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Financial Stress and Mental Health: An Everlasting Relationship

9 min read
Published on 08 August, 2022

Financial stress is one of the most prevalent stressors in contemporary life. Be it loss of employment that causes your issues, mounting debt, unforeseen bills, or a mix of causes.

72% of Americans reported worrying about money before the epidemic, according to a study by the American Psychological Association (APA). Money worries can affect our mental and emotional health. How does the connection function? Here's a closer look at the negative effects of financial stress on your mental health.

What is Financial Stress?

Financial stress is a feeling of anxiety, tension, or worry over one's earnings, debt, and ongoing obligations. One of the most common causes of stress is money. Although it can affect anyone, low-income employees are more likely to suffer. Not having enough money to cover your needs, such as rent, bills, and food purchases can cause stress.


Lower-income and underlying work-related issues are one of the main causes of stress. They may work under extreme conditions/pressure but are hesitant to leave because doing so would make it difficult for them to sustain themselves.

“In fact, according to BrightPlan's 2022 Wellness Barometer Survey on the health of employee well-being, there has been an 11 percent increase in financial stress among employees since 2021.”

It is common for most people to worry about their finances. But if it interferes with your daily activities, money problems can cause poor health. For instance, you might discover that your concern over money is driving you to worry so much that you cannot concentrate on or enjoy other aspects of your life.

Symptoms of Financial Stress

Although the signs of financial stress are similar to everyday stress, they occur mostly because money matters and affects how we feel, think, and act regarding money. If you are going through any of the following, your life may be impacted by money issues:

Shortness of breath and a racing heart are indications of anxiousness while thinking about money.

  1. Avoiding emails, calls, and in-person contact with creditors.

  2. Avoiding social engagements and avoiding friends.

  3. Constant feeling of fear of losing and running out of money

  4. Feeling like you can't keep up with things or losing control of your money.

  5. Anger or irritation with those with a financial stake in your life, such as a family member you split bills with or a boss who decides on your increment at work.

  6. Anxiety, worry, or despair about the future.

The Physiology of Health and Finances


Stress is unavoidable or sometimes part and parcel of life. Because now and then, we have to deal with stress. Although it can be advantageous in short-term circumstances, stress is bad for one's health. Some physical symptoms of anxiety include headaches, stomach discomfort, chest pain, and high blood pressure. Even chronic illnesses like diabetes and heart disease may be impacted by it.

  • The central nervous system controls the fight-or-flight response of the body.
  • The stress hormones cortisol and adrenaline are released by your body in response to stress, causing your breathing and heart rate to increase and muscles to stiffen up.
  • Your hypothalamus should instruct your systems to return to normal after the stressor. Chronic stress can result in additional physical and mental health issues.

The Impact of Financial Stress Upon Overall Health

Financial stress typically forms chronic stress, harming your health and well-being. Financial stress and health are strongly intertwined. Both your physical and mental health can suffer if you're constantly under a lot of stress. Anxiety, despair and other physical symptoms like a rapid pulse, sleeplessness, or elevated blood pressure can all result from the buildup of stress chemicals.

When your body makes these hormones continuously, it might lead to several issues. Chronic stress is the term used to describe the ongoing condition of tension, which can harm your health. Chronically stressed individuals generally are more likely to experience the following:

1. Difficulty Sleeping

You can have trouble sleeping or be awake at night due to financial worries. If you have less sleep, it will make it tougher for you to handle stress's impacts.

2. Lack of Desire to Practice Self-care

You might reduce or minimize some of your self-care practices to save money if you have financial worries. These could be haircuts, eating out with friends, going to the gym, going to the doctor, or getting alternative care like acupuncture.

Suggested Read: 4 Self Care Programs To Foster Health At Workplace

3. Unhealthy Ways of Coping

You may become involved in unhealthy behaviors due to financial stress, such as less mindful eating or abusing alcohol or drugs. A 2014 APA survey found that 33% of Americans admitted to overeating or consuming unhealthy foods as a stress management strategy.

4. Gaining or Losing Weight

To numb or soothe distressing emotions, you may acquire unhealthy eating habits under stress. However, you can discover that stress entirely suppresses your appetite, which results in weight loss. Your regular eating habits may be further disrupted if you feel pressured to skip a meal or two due to financial concerns.

5. Aches, Pains, and Physical Health issues that are not explained.

Physical signs of stress include migraines, heart disease, high blood pressure, and stomach problems. You may find it challenging to put good behaviors first, such as getting adequate sleep or eating a balanced diet.

The Relation Between Financial Health and Mental Health

According to an American Psychological Association survey, financial concerns top the list of stressors. We are aware of the debilitating effects of financial stress, and mental health is impacted by ongoing stress. So there are correlations between money and mental health.

According to Salary Finance survey of more than 10,000 Americans, businesses in the United States lose $500 billion annually due to employees' financial hardship.

"Money can't buy you happiness" may be familiar to you. And we generally agree. It does not negate that financial status impacts mental health and how you feel psychologically and emotionally influenced by your financial situation.

Your cognitive functioning is impacted when you are experiencing financial difficulties.

  • You worry all the time.
  • Your self-esteem is low, and you feel bad about yourself.
  • You feel like you're in a fog and find it difficult to concentrate on anything but money.

