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Financial Stress : A Big Deterrent On Employee Wellness And Work

9 min read
Last Updated on 28 April, 2023

Financial stress can be described as a condition that arises from an individual's financial crisis. In simple words, it is a condition created by unmanaged economic events.

Finance is the most common stressor of the 21st century. The root can also be traced back to the loss of a job, escalating debt, unexpected expenses, or a combination of other stumbling blocks.

Definition Of Financial Stress


Money is one of the most common causes of stress today. Financial Stress is a feeling of anxiety, tension, or worry over one's earnings, debt, and ongoing obligations.

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 lead to stress.

It is an uneasy and unhealthy attitude toward engaging with and effectively administering personal finances. 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."

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.

Financial stress in an employee can be caused due to following:

  • Debt repayments
  • Matters of investments or savings
  • Monthly expenditure management
  • Cash flows obligations
  • No adequate retirement planning, etc.

Also read: 86 All-in-one Financial Wellness Quotes

Effects of Financial Stress on employees


Financial chaos can take a significant toll on an employee's mental and physical health. It can also affect the overall quality of life. According to a study released in 2017 by Northwestern Mutual, a group of people, moreover the millennials are suffering from financial tension, affecting their productivity and performance at work.

Here we will discuss the effects caused by financial worry:

1. Physical problems


Financial stress or upheaval in your life can impact your heart and lungs and give rise to high blood pressure, arthritis, diabetes, and even asthma.

It can also be a responsible factor for short-term difficulties like headaches, muscle tensions or pain, chest aches, and stomach upset.

Besides, unfamiliar body pain leading to uneasiness at work can be troublesome. There is an increased chance of adopting an unhealthy diet as a way to cope up with stress.

But, physical problems and expenses increase more when living a poor lifestyle. For instance, the rising intake of abusive substances or street food can result in more healthcare issues.

According to an APA survey published in 2014, 33% of Americans reported eating unhealthy foods or overeating to deal with stress.

2. Mental and Behavioral health problems


Sometimes due to financial distress, employees tend to isolate themselves. For many, disclosing their financial situation becomes shameful and is considered taboo.

Issues like bipolar disorder, schizophrenia, depression, anxiety disorder, sleep disorders, or insomnia significantly affect employee well-being. They create more trouble on a professional level, affecting relationships with teammates.

With financial stress, there are chances that these issues might keep increasing. Furthermore, increasing your medical expenses as well as instabilities and worries.

These are few common symptoms:

  • Depression
  • Anger issues
  • Stress and anxiety
  • Productivity loss
  • Social Withdrawal
  • Adaptation of Unhealthy coping mechanisms
  • Absenteeism
  • Unexplained leaves
  • Extending deadlines
  • Performance issues
  • Turnovers

Financial stress can impact the mind and body through apprehensive action or behavior. It seeks to impair one's ability to think and perform best at work.

But, managing your finances from the initial periods; will ease up the burden.

Read more on: Financial Wellness- An Issue in Overall Employee Wellness

The Impact of Financial Stress Upon Overall Health


Studies also suggested that economic pressure gives rise to unhealthy eating behaviors —like high-fat or sugary foods, smoking, and drinking to escape tensions.

Research also shows that people in debt have higher rates depression and anxiety of than those who are not. Around 58% of employees cannot meet their monthly expenses, and 3 out of 4 employees are unprepared for job loss. In today's world, the retirement age is shrinking, which is an added stress factor.

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

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

Suggested Read: Relax, Recharge, Repeat: 41 Ultimate Self-Care Sunday Tips For Employees


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

You may acquire unhealthy eating habits under stress to numb or soothe distressing emotions. 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.

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.

Related: 6 Steps To Financial Wellness During Covid-19

Steps that every Employer must take to reduce the Financial Stress of Employees:


1. Being more Empathetic towards Employees

Empathy can transform lives on many levels. It is also the foundation of a healthy, collaborative, trustworthy, and positive work culture. The mental well-being and physical health of the employees is also an employers' responsibility. So, empathy and compassion are crucial at workplaces.

Empathy unlocks deeper and meaningful professional growth along with a shared organizational vision. It is the key to create an open culture with a stigma-free conversation.

It is empathy that allows co-workers to give opinions and advice on matters including financial wellness.

Related: 21 Positive Thinking Ideas For A Workplace To Encourage

2. Imparting knowledge on Financial Wellness


Some also suggests that employees in several organizations face financial stress due to a lack of proper financial management and financial literacy.

Employers can arrange financial wellness talks, seminars, and workshops to enhance employees' knowledge of managing finance. It is one of the crucial tasks every organization must do or arrange for its employees.

Organizations must equally emphasize financial wellness programs along with health and wellness programs. Helping employees manage their finances builds a sense of economic and job security.

3. EAPs and Financial Planning Courses

Employee Assistance Programs are a necessity in the modern-day. EAP's are vital for financial wellness programs as they prepare employees to meet long-run financial goals.

They provide free counseling by finance experts on how to be financially sound or deal with finance, manage debt, create a budget, find work, communicate with creditors, or claim benefits or financial assistance.

Having these programs is a matter of mental stability and future security.

An Employee Assistance Program (EAP) is a voluntary, work-based program that offers free and confidential assessments, short-term counselings, referrals, and follow-up services to employees who have personal and work-related problems.

4. Employee Wellness Apps

An employer can reduce health and wellness expenses caused by the financial burden by introducing corporate wellness programs for its employees, like Vantage Fit.

Vantage Fit is a one-stop employee wellness solution. It helps employees live a healthier lifestyle, improve productivity and increase motivation at work. Employees can also enjoy Vantage Fit, as it is a cost-effective alternative that will also reduce their healthcare costs.

Some of its features include:

Ways To preventing 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 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 individually. Write out the steps 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.


Knowing about finances is the first step in taking control of your financial situation. Financial literacy is vital. The better the knowledge, the easier it will become to reach your goals. It will also help you learn about dealing with your monthly/yearly bills step-by-step.

Budgeting is the best way one can avoid financial distress. It lets you track your daily spending, earnings, or investments. Also, looking into your account balance and setting goals can be your first step toward it.


1. How can employers help employees who are experiencing financial stress?

Employers can offer financial wellness programs, such as financial education, access to financial planning resources, and employee assistance programs. Employers can also provide benefits such as retirement savings plans, flexible work arrangements, and competitive compensation packages.

2. How does financial stress affect employees?

Financial stress can have a significant impact on employees, both personally and professionally. It can lead to decreased productivity, absenteeism, and physical and mental health decline.

3.Can financial stress impact an employee's ability to do their job?

Yes, financial stress can impact an employee's ability to do their job. It can lead to increased absenteeism, decreased productivity, and decreased job satisfaction.

4. How can employees manage financial stress?

Employees can manage financial stress by creating a budget, seeking professional financial advice, reducing unnecessary expenses, and setting financial goals. They can also consider seeking support from family, friends, or a mental health professional.

5. How can financial stress impact an employee's mental health?

Financial stress can lead to anxiety, depression, and other mental health issues. It can also worsen pre-existing mental health conditions.

This article is written by Parismita Goswami who is a content writer and marketer at Vantage Circle. A feverish poet and cinephile with an intense taste for music, specifically rock, she has the heart of an explorer, learner, and is a lover of the Himalayas. To get in touch, reach out to

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