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financial stress

5 Remedies for Financial Stress

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Americans are a stressed-out bunch. The primary source? Money.

According to a 2019 report from the American Psychological Association, two-thirds of Americans said money is a top source of stress. It’s been that way since the survey began in 2007. 

It’s no wonder we’re plagued with financial worries. Four in 10 American adults reported they would have trouble covering an unexpected $400 expense, according to a study from the Federal Reserve. And a recent survey from Charles Schwab revealed that nearly 60% of US adults live paycheck to paycheck. 

Our day-to-day money challenges mean most of us aren’t thinking about saving for the future, either. Only 38% of people have an emergency fund, according to Schwab. One in five Americans has no retirement savings, a Northwestern Mutual study found. One in five Americans are also repaying student loans.

All this financial stress comes with a steep price — we’re paying for it with our physical and mental health.

If you’re feeling the pain of financial strain, here are some common ways it can impact your health, along with five tips to help you stress less while taking control of your personal finances — and your life.

How Financial Stress Affects Your Health

Poor financial health correlates to poor physical health: 59% of people don’t get routine check-ups, 60% don’t exercise regularly, and 38% are more likely to skip preventative healthcare visits due to cost,  a survey from online lending marketplace LendingClub revealed.

Mental health and financial stress are strongly linked, too. For example, people with debt are three times more likely to have a mental health problem such as anxiety or depression. “Research shows that people with high levels of debt have higher rates of depression,” said Anne Brennan Malec, PsyD, LMFT, a financial therapist and founder of Symmetry Counseling in Chicago. 

And stressing about your finances can make you physically ill. Any type of prolonged stress, including financial strain, creates a constant “fight or flight” response in the body. That wreaks havoc on your immune system, making you vulnerable to disease. Over half of both women (68%) and men (56%) report losing sleep due to money worries, according to a survey from

How to Deal with Financial Stress

Stressing about your finances won’t solve your money issues. But being proactive about getting to the root of your worries and addressing them can help. 

Here are five easy ways to create a plan to get your finances on track and position yourself for a stronger,  less stressful financial future:

Create a spending plan and stick to it

Having a spending plan (aka a budget) is one of the best ways to take control of your money and stop the cycle of worry. A spending plan lets you decide when and how you spend your money. It also makes sure you’re able to cover “must-haves” — fixed expenses like housing, food, utilities, and healthcare, while also working toward paying off debt and building your savings. 

Having a spending plan doesn’t mean foregoing fun. “Remember to leave room for things you enjoy,” noted Jennifer Dunkle, a licensed professional counselor based in Fort Collins, Colo. “It may mean sacrificing elsewhere, but you have to spend less than you earn to get ahead.” 

Eliminate debt

If debt is keeping you up at night, take steps to get rid of it. First, tally up all of your debt to determine exactly what you’re dealing with. Then, pay it off using a “debt snowball”: Pay off the smallest balance first, then put that payment toward the next smallest debt, and so on until you’ve paid it all off. Being debt-free can significantly reduce your financial stress and improve your peace of mind.

Build an emergency fund

An emergency fund is a “safety net” to help you cover financial mishaps or unexpected expenses, such as a large medical bill, surprise car repair or an unexpected job loss. Having an emergency fund can reduce your stress because it provides a financial buffer against having to borrow money to pay for an unanticipated expense. 

How much should you save? Most financial experts recommend setting aside enough to cover three to six months’ of essential living expenses. You may want to save even more if you have a family and children, or if you have less stable employment or earn a variable income.  

Building up your emergency fund may seem daunting at first, especially if you’re feeling strapped for cash. Whether it’s $10 or $100, putting aside a little each month adds up over time. You could also consider selling any unused items you have around the house to help build your emergency fund even faster. 

Read more: How Much Should I Put into My Emergency Fund?

Boost your income

Want to get rid of financial stress? Make more money! Consider doing something you enjoy to make a little extra cash in your spare time. Nearly half of Americans have a side hustle, driving for Uber or Lyft, delivering groceries for Instacart or food with DoorDash, or doing freelance work, according to a survey. Or, if you want to create a passive income stream, consider creating an online course through Udemy or Teachable, for example.

Get some help

If you’re really struggling with financial stress, seek outside help. Taking a class on basic budgeting or money management can help you get a handle on your finances. A financial planner can create a long-term savings and investing strategy that allows you to take care of today’s needs while planning for the future. A financial therapist can serve as a sounding board and help you manage any mental health concerns related to financial stress.

By decreasing financial stress, you can increase your confidence that you are in control of your finances, not the other way around. No matter what your age or financial situation, you have what it takes to make the changes necessary to improve your mental, physical, and fiscal well being.

Conquer your student debt. Refinance now.

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Disclaimer: This blog post provides personal finance educational information, and it is not intended to provide legal, financial, or tax advice.