Even if you have a good credit score and manage your money well, an unanticipated expense can still catch you off guard and plunge you into a financial crisis. Your self-esteem and self-efficacy might be destroyed if you worry about money.

Stress can make you feel like you should stay home and cut yourself off from friends and family. You may spend all of your time thinking about money-related issues. Your eating and sleeping schedules fluctuate, and your mood and energy levels suffer when you don't get enough sleep. This impacts productivity and interpersonal relationships.

4 Ways to Cope with Financial Stress


You can feel more in charge of your life, experience less stress, and ensure your future by learning how to deal with financial stress and adequately manage your financial condition. You can start your financial coping with some of the following advice:

1. Become more Composed:

You probably won't be able to change your financial condition in a few seconds, but you can change your outlook and reduce your everyday stress. Take a few deep breaths, take a little snack, or do all three to help you relax. Tell a dependable friend about your money concerns if you need to vent.

Suggested Read: 13 Best Stress Relief Products for use in the Office

2. Clean Up your Spending:

Regular budget inspections are crucial to enhancing your financial health because life is rarely consistent. Schedule, arrange, and declutter all the money entering and leaving your bank account to take charge of your finances. You'll experience less stress the more control you have.

3. Ask for Support:

You're not the only one experiencing financial stress. Ask your family and friends for support. Do you know someone who excels at creating budgets? Ask them to assist you. Read financial planning blogs and books to increase your confidence and sense of control.

4. Practice Being Mindful:

Money presents two challenges; dealing with stress differs from dealing with money. A wonderful strategy to reduce anxiety symptoms is to engage in mindfulness practices like breathwork, yoga, or meditation; these practices are also cost-free. Additionally, it can assist you in developing cognitive agility and the ability to tolerate emotional distress, which may help you avoid experiencing financial overwhelm in the future.

Prevent Financial Crisis


As we've already discussed, you can manage your financial anxiety with the help of your support network, self-awareness, and mindfulness, but staying on top of your finances may also be achieved through planning and prevention. Here are some strategies for taking charge of your money and avoiding financial stress:

1. Establish an emergency fund:

Any emergency could put you in debt if you don't have any money saved up for a rainy day. Create a savings account and only use it for unplanned expenses. Most financial experts advise setting aside three to six months' worth of spending if you don't have a specific financial objective. In this manner, stress won't be constantly caused by the possibility of an emergency or job loss.

2. Recognize the debt cycle:

The first step to getting yourself out of debt is to understand it. According to one study, paying off one account at a time and beginning with your lowest bills first may help you pay off your debt more rapidly. Do your homework and keep an eye on interest rates. It is better to pay off the obligation with the highest interest rate to prevent accruing more debt over time.

3. Develop additional sources of income:

If you're stressed financially, you probably already need more money in your budget. You can take on little projects and run your own side business, and there are several opportunities for freelance work. Look after your health in the right way.

4. Do a financial inventory:

List the financial difficulties that worry you the most. To prevent yourself from becoming overwhelmed, take incremental measures to solve each issue one at a time. Write out the steps you can take to achieve financial security today or this week. Make a financial plan and stick to it for a week or a month, purchasing basics.

Try phoning your bank, energy provider, or credit card company to explain your position; if you're having trouble paying your bills frequently, they may create a payment schedule that works for you.

5. Be kind to yourself:

Stress-related to money management can be triggering. Since most of us weren't taught how to manage our money, it might cause us to feel ashamed, insecure, and self-conscious. Be open-minded, empathetic, and receptive to whatever arises as you learn how to manage your money. Avoid letting mistakes, unanticipated costs, or other roadblocks demotivate you.

Suggested Read: 6 Steps To Financial Wellness During Covid-19

Financial Stress in the Workplace

You can avoid financial stress from your employer by managing a few of their needs. Employees under financial strain miss over a month of productive workdays each year. Additionally, they are twice as likely to seek a new career opportunity.

HR managers observed problems with a few employees, including:

  • being unable to pay attention at work
  • decreasing levels of productivity
  • increased tardiness and absenteeism, as well as
  • a general drop in morale.

For a long time, helping employees' financial situation was regarded as a "think outside the box" type of perk. But for several years, the advantages of financial wellness have been rapidly increasing.

Programs for financial wellbeing have also been shown to offer corporations real advantages:

  • fewer staff changes
  • less tardiness and absence
  • fewer demands for advances, loans, and
  • increased employee contentment and general company repute.

The term "employee health" today encompasses physical, psychological, and financial security. There will always be room for improvement. However, nowadays, companies realize their responsibility toward employees' financial health, and some take the appropriate steps by providing their staff with the necessary financial education and services.

Suggested Read: Financial Stress: A Big Deterrent On Employee Wellness And Work

A Word

Managing financial concerns becomes easier when you can make an effort to remove negative emotions from the equation. Even if your financial situation appears dire right now, the amount in your bank account does not accurately reflect your value. You can try to change your spending patterns and improve your financial acumen.

This article is written by Daina Barman who is a content writer and marketer at Vantage Circle. Besides being an epicure trying to cook every dish possible, she likes to dance her way around everything. To get in touch, reach out to

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