
1. Create a budget
Think of a budget as liberating instead of restrictive. When followed, a good budget will ensure you’re able to attain necessities with room to spare.
A common rule of thumb is the 50/30/20 plan. The breakdown includes:
50% of your income after tax goes towards needs
30% of your income after tax goes towards wants
20% of your income after tax goes towards savings
This rule was developed by Elizabeth Warren and her daughter Amelia Warren Tyagi in their book All Your Worth: The Ultimate Lifetime MoneyPlan.
2. Think big picture
Money troubles rarely dissolve overnight or go away with a quick fix. Once you’re on a realistic budget, trust the process and exercise patience. Try to realize that stress serves no constructive purpose if you’re taking the right steps. Finances are stabilized with daily discipline, not fruitless worrying.
3. Focus on the progress you’ve made
Some folks tend to magnify the bad and minimize the good. For example, let’s say you want to save $500 a month for two years so that you can put a down payment on a house. After four months, you find yourself focusing on the $10,000 to go rather than the $2,000 you’ve already managed to save.
Instead of focusing on scarcity, think about the amount you have saved or the progress you made.
4. Combat worries with outside advice
External help from a financial counselor or advisor can help pinpoint bad financial habits in order to quell money stress. An expert will help you develop and stick to a budget, and can provide guidance on long-term saving strategies. An outside eye can lend a new perspective and may help you feel less isolated along the way.
5. Stop putting pressure on yourself
Doing something is always better than nothing. The fact that you’re researching how to improve is the first step towards taking control of your financial situation. Be patient with yourself without expecting perfection. Practice gratitude and contentment. There’s always tomorrow.
6. Establish an emergency fund
A safety net of extra funds can lend peace of mind that an unexpected financial obligation won’t destroy your financial health. Consider starting a rainy day fund and setting a goal to save up six months of replacement income. That way, even losing your job won’t cripple your ability to pay bills. Earn interest by opening a high APY savings account.
7. Prioritize your goals
Making a list of your financial goals can help create tactile milestones. Decide which goals are most important to you. Then, allocate a set amount of money toward that goal each month. Sorting out your priorities will help shape the way you spend your money.
If your long-term goal is to buy a house, organize your budget to help ease the stress of potential future mortgage or loan repayments.
Top financial stress triggers
Money is the number one source of stress for Americans nationwide, according to a 2018 study conducted by Northwestern Mutual. And for good reason. Everyday, we’re exposed to thousands of demands for our cash.
Common sources of money stress include:
Paying off debt. Mounting interest rates make debt an intimidating rival, especially if late payments or big balances negatively affect your credit score.
Planning for retirement. 40% of Americans feel anxious about living longer than their retirement fund lasts, according to Northwestern Mutual’s findings.
Funding an emergency. Unexpected illness, car troubles, and other unfortunate events can quickly deplete rainy day funds.
Enrolling in higher education. College is notoriously expensive, but non-negotiable for many career paths.
Lack of stable income. Working as a freelancer, self-employed person, or contractor can lead to stress from week to week.
Making ends meet. For many Americans, simply paying bills each month is enough to cause anxiety.
How financial stress affects your health
Like many emotionally taxing circumstances, money stress can negatively affect your health and well-being. Short-term stress, if not properly addressed, can lead to:
Headache
Upset stomach
Fatigue
Poor sleep
Difficulty concentrating
Low tolerance for frustration
Weight loss or gain
Interpersonal conflict
Long-term side effects of rampant money stress can include mental illness like depression, as well as physical symptoms like high blood pressure, heart disease, skin problems and more.
The good news is that you’re not alone. Help for financial distress exists: And there are steps you can take today to shift things back on track.
Main reasons why people find money stressful:
Credit card debt is by far the number one financial stressor for American adults, with 35.4% saying they sweat their credit card statements, according to a survey conducted by Finder. Next up are mortgages, with a little over a fifth (22.4%) of Americans worrying about their home’s finances. Rounding out the top three financial stressors are student loans, with 13.5% worrying about their college debts.
At the other end of the spectrum are personal loans, with less than one-in-ten (7.9%) American adults having concerns about the money they’ve borrowed.
Percentage of respondents with debt that are stressed about each type
Credit card debt
35.4%
Mortgage
22.4%
Student loans
13.5%
Medical debt
12.3%
Auto loans
8.5%
Personal loans
7.9%
Bottom line
Most stresses in life come from uncertainties and a fear of the unknown. If you’re hoping for personalized financial advice, consider partnering with a financial planner.
Frequently asked questions
To receive Social Security disability, you must be unable to perform a “substantial” amount of work due to an extended physical or mental impairment lasting 12 months or more. A substantial amount of work is defined as making more than $1,310 per month for seeing folks, and more than $2,190 per month for blind people. Your inability to work will likely need to be validated by a clinical professional.
Typically, a financial counselor’s services are geared towards people with lower income who need help paying off debt. Financial advisors tend to specialize in long-term planning to help clients meet substantial goals, such as buying a house or saving for retirement.
Consider calling the Substance Abuse and Mental Health Services Administration’s helpline at 800-662-4357 for free and confidential treatment referral. You’re not alone, and there are people available who want to help.
One method for daily coping is faking it ’til you make it. Stay away from alcohol, make sure you’re getting seven to eight hours of sleep at night and take time to relax and play. Realize what parts of your life are within your control, and let go of the stressors that you can’t change.
For all media inquiries, please contact:
Richard Laycock, Insights editor and senior content marketing manager
Cassidy Horton is a freelance personal finance copywriter and past contributing writer for Finder. Her writing and banking expertise have been featured in Forbes Advisor, Money, The Balance, Money Under 30, Insure.com, and other top digital publishers. She holds a BS in public relations and an MBA from Georgia Southern University. See full bio
Richard Laycock is Finder’s NYC-based lead editor & insights editor, spending the last decade data diving, writing and editing articles about all things personal finance. His musings can be found across the web including on NASDAQ, MoneyMag, Yahoo Finance and Travel Weekly. Richard studied Media at Macquarie University, including a semester abroad at The Missouri School of Journalism (MIZZOU). See full bio
Cardless cash provides a convenient way to use an ATM without their card. If you often go out without your wallet, or want to make it easier for family members to take out money, this is a feature that deserves a second look.
1. Open a new account 2. Update automatic payments and direct deposit 3. Transfer funds 4. Contact your bank 5. Request written confirmation
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