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Financial Stress : A Big Deterrent On Employee Wellness And Work

6 min read
Published on 02 August, 2021

Financial stress can be described as a condition that arises from an individual's financial and economic matters. In simple words, it is a condition created by unmanaged economic events. It can lead to anxiety, worry, or a sense of scarcity accompanied by a physiological stress response.

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

What is Financial Anxiety?

The psychological definition of financial anxiety is "an uneasy and unhealthy attitude toward engaging with, and effectively administering personal finances."

The leading causes of Financial Stress in an employee can be caused due to:

  • 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

How Do Financial Stress Torment Employees?


Let's talk facts about how financial stress has created problems and affected employees at work.


Those who have chronic diseases or severe medical conditions frequently find themselves struggling:

  • Debt
  • Bankruptcy
  • Student loans
  • Credit card debt
  • Not sticking to a budget actions
  • Eliminating discretionary income., etc

There is a correlation between a failing economy and failing health. Let's take the example of the Public Health Researchers who identified the possible links to a growing list of growing physical and mental health issues during the 1930s great recession.


Studies also suggested that economic pressure gives rise to unhealthy eating behaviors —like high-fat or sugary foods, smoking, and drinking to escape tensions. In the aftermath (2007–2009) recession, there was also a rising number of health cases in mortality rates, cardiovascular disease, cognition, depression, etc.

Research 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.

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:


The first step in taking control of your financial situation is knowing about finances. 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 allows you to keep track of your daily spending, earnings, or investments. Also, looking into your account balance and setting goals can be your first step towards it.

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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