Financial stress refers to negative feelings and worry caused by money issues. With rising costs of living and stagnant wages, financial stress is increasingly common for Americans from all walks of life.

Over 75% of adults report experiencing financial stress on at least some days, with 22% feeling extremely stressed about their financial situation according to an American Psychological Association survey.

The good news is there are many effective strategies to help cope with financial stress and get your money situation back under control.

Causes of Financial Stress

Some common triggers for financial stress include:

  • Debt – Credit card balances, medical debt, student loans, or other money owed
  • Low income or unemployment – Not making enough money to cover expenses
  • High cost of living – Housing, healthcare, education and other costs outpacing incomes
  • Poor money management skills – Not budgeting or controlling spending
  • Financial obligations – Child support, alimony, elderly parent care costs
  • Unexpected expenses – Medical bills, home repairs, auto repairs
  • Retirement uncertainty – Not having enough savings for later life
  • Stock market volatility – Investment losses or volatility

Effects of Financial Stress

The burden of constant financial worry and strain can negatively impact both physical and mental health:

  • Anxiety, irritability and depression
  • Sleep issues like insomnia
  • Headaches, stomach problems and other pains
  • Relationship conflict over money issues
  • Reduced productivity and focus at work
  • Unhealthy coping behaviors like emotional eating, smoking, or drinking

Left unaddressed, financial stress can become a vicious cycle of worsening stress, health and finances.

Assess Your Finances

To tackle financial stress, start by assessing your complete financial situation:

  • Track all sources of income: wages, side jobs, government benefits, gifts etc.
  • Make a detailed budget accounting for fixed and discretionary expenses.
  • Review spending to identify areas to cut back and save.
  • Check credit reports for errors that could be lowering your credit score. Dispute inaccuracies.
  • Set short and long term financial goals.
  • Calculate your net worth by adding assets and subtracting debts.

How to Cope with Financial Stress

Once you understand the full financial picture, here are proven strategies to manage stress:

  • Communicate openly with family about money and make joint decisions.
  • Seek free financial counseling services to help with budgeting and debt.
  • Join a support group to share struggles and advice with others facing similar issues.
  • Take care of your physical and mental health with healthy habits.
  • Develop healthy stress relief outlets like exercise, hobbies and socializing.
  • Practice mindfulness, gratitude and focusing on the present.
  • Avoid unhealthy coping mechanisms like gambling, emotional spending or substance abuse.
  • Research relief programs and community resources you may qualify for.
  • Consolidate high interest rate debts to lower monthly payments.
  • Boost income with a side job or exploring a career change.

Create a Financial Action Plan

Working with a financial counselor or advisor, create an action plan to take control:

  • List short and long term money goals. Include target savings amounts.
  • Make necessary spending cuts to free up cash flow. Distinguish wants versus needs.
  • Pay down highest interest debt first while making minimums on everything else.
  • Build an emergency fund with 3-6 months of living expenses.
  • Contribute enough to retirement accounts to get any employer match.
  • Invest any extra money for long term growth.
  • Automate bill payments and transfers to savings accounts.

Seek Professional Help

If financial stress is taking over your life, consider these trained experts:

  • Nonprofit credit counselors can help create debt payoff plans.
  • Financial planners develop long term strategies for saving and investing.
  • Bankruptcy lawyers advise if legal protections are right for your situation.
  • Mental health professionals like therapists provide counseling for related anxiety or depression.

Alternative Financial Services

Be cautious of risks with services like payday loans, cash advances, or debt settlement companies. They often worsen financial distress.


What is the best way to relieve financial stress?

Openly communicating about money, making a budget, paying down debt, and saving provides a sense of control.

How can I get help managing my debt?

Nonprofit credit counseling agencies offer confidential debt management plans with lower interest rates.

What steps can I take to improve my finances?

Look for ways to increase income, make a budget to cut expenses, pay off high interest debt, and build up emergency savings.

When should I consider filing for bankruptcy?

Bankruptcy should only be considered as an absolute last resort if you cannot pay debts and need legal protection

How do I choose a financial advisor?

Research credentials like CFP certification, fee structure, and areas of expertise to find one who is a good fit.


Though financial problems can trigger significant stress, there are many free resources and professionals who can help you regain control. By communicating more, correcting bad money habits, and taking action, you can find relief even in challenging times. Facing financial stress head-on will pay off now and in the future.

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