Understanding the Effects of Financial Stress

With all the pressures of modern life—trying to balance career, family, social obligations and more—most of us experience stress from time to time. Frequently, this worry is related to our finances. According to a study by the American Psychological Association, nearly two-thirds of adults say that money is a source of stress.¹

When stress becomes chronic, persisting for weeks or months, it can be more than a nuisance—it can potentially lead to health problems. Let’s go over some of the ways financial stress can affect your well-being and then discuss ways to help manage it.

The Potential Effects of Financial Stress

Inability to sleep: A Bankrate study found that more than half of Americans over 18 have lost sleep because of their financial anxiety. And nearly one-third of those are primarily concerned about everyday expenses. ² Debt is also a major financial concern, and a National Debt Relief survey found that, on average, people lose more than 200 hours of sleep per year due to their debts.³

A lack of sleep can lead to some obvious troubles, like fatigue and moodiness. But it can also lead to impaired memory, relationship strain, reduced participation in daily activities or exercise, and even greater risk for car accidents.⁴

Respiratory problems: Stress might cause shortness of breath, which could exacerbate issues for people who already have respiratory-related conditions, such as asthma or emphysema.⁵ Stressful events related to money could also cause panic attacks.

High blood pressure: Research suggests there could be a tie between chronic stress and blood pressure elevation. In response to stress, your heart rate is elevated and your blood pressure may spike. Chronic stress could potentially lead to a narrowing of the blood vessels and increased blood clotting, which can mean a higher risk of a heart attack or stroke.⁵

Weakened immune system: Chronic stress can impact your immune system, as stress hormones cause inflammation. While inflammation can be a way for the body to heal itself by increasing blood flow to the affected area, chronic inflammation can make you more vulnerable to infection and illness.⁵

Ways to Manage Financial Stress

There’s a two-pronged approach to managing financial stress: address the symptoms and deal with the underlying cause. Here are some steps to consider.

See your doctor: If you are experiencing financial stress and any of its physical symptoms, it may be beneficial to seek medical guidance. A doctor can provide a treatment plan targeted to your specific needs.

Speak with a therapist: Consider opening up to a professional about your stressors and their impact on your mental health. A therapist or counselor may be able to suggest tools and exercises that help you better manage day to day.

Turn off your electronics an hour before bed: Looking at a TV, computer or smartphone right before bed could affect your ability to both fall asleep and sleep soundly, only compounding the sleep-interrupting effects of financial stress. Consider reading a book or enjoying other screen-free activities, which can help you wake up rested and may improve your mood.

Spend time outside: Enjoy the fresh air when you can. Whether you’re walking, running, hiking or playing a sport, you can move your body, clear your mind and get your endorphins flowing.

Try meditation or exercise: Practicing deep breathing techniques, meditation or yoga could help lower stress levels. Getting regular exercise might also help you relieve tension.

Build a budget: A lot of financial stress comes from feeling out of control of your situation. A budget can act like an anchor in your overall financial strategy. Take the time to look at your inflows and outflows, then assign reasonable spending targets across needs, wants, and savings and investments.

Take one small financial action: Having a healthy relationship to your finances may not happen overnight. So why not start with one small step at a time? Perhaps you can make one extra payment on an outstanding debt to help pay it down sooner. Or maybe you can increase your 401(k) contribution by a percentage point or two. Make a list of these actions and feel some of your stress dissipate as you check them off.

Work with a financial professional: Managing your finances is a tall order, and it isn’t something you need to figure out all on your own. A Financial Advisor can review your financial situation and help you develop a strategy to meet your short- and long-term goals.