Financial Stress Management Techniques 


Do you ever feel stressed about your finances? If you are, just know you’re not alone… In fact, a recent survey by Thriving Wallet found that 90% of Americans said money is a significant source of stress. That’s 9 out of every 10 Americans!  

Let’s address that stress by both lowering AND better managing it. To do that, below we will give you different techniques for dealing with financial stress, by addressing the main drivers of this stress head-on. As the money-induced stress you may feel may weigh heavily on your mental health, we want you to have all the tools you need to address this. All so you can better manage and potentially improve your mental health in the process.   

What started all the way back in 1949 has grown into an important month for addressing the challenges faced by people who may be struggling with their mental health. May being Mental Health Awareness Month, this is an excellent opportunity to speak about the relationship between financial health, mental health, and overall well-being. As financial stress can further drive an array of mental health issues, we want to help you by giving you the tools you need to combat this financial stress. We’ll first go through what drives financial stress, after which we’ll dive into techniques for combating it. Let’s start! 

What drives financial stress?  

First, let’s talk about the main drivers of the financial stress you may be experiencing. Because if we know what drives this stress, we can better address the root causes of this problem. 

Stress, as experts define it, is a response to a perceived threat or challenge. There isn’t one single driver of stress, but it’s rather a combination of different factors that cause you to feel stressed. If we home in on the psychological drivers of stress, the most common factors that drive stress are worrying excessively, a lack of control, and feeling overwhelmed by demands and expectations from the outside world.  

You can probably see how this applies to financial stress. Not knowing where you stand financially, worrying about your finances, and feeling pressure from the outside world, be it from friends, parents, or social media… These are common reasons why you may be experiencing financial stress. It’s important to note is that this is not a full list of factors that contribute to stress, of course. 

Techniques to Help Deal with Financial Stress 

Up until now, it has all sounded a bit gloomy, but the good news is that there are ways to address these common drivers of financial stress. If we know how to deal with those factors and actually do something about it, we may start to get better at both coping with and managing this financial stress.  

#1 – Get Crystal clear on Where You Stand Financially 

One of the main drivers of financial stress is feeling out of control. Often, what drives this feeling is that you don’t know how to improve your financial situation or you don’t know where to start. And the most heard reason for this is that people do not know where they stand financially.  

When it comes to your finances, awareness is key. The first step in understanding your financial situation is to track your income and expenses—what comes in and what goes out every month. By doing this, you’ll get a clear view of where you stand financially, and with this, you’ll find specific areas you might be able to improve on. Rather than your finances being a big black box, you’re getting specific, which can massively help in making you feel in control again.  

#2 – Create a Budget 

If you know what comes in and what goes out every month, you can start creating a budget. That’s where things start to really feel under your control again. There are many apps and spreadsheet templates available for you to use for this, like Credit Karma and Rocket Money

When you know how much comes in and where it flows each month, you can allocate your income to different expense categories. Allocate your income to fixed expenses (rent, utilities, food, etc.), variable expenses (eating out, clothes, grabbing a drink with a friend), savings and, if necessary, debt repayments.  

The key is to be realistic here. And you don’t want to cut back on your expenses too drastically all at once–you want your budget to be sustainable. We’re in it for the long haul. 

#3 – Pay Off Your High-Interest Debt as Soon as Possible 

If you have any debt, that may be one of the main drivers of the financial stress you’re experiencing right now. That’s why it might be smart to make it your mission to pay off your high-interest debt as soon as possible. It truly is a low-hanging fruit, in terms of being able to lower the money-induced stress you may be experiencing. This high-interest debt can include outstanding credit card debt, payday loans, and personal loans. 

To pay off those debts, you want to make a plan. First, list all outstanding debts, ranking them from highest to lowest in terms of interest rate. Then, if you find that this list is rather long, try to negotiate with your creditors by explaining your situation. They might forgive part of your debts or lower the interest rate on your outstanding debts. After that, it’s up to you to stick to the plan, make your payments on time, and work your way down the list.  

(As easy as this sounds, we understand that this task may be quite hard and overwhelming. More on this in tip #5.) 

#4 – Create an Emergency Fund 

One of the most common reasons people get into debt in the first place is because they don’t have an emergency fund. We all know Murphy’s Law says, Whatever can go wrong, will go wrong. At your most vulnerable moment, the worst things often happen. Your car breaks down, just as you’re on your way to a job interview. The roof starts leaking, as soon as winter is kicking in. Or suddenly some dental work needs to be done, right before Christmas.  

It’s in those unfortunate moments, you may find that you have to resort to using your credit card or taking out a payday loan to cover the sudden expense. That is if you don’t have an emergency fund, of course. And that’s how that vicious debt cycle often starts…  

To tackle this problem, the best thing you can do is to start building an emergency fund. And, if you’ve created your budget, you now know how much money you can safely tuck away in this fund each month. Not only may this save you from the need to take on any new high-interest debt whenever something unfortunate happens, but knowing that you have money tucked away for a rainy day may relieve some of the financial stress you may be experiencing right now. 

#5 – It’s Okay to Ask for Help 

Remember, it’s okay to ask for help. You’re not alone in your journey to improve your financial situation and better handle the financial stress you might be experiencing. Even the best in the world, like LeBron James, Tiger Woods, and Tom Brady, have coaches, so why can’t you have one? 

Whether it’s a friend or family member who knows a thing or two about finance, a certified financial advisor, a debt expert, or an investing coach—for every step along your financial journey you can get help and guidance. Getting advice from others and improving your financial situation together might give you a sense of relief and peace, which can significantly reduce the amount of stress you’re experiencing right now.  

#6 – Challenge Your mindset Around Money 

If we go back to what drives financial stress, one of the main drivers of financial stress is excessively worrying about money. The mindset you have around money may act as oil on the fire — if you often feel stressed whenever you think about money, there’s a high chance that you have negative associations with money. If we dive a little deeper into this, why is that the case? And why can’t it be positive?  

Because, you know, it can be positive, too! The great thing is that it’s truly all up to you. What you can do about that is view money as a tool. Because in the end, money is there for you to use and help you. You can use it to buy food, shelter, go on trips, and buy clothes. It enables you to live the life you want; it’s not here to harm you. Money is there to help you live life on your terms, not restrict you in any way, shape, or form. If you try to remember that whenever a negative thought around money pops up, some of those negative thoughts may dissipate quickly and come up a little less often in the future. 

Improve Your Overall Well-Being by Better Managing Financial Stress 

As May is Mental Health Awareness Month, we wanted to use this opportunity to give you a few powerful tools to better manage the financial stress you might be experiencing. Together, we’ve gone over six different techniques, each addressing one of the common drivers of financial stress. To combat not feeling in control of your finances, you can get crystal clear on where you stand financially, create a budget, pay off any high interest you might have, and build an emergency fund.  

To add to that, remember that it’s okay to ask for help. Even the greats of this world get guidance from others, so why can’t you? Last but not least, by thinking about money positively—as something that can help you live life on your terms—you might reduce the amount of negative thoughts you may have around money.  

We sincerely hope these techniques aid you in your journey to both reduce and better manage the financial stress you might be experiencing. As your financial health, mental health, and overall well-being are intricately linked, improving your finances and financial stress management skills can greatly improve your overall well-being. That’s what we hope it can do for you, too. Good luck on your financial journey! 



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