Financial Stress Relief Strategies To Cope With Debt And Care For Your Mental Health

Financial stress is a common struggle for people from all walks of life. Whether from debt, unexpected expenses, or job loss, financial worries can affect us psychologically, physically, and socially. While money-related stress can seem overwhelming, there are effective strategies that can help individuals regain a sense of financial control and build long-term stability. This post explores how and why finances are a significant source of distress for many and what we can do to improve our mental and financial health. 

Understanding financial stress  

Financial stress generally refers to the emotional and physical strain caused by money-related concerns. It arises when people struggle to pay bills, afford day-to-day expenses, or save money for emergencies or retirement. The statistics around stress and money in America are telling. Researchers estimate roughly 77% of Americans experience anxiety about their finances, and 58% believe that money controls their lives. 

Financial hardship can also have a cyclical effect. For example, individuals experiencing such stress might lack the energy or concentration to handle their budget or other financial responsibilities. In some cases, individuals may be more likely to spend money to cope with stress, putting themselves further into debt. 

Psychological symptoms associated with money challenges

People may show various symptoms when experiencing stress, including money-related stress. For example, some may have sleep problems or cognitive signs of stress, such as trouble concentrating and memory issues. People might experience low self-esteem, guilt, or shame. Depressive symptoms like a low mood, hopelessness, and despair may result from financial struggles as well. 

Studies also suggest that people with problem debt (debt that people are unable to make payments on) are “three times as likely to have thought about suicide.” While anxiety, depression, burnout, and low self-esteem are linked to money worries, so are some people's relationships with and attitudes toward money. Unhealthy attitudes towards money may include (but aren't limited to) the following:

• Seeking validation from others through money
• Tying self-worth to how much money one has
• Thinking one doesn’t deserve to have or spend money
• Thinking money can solve all problems
• Using money to control or manipulate others
• Being secretive or mistrustful of others about money

The unique relationship between debt (including from credit cards) and stress

How one responds to debt often depends on the personal meaning they assign to it. For example, although updated evidence may be needed, a 2011 study found that some young adults associate debt with positive concepts like self-mastery and greater self-esteem when it is used strategically to live more comfortably or for self-betterment, such as paying for higher education with student loans. For others, debt signifies financial obligation that causes distress and can harm one's self-concept. 

Researchers examining how debt and stress interact coined the term “debt stress syndrome” to describe how debt can differ from other economic stressors. They found that debt tends to be more common among people with higher incomes. At the same time, economic hardships associated with the cost of living and job disparity are usually more common among people in lower income brackets. 

Not only do studies show a link between debt and socioeconomic advantage, but they also suggest a relational aspect. Owing a debt to another often implies obligation and dependence, particularly when the debt is owed to someone with whom one has a personal relationship. This can create an imbalance of power between the debtor and debtee that can undermine mental health.

Impulse spending as a contributor to financial stress

In the modern world, impulse spending can be hard to resist. Social media readily exposes users to targeted advertisements, influencer marketing, and a constant stream of desirable products. This often leads to unplanned purchases based on the perceived social appeal or urgency created by the platform, with many users regretting these impulsive buys later. 

While it isn’t recognized as an official mental health condition, researchers have coined the term “compulsive buying disorder” or CBD, which is typically characterized by “excessive shopping cognitions and buying behavior that leads to distress or impairment.” People with CBD may have a shopping preoccupation, experience tension or anxiety before purchases, and experience relief or catharsis following the purchase. The disorder is “associated with significant psychiatric comorbidity, particularly mood and anxiety disorders, substance use disorders, eating disorders, and other disorders of impulse control.” 

Financial stress and physical health

Like many other types of stress, financial stress can lead to physical health issues. People experiencing stress might have headaches and migraines or digestive problems like stomach cramps, bloating, and irritable bowel syndrome (IBS). Chronic stress can contribute to persistent muscle tension and pain, insomnia, poor-quality sleep, or high blood pressure. 

Financial stress and social health

Financial stress and social well-being sometimes share a bi-directional relationship. For example, pressures from social media comparisons and "keeping up" with peers can influence people to misspend or put themselves in debt, leading to financial stress. Individuals with money troubles may experience symptoms like shame, anxiety, fear, or despair, causing them to withdraw from social activities and relationships. Social isolation can lead to feelings of loneliness and depression, which can make it harder to manage financial issues. 

