The 5 Best Strategies to Cope with Financial Stress

PUBLISHED Aug 23rd, 2021 & UPDATED ON Dec 21st, 2022

The American Psychological Association (APA) recently released their Stress in America 2020 report and (to no one’s surprise, honestly) money is reported to be a significant source of stress. That is, 64% of the Americans surveyed reported financial stress — a number which jumps to 73% when looking at income levels below $50k.

That’s not good. Ok, that’s terrible. (Still an understatement). We know the past years have been full of special circumstances, but even as we live and survive through “unprecedented times,” the reality is that we will have to face the consequences of this stress.

At first it might show up as anxiety, trouble sleeping, or headaches, but if the stress is unrelenting, research also points to chronic health problems, like diabetes and heart disease. Do we have your attention yet?

Financial stress can also be a sensitive subject for a lot of people. It happens to be one of those things we don’t talk about openly, and we get it. We understand why. Some people might feel ashamed or embarrassed by the state of their finances. Others have a hard time asking for help because they’re afraid of being judged or looked down upon. And for many, trying to understand money management in itself is completely overwhelming!

Even if you feel lost, keep in mind that you’re not the only one experiencing financial stress. And if you’re facing financial stress, it’s not because you are simply bad with money. The truth is, you may not have been exposed to the world of finance before and you don’t know its language — the term we like to throw around for that is “financial literacy.”

What Is Financial Literacy?

Financial literacy is a fancy way of talking about the ability to understand how money works. That sounds a little scary, doesn’t it? “There must be sooo much to know about money before you know how it works.” Yes, and no! Before you go on picturing yourself as a character in The Wolf of Wall Street, keep in mind that you can start small. Financial literacy is about learning a few principles that you can apply regardless of how much money you make.

Basically, you’re making a plan for your money. That usually starts off with budgeting, which helps you track where your income is spent to ensure all of your bills and necessities are covered. You also learn how to save money, either for emergencies or for big purchases that you’re working towards. When you’re ready, you can start setting goals for yourself, whether that is saving for future tuition, paying off debts, or investing a portion of your savings. Having a plan for your money sets you on the right path and makes you feel less uncertain about your finances. Does that mean less financial stress in your future? You bet.

How Financial Stress Harms Mental Health

It’s no surprise that dealing with financial stress can take a serious toll on your mental health. You might feel like you have no sense of control over your life or that your finances are holding you back. This can create a ton of anxiety and cause you to shut down emotionally or avoid the problem.

Maybe you stop checking your bank account or refuse to open your mail because you don’t want to see how bad your finances have gotten. But it’s still in the back of your mind, no matter how much you try to ignore the issue.

It’s also common to cope with financial stress by turning to unhealthy habits, like drinking/smoking/etc. more than you normally would. Built-up stress can also make you irritable, moody and not like yourself. Out of shame, you might isolate yourself from the people in your life. This only makes you feel even more alone in the situation.

Financial stress can also lower your self-esteem and self-worth. Your inner critic might pipe up with negative self-talk, making you wonder why you can’t be as good with your money as other people. You might also be dealing with lower energy levels, less sleep and lack of focus. Your performance at school or work might be affected, making you feel even worse about yourself. When stress has taken over, your normal routine might feel next to impossible!

It’s scary reading about all of the negative ways financial stress can impact your mental health…but you know what we’re NOT going to do? Leave you here, on this scary and depressing note. Let’s learn some coping strategies to deal with your financial stress!

5 Coping Strategies for Financial Stress

If there was a way we could take all of your stress and make it go POOF, we would. So the best thing we can do instead is give you a few coping strategies that might make the strain of your finances and the anxiety around them a little easier to bear. Let’s dive thru them together!

1. Learn About Money

One of the best ways to tackle your financial stress is to get to the source of the problem. If your stress is related to money management and not knowing what it takes to plan your personal finances, start there. And full transparency, it might be really intimidating at first but give yourself the time and space to learn and be kind to yourself as you’re starting out. Whether you’re starting with some basic budgeting lessons or beginning to learn about methods of investing, allow yourself to not be good at it right away. The focus here is on the long term, so try to build a consistent practice and continue to reinforce your awesome new habits.

2. Reach Out for Support

If you feel overwhelmed and need some advice for your personal situation, don’t feel ashamed to reach out. Having a support system can help you achieve your goals and you get to decide who is part of that system!

Maybe your friends and family have been through a similar situation in the past and they have some wisdom to impart. Or maybe you don’t want them involved at all, and you’d much rather talk to your therapist about the stress! What about a financial advisor? Would reaching out to an expert help alleviate some of your stress?

Do what you think is best for you! Just keep in mind that having a support system to help you out will eliminate some of the stress and make you feel less alone.

3. Keep Practicing Self-Care

When we feel stressed, we start to neglect self-care. That’s not ok. You could use it now more than ever! And it doesn’t have to be expensive or add to your financial stress. You can go for a walk, bake some cookies, read, stretch, you name it. There are tons of self-care ideas for stress to choose from. Find ways to de-stress and look after your wellbeing. Mark out time in your calendar for it. It makes all the difference!

4. Write Down Your Accomplishments

Journaling is a great practice to reflect and celebrate on your progress. We’ve been shouting this from the rooftops since day one because journaling has so many positive benefits for your mental health.

When it comes to your financial stress, you can learn how to set goals with journaling. Use it as a helpful tool for tracking your accomplishments. Then when you hit a financial goal, write about how rewarding or even stress-relieving it feels.

You can also use journaling to think through and reflect on other aspects of financial stress that are completely and utterly outside of your control, like systemic barriers, racism, or other inequities that you experience. Writing it down can help you cope with some of the emotions that come up from these larger systemic factors, espcially if you don’t feel like this is something you can share with your loved ones.

You can look back on these entries whenever you need inspiration to keep going with your goals or when you need an emotional check-in.

Better yet, you can look back on these entries yeeaarrsss from now when you’re visiting the Maldives.

5. Reward Yourself

After putting a ton of time and effort into managing your finances, you deserve to reward yourself! Whenever you meet a financial goal that you’ve been working hard towards, do something nice for yourself. It’s okay to treat yourself to a movie, dinner or buy something nice as a reward for what you’ve achieved. It wasn’t easy!

While these strategies are helpful for coping with financial stress, they’re not long term solutions and they certainly don’t address systemic issues that we as a society need to address. The best thing you can do to overcome your financial stress is to eliminate the source of the stress to the best of your abilities. Your mental health and wellbeing will thank you for it.

Also, keep in mind that financial literacy is not a superpower that anyone is born with. You’ve got this!