How To Manage Financial Stress And Uncertainty

Financial stress is a growing concern for millions of Americans. Financial stressors can be challenging to mitigate with the inundation of debt repayments, rising cost of living, as well as lack of money saved. Financial stressors may seem challenging to mitigate, thus resulting in the development of mental health concerns. Despite these concerns, managing financial stress is a possibility for many. This article explores what contributes to financial stress, current financial health statistics in America, as well as what you can do to regain control of your finances and mental health. 

You are more than your money

Reduce financial stress with an online therapist

What causes financial stress? 

Financial stress involves more than monetary concerns about paying for certain bills or general purchases. It involves ongoing feelings of uncertainty surrounding one’s financial situation. 

Ongoing financial stress arises for numerous reasons. Some experience challenges with insurmountable credit card debt, while others may face strain from unemployment, job losses, or inabilities to work due to disability or illness. Further, many individuals experience challenges affording their monthly expenses, such as their basic needs for either food or housing. 

Individuals who find they are paying their bills accordingly can also be at risk of continuous financial stress. For instance, sudden or unexpected expenses brought about by inopportune circumstances (such as a necessary home repair) have the ability to disrupt even the most thoughtful financial planning. 

Despite these stressors, it’s integral to consider that you’re not alone. There are many ways that individuals can improve upon their financially precarious situations. 

Understanding economic uncertainty

While there are some areas that one can control surrounding their financial state, there are some that are out of one’s control, such as the economic status of the nation. Current financial fears in America are often rooted in economic instability, inflation, as well as lingering effects of global events like COVID-19. Further, inflation has driven up prices for essentials like groceries, housing, and energy. 

For families living paycheck to paycheck, significant strain can be faced when considering trade-offs between necessities. Furthermore, aspects such as housing market trends can make home ownership cumbersome or unattainable for some families. Studies indicate that many Americans’ report sleeplessness, strained relational dynamics, as well as a sense of hopelessness.  

Despite some of these concerns, having an understanding of these fears can be a first step toward addressing them. Taking the time to acknowledge systemic and personal factors contributing to financial stress can allow individuals to explore strategies in efforts to build resiliency. 

Financial health in America

The financial health of Americans has been a growing concern. Despite individuals’ best efforts, studies indicate that nearly half of Americans report that their financial situation negatively impacts their mental health. This can produce strain in relation to effective decision making and overall problem-solving, as well as difficulties in asking for help. 

Financial stress statistics

Financial stress is a widespread issue affecting millions of Americans. The following statistics come from a 2024 Bankrate survey and provide more insight into the scale and severity of financial insecurity in the United States: 

1. 47% of U.S. adults report that money adversely impacts their mental health 
2. 59% of Americans cite difficulty paying for everyday expenses as a major source of financial stress
3. 27% of U.S. adults have no emergency savings, leaving them vulnerable to unexpected expenses
4. 53% of low-income households (earning less than $50,000 annually) worry about their financial situation

The link between money, credit cards, debt and stress

Credit card debt is a leading contributor to financial stress of many Americans. U.S. credit card debt reached a record high of $1.17 trillion in 2024. This contributed to numerous households being unable to make minimum payments. High-interest rates and recurrent balances can contribute to stress, making it cumbersome to focus on long-term financial goals such as emergency funding or retirement savings. 

Managing money and mental health

Managing money and mental health may present its challenges, however, working alongside a professional, while also researching effective strategies for financial wellness can be key. While we cannot control every aspect of our finances, focusing on budgeting, balancing savings and checking accounts, as well as growing your income can mitigate some stressors in relation to financial uneasiness. 

Creating a budget to reduce stress

A structured budget is key in relation to gaining control of your financial state, as well as establishing effective boundaries surrounding your money and spending habits. By tracking income and expenses, you are better able to track where you can spend less, save money, as well as allocate funds towards an emergency fund. This sense of agency can significantly reduce money concerns and correlate with improvements in mental health. 