Credit card debt and other common financial challenges 

Not everyone experiences financial stress. However, many share common financial challenges that can lead to psychological distress. Typical financial factors that may contribute to mental health issues include the following: 

• Debt, particularly high-interest debt
• Job loss, especially for those who don’t have savings
• Unexpected expenses like medical bills, car trouble, or home repairs 
• Low income 
• Lifestyle choices like living beyond one's means or poor budgeting
• Significant life events like divorce or the death of a loved one
• Failed investments or business ventures

Practical methods to boost your financial wellbeing  

Financial education is the foundation for financial wellness. Understanding how to manage your money and make wise financial choices can give you a sense of security and control over your finances. You can learn financial planning and money management basics through online courses, books, and podcasts, many of which are free. 

Create a budget

Effective money management requires being mindful of how you spend. Creating a structured monthly budget in which you track your income and monthly expenses can facilitate more mindful spending and help you stay on track. Many budgeting apps and downloadable tools are available online, designed with different financial needs and goals in mind. 

Save money for an emergency fund and unexpected expenses

Having a financial cushion can provide significant peace of mind. Once you’ve developed a budget, set a small, realistic savings goal, such as saving for one month of expenses. Open a separate savings account for emergency funds to avoid cross-spending and automate transfers from your paycheck into that account. Once you've become comfortable with that amount, you might ramp up your emergency fund donations. You might also consider putting any extra money you receive, such as a tax refund, into your emergency fund. 

Managing credit card and other debt effectively

Plan to pay more than the minimum monthly payment. Most credit card companies include a chart showing how long it will take you to pay off your card, depending on how much you spend and pay off. Reach out to your creditors; they might be open to negotiating better terms or lower interest rates. Research debt payment methods like the snowball and avalanche methods to decide which strategy suits you best. 

Seek professional help for handling credit cards, savings, and more

If you feel overwhelmed and unsure where to begin, consider contacting a financial planner or credit counselor for help. An expert can help you create and stick to a financial plan, including setting a budget, savings goals, and investment strategies. Some nonprofit organizations offer free financial advice or sliding-scale fees based on a client’s income to make their services more affordable. 

Strategies for boosting your mental health

Since money and mental health are often closely intertwined, consider integrating a self-care plan with a solid financial plan. Caring for your mental health can help you remain resilient in the face of challenges and establish a healthier relationship with money and spending. 

Reframe your mindset about financial stress

With the right attitude, you may see financial challenges as opportunities for growth. Reframing how you think about debt, stress, and money can also help you become more comfortable discussing money and mental health. This shift may eliminate potential self-judgment and cultivate the courage to reach out for support when you need it. 

Stress management techniques 

Self-care can be integral to better mental health. Prioritize your physical health by eating well, getting adequate sleep, and exercising regularly. Try meditation or mindfulness exercises to reduce anxiety. Some find it helpful to journal their thoughts and feelings and track and celebrate financial wins. 

Mental health resources 

Many online support groups and forums are geared toward helping people cope with financial stress. Research also shows that individual therapy, particularly cognitive behavioral therapy (CBT), can be highly beneficial for people with financial stress. For example, a 2022 study tracked the mental health of individuals participating in an internet-delivered CBT program designed for financial stress. The researchers found "statistically significant improvements in symptoms of depression, anxiety, and improved perceived financial wellbeing” four to eight weeks after treatment, with a vast majority of participants positively rating their treatment experience. 

Despite its efficacy, some people don’t seek therapy. People experiencing financial challenges might assume they can’t afford it, or stigma about financial distress and mental health can deter people from getting the help they deserve. Telehealth can provide an excellent solution to such barriers. Some online therapy platforms, including BetterHelp, offer qualifying individuals financial assistance or sliding-scale fees. Additionally, many people feel more comfortable talking to a therapist about sensitive issues like finances from the comfort of home rather than in an office setting. 

Takeaway

Learning to budget, save, and spend mindfully can provide a sense of empowerment and encourage you to implement your own plan for economic stability. While financial stability can help you find some peace of mind, mental health isn’t always so straightforward. If money-related stress is overwhelming, consider speaking with a mental health professional who can help you reframe your perspective and learn to cope with financial stress. With support, you can cultivate a healthier relationship with money and pave the way for a brighter financial situation.