How to Manage Financial Stress
How to Manage Financial Stress

How to Manage Financial Stress

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Save more, spend smarter, and make your money go further

For most of us, some level of financial stress is unavoidable. You’ll always have bills to pay, a job to keep, and the occasional emergency expense to deal with. What really matters is how you cope with that stress.

With a little forethought and a lot of soul searching, even the most anxious consumer can start to gain a sense of control over their financial – and mental – health. Following these tips can go a long way towards putting you back in the driver’s seat.

Face the Music

A recent survey by Cushion found that more than 50% of Americans don’t know their bank account balance. The reason? They’re too scared to look.

The first step to managing financial stress is taking an honest appraisal of your situation. Make a list of every aspect of your financial life that’s stressing you out. Are you scared of all the credit card debt you’ve racked up? Are you worried that your paltry emergency fund won’t keep you afloat if you lose your job? Do you feel ashamed of not having a budget in place?

Then, start by organizing your financial accounts. Make sure you have online accounts created for each bank, investment, and credit account. Set up alerts for due dates so you don’t miss a payment.

Check your credit report for free at Your credit report will show all your current and active credit accounts in case you forgot any.

Then, set up a time to go over each account. If you have multiple bank accounts, consider consolidating them to simplify the process. Look for any recurring fees, subscriptions you no longer use, or fraudulent charges.

By shining a light on all the financial problems you’re scared to face, you’ll probably realize something important – none of these issues are as scary as they seem, and you’re more than capable of dealing with each and every one of them.

Create a Budget

Once you’ve gone over every account, take some time to track your expenses and create a budget. Using a budget will help you identify leaks in your spending where you could cut back.

The act of budgeting and tracking your expenses might seem like a punishment for your past spending mistakes but think of it as the road to salvation. If your main goal is to manage your financial stress, knowing where your dollars are going matters. Being able to direct your money toward savings or debt payoff with a budget will ultimately lead you to a healthier financial – and emotional – place.

If you’ve never budgeted before, don’t get discouraged if you overspend in a few categories at first. Budgeting is like cooking. Just because you don’t follow the recipe perfectly doesn’t mean the meal won’t taste good. Keep tweaking your budget until you find a happy medium.

Break Down Your Tasks

When you’re financially drowning, it can seem impossible to find a life raft. Instead of floundering aimlessly, it’s time to pick a direction and start swimming.

Get a notebook or computer and write down all the tasks that will help you feel better. Try to break them down into manageable assignments. For example, instead of writing down, “Consider taking out a personal loan,” write down, “Complete a personal loan application with three companies.”

The goal is to make the tasks less overwhelming, helping you feel more motivated to tackle them. Once you have everything written down, assign each task for a certain day. Allocate more time per task than you think it will take, in case you run into any problems.

If you do hit a snag, take a breath and brainstorm some possible solutions. Try to finish each task before starting a new one so you don’t get distracted.

Feel Your Feelings

When you’re feeling stressed, it’s easy to soothe yourself with food, alcohol, or binge-watching. While it’s important to relax, make sure you’re not using an unhealthy coping strategy to avoid processing your emotions.

Take some time to sit with your feelings, as hard as that may be. Go for a walk, sit on the porch or write in your journal. Feeling your feelings doesn’t mean wallowing in despair or sadness. It just means acknowledging what you’re feeling in an honest way.

Recognizing your feelings will also help you avoid using retail therapy, which is crucial if you’re on a budget, trying to pay off debt or living paycheck-to-paycheck.

Ask for Help

If debt is your main source of stress, the first step should be to contact your lenders and bill providers and ask how to reduce your monthly payments.

Start by calling your cell phone, car insurance, internet, and cable service providers to ask if there are any special discounts or rates you qualify for.

Make a list of all your lenders and contact each of them to see if there is a deferment or forbearance program. Since the Covid-19 pandemic, many lenders have been more understanding toward borrowers experiencing financial distress. Before signing up for a forbearance program, make sure you understand how interest will accrue during that time and if there are any special fees.

For example, most mortgage lenders will let you defer payments for a few months, but you’ll owe the full amount once the deferment period is over. This could come as a huge shock if you don’t plan ahead.

If you’re carrying a balance on any credit cards, contact each company and ask them for a lower interest rate. Remind them that you’ve been a reliable and loyal cardholder. If a company says no, set a reminder in your phone to ask them again in a few months.

Take Care of Your Mental Health

In a 2019 survey from the Money and Mental Health Policy Institute, 72% of respondents said their mental health problems worsened their financial situation. If this describes you, consider talking to a licensed mental health expert as a first step to developing a healthier relationship with your finances.

Use resources like the Open Path Collective, where therapists only charge between $30 and $60 for each session. The Substance Abuse and Mental Health Services Administration also has a list of community clinics that provide low-cost services. If you already have a therapist in mind, ask them if they offer a sliding scale payment system.

Many universities also offer therapy on a discounted or sliding scale. Contact the local psychology department and ask if they accept outside clients. Psychology Today has a therapist finder tool that lets you filter by price.

Depending on your particular healthcare policy, your insurance provider may also cover some sessions. Ask your HR department if your company has an employer assistance program that includes mental health counseling.


Save more, spend smarter, and make your money go further

Zina Kumok
Zina Kumok

Written by Zina Kumok

Zina Kumok is a freelance writer specializing in personal finance. A former reporter, she has covered murder trials, the Final Four and everything in between. She has been featured in Lifehacker, DailyWorth and Time. Read about how she paid off $28,000 worth of student loans in three years at Conscious Coins. More from Zina Kumok