The role of credit cards in financial stress

Credit card usage can contribute both to financial convenience, as well as a potential source of financial stress if not managed properly. While they offer flexibility, high-interest rates paired with temptations to overspend can lead to financially precarious situations. Learning effective ways to use credit cards responsibility can mitigate some of these potential risks. 

Strategies that can assist with credit-card responsibility include researching no-interest balance transfer options. This can assist with managing debt by reducing interest for a certain period of time. Furthermore, you can consider ways to make your current credit cards work in your favor. Many credit cards offer spending rewards or certain incentives. 

Building healthy financial habits

Building healthy financial habits contributes to an essential foundation of financial wellness. Strategies that can assist with this include setting aside portions of each paycheck to allocate to savings or debt repayment. Additionally, taking some time to reflect on certain spending habits can be useful to create certain financial goals. These behavior modifications could include purchasing more cost-effective brands. 

Focusing on little changes incrementally can lead to long-term financial stability, as well as the potential to reduce the burdens of financial strain. 

Prioritizing mental health while managing money

While improvements in financial literacy are encouraged, it’s important to prioritize mental health and physical health. Allowing yourself to meet your needs in a meaningful way can assist with mental health maintenance as you traverse your financial journey. For example, this may include purchasing nutritious groceries, paying for medication, or even accessing mental health services like therapy. Seeking support from a financial advisor or therapist can also provide guidance, thus reducing feelings of isolation and stress. 

More practical tips to improve financial health

Improving financial health starts with small, actionable steps, including some of the following steps: 

1. Create a Monthly Budget: Track your income and expenses to understand where your money is going. Allocate funds for essentials, savings, and discretionary spending.
2. Build an Emergency Fund: Aim to save 3-6 months’ worth of living expenses in a savings account to cover unexpected expenses like medical bills or car repairs.
3. Pay Down High-Interest Debt: Focus on paying off credit card balances and other high-interest loans to reduce financial stress and save on interest payments.
4. Automate Savings: Set up automatic transfers to a savings account each payday to ensure you consistently save money.
5. Cut Unnecessary Expenses: Review your spending habits and eliminate non-essential purchases, such as subscription services or dining out frequently.
6. Seek Free Financial Advice: Use online resources, community programs, or nonprofit organizations to get guidance on budgeting, debt repayment, and financial planning.
7. Set Financial Goals: Define short-term and long-term goals, such as saving for a vacation, buying a home, or retiring comfortably, and create a plan to achieve them.
8. Avoid Lifestyle Inflation: As your income increases, resist the urge to spend more. Instead, allocate extra funds toward savings or debt repayment.
9. Monitor Your Credit Score: Regularly check your credit report and take steps to improve your score, which can help you secure better interest rates on loans.
10. Invest in Your Future: Contribute to retirement accounts like a 401(k) or IRA to ensure long-term financial stability.

How therapy can help financial stress

Therapy can be an integral tool for addressing the emotional tolls associated with financial stress. Working alongside a mental health professional can assist individuals by developing coping strategies, challenging negative thought patterns, as well as building resiliency in the face of financial adversities. 

You are more than your money

Reduce financial stress with an online therapist

The benefits of online therapy

Online therapy services like BetterHelp offer affordable and accessible treatment options for people facing financial stressors. Online therapy can provide flexible scheduling options and visit modalities such as video, phone, or live chat. Research indicates that online therapy can be just as effective as in-person therapy for the treatment of anxiety, depression, as well as stress-related disorders. 

Takeaway

Financial stress is a widespread concern that can produce adverse impacts on both mental and physical health. Despite this being the case, taking proactive steps to reduce financial stressors like budgeting, seeking professional assistance, as well as approaching your financial situation with empathy, allows you to regain control of your financial state. This can result in reductions of stress, navigating financial uncertainty, as well as improvements in your overall well-being.