Is Money Heavy on Your Mind? Here’s How to Cope With Financial Stress

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Are you struggling to cope with financial stress? Finances are a source of stress for many people, especially during times of crisis.

The pandemic, a stock market crash, inflation and climbing interest rates have left many Americans with additional financial stress in 2023. If you have found yourself ruminating on your bills and lamenting the size of your paycheck, you aren’t alone.

TELUS Health, a health technology service, recently released a special report on the connection between financial well-being and mental health. The report reveals that one-third of workers do not feel financially confident about the coming decade. In February, the US Mental Health Index score was 69.8 points out of 100, mirroring the Financial Wellbeing Index score of just 66.7 points out of 100.

Minimizing your own stress levels may seem daunting — and like potentially yet another expense. But we’re here with ways to de-stress without emptying your wallet.

How to Cope With Financial Stress

Because finances significantly impact our well-being, it’s important to learn how to cope with financial stress and boost your financial literacy. Even if your paycheck is not particularly juicy, you can still do plenty of things to improve your financial situation without additional stress. Here are five tips to help you cope with financial stress and maximize your paycheck.

1. Find Mental Health Help if You Need It

According to the TELUS Health report, as many as 40% of workers feel overwhelmed by debt, while another 12% expect financial struggles in the near future. This can weigh very heavily on an individual’s psyche since money is required for the essentials in life: Rent, food and transportation. The stress level is heightened even more for single parents, heads of household and those with high debt balances.

Paula Allen, TELUS Health’s global leader of business and client insights, reported:

“This month, we saw the largest decline in mental health scores since April 2020. Many signs point to the rise in inflation as the main reason for this drop, given we know how important a sense of personal control is to mental health and well-being. The economic changes, on top of existing challenges we’ve been facing over the past three years, have put more than 65 percent of American workers at high or moderate mental health risk.”

If you’re struggling, find mental health help. If your workplace doesn’t offer mental health benefits, seek out free community resources. You can also check out, a confidential resource for those seeking treatment for mental health and substance use disorders in the US. They have resources to help you understand mental health and addiction, find treatment, and discover payment options that work for you.

2. Start an Emergency Fund

What would happen in the event of a car accident, layoff or medical emergency? Would you have enough money saved to cover the bill? If you’re like most Americans, you probably won’t have any money to spare in an emergency. In fact, 69% can only save 10% or less of their annual income, while 12% aren’t saving at all.

An emergency fund can help reduce the stress of “what if.” Those with an emergency savings account experience a mental health score six points higher than the national average. Without one, mental health scores plummet nearly 20 points below average.

It might seem impossible to save up for an emergency, but putting aside a small amount each paycheck adds up over time. Start small by saving $10, $20 or $50 in an emergency savings account and leave it alone. Soon enough, you will have a small nest egg to give you some security in case the worst happens.

Don't know where to start with savings? Here are
six step-by-step ways to save big every month.

3. Automate Your Savings

A great way to make saving easier is to automate your savings. Instead of moving money between accounts each time you get paid, remove the friction and let your bank account do the heavy lifting for you. An automatic savings plan can be valuable financial support because you never have to think about it.

If you struggle with accepting that you need to start an emergency fund, then automating your savings can be a helpful way to remove stress around saving so that you can sit back and let your savings account grow. It’s a great solution for those who want to steadily build up their savings without needing manual deposits, extra budgeting, and other stress-inducing activities.

And while the recent Federal rate increases are bad news for borrowers, the increases are great news for savers. Savings account interest rates are as high as 5% right now, the highest since the Great Recession of 2008.

4. Start Putting a Dent in Your Debt 

Debt is a major source of financial stress for many. In fact, some express that they feel like they will never get out of debt. While wages have seen around a 6% increase in the UK and the US, the average household debt has increased by 7% from 2021 to 2022. Mortgages, credit card debt, student loans, car loans, and more all threaten our mental health and well-being when it starts to cause financial stress for borrowers.

How do you get out of it? Start putting a dent in your debt now.

Start by prioritizing your debts and deciding which ones you want to pay off first. The snowball and the avalanche method are two of the most popular ways of doing this. The snowball method is where you start by paying off your smallest debt first, then the next smallest, and so on. Not only does this give you the gratification of seeing your debts removed from your credit, but it can also help boost your saving self-confidence.

Another method is the avalanche method. Start by paying off debts with the highest interest rates first so that your balances grow at a slower rate. This is helpful because it can help you save even more money in interest charges as time goes on.

5. Keep an Eye on Your Work-Life Balance

Finally, one of the best ways to cope with financial stress is to monitor your work-life balance. Workers with the highest levels of work-life balance enjoy about 3 or 4 hours of leisure time daily, while those with the lowest scores report having 2 hours or less to themselves.

Try to carve out time for yourself by setting reasonable boundaries between you and your employer. Here are some other ways to look out for your work-life balance and improve your mental health:

  • Don’t strive for perfection; strive for your best.
  • Put the phone down and step away from the computer after a certain time each day.
  • Limit time-wasting activities like doom scrolling or spending time with people who require too much of your energy.
  • Incorporate activities like exercise and meditation to blow off some steam.

Final Thoughts

If your budget is causing you stress, then it’s time to take control. Find mental health help if needed, starting an emergency fund, automating your savings, and paying off your debts to put your mind at ease and get your finances in order. Don’t forget to look out for your work-life balance, and take time to relax, unwind, and let go of financial stressors.

New York contributor Kiara Taylor specializes in financial literacy and financial technology subjects. She is a corporate financial analyst who also leads a group affiliated with University of Cincinnati that teaches financial literacy to Black students and helps them secure employment and internships.