Morgan Stanley
  • Wealth Management
  • Dec 10, 2021

Make Financial Stress Last Year’s News: 4 Steps to a Calmer You in 2022

Wrap up the year and face the new one armed with strategies to help you mitigate money-related stress—both its physical effects and its root causes.

The holiday season can be a joyful time filled with good food, good people, and good cheer. But let’s be honest—it can also be pretty stressful. While that’s always been the case, many of us are feeling especially tense as we grapple with the ongoing effects of the pandemic.

On top of the already high demands on our paychecks—from monthly bills to medical costs—end-of-year expenses like gifts and travel can really pile up. And with all of these financial demands comes financial stress, or anxiety around meeting your obligations and the way your body reacts to it.

In reality, money worries are never just about money. Stress can take a toll on our health, relationships, and performance at work. Fortunately, there’s more awareness around financial stress than ever before—and more being done to combat it. Not to mention, the turning over of a new year offers the promise of a fresh start. Here are some strategies for reducing your financial stress, and what’s causing it, as you embark on the year ahead. 

1. Work on the Physical Effects

When we’re stressed, we often turn to unhealthy coping mechanisms, like overeating or drinking. These temptations can be even more pronounced when there’s a whole turkey and a carton of eggnog in the fridge! Though they might offer some relief in the moment, indulgent behaviors often lead to other problems that only compound our stress in the long term.

There are plenty of healthy ways to deal with the physical aspects of stress. For example, keeping a journal can help you work through your feelings and pinpoint specific triggers. Exercising regularly—whether it’s yoga, cardio, or taking a walk to see the department store window displays—can help you turn stress into more positive energy and improve your physical and mental well-being alike.

Many workplaces also offer benefits related to wellness, like gym discounts and reimbursements or free workout classes. If these offerings are available to you, taking advantage of them can help reduce both your stress and your expenses.

2. Get Your Financial House in Order

The key to reducing your financial stress over the long term will be to address its root causes. The first step is to understand what you’re working with. Start by making a list of all your financial accounts, other assets, sources of income, and debts. Next, build a budget so you have a full accounting of where your money is flowing each month. Be sure to build in some wiggle room for high-spend times of the year, like the winter holidays and wedding season. When you can see all of this clearly, you can look for areas where you might be overspending on non-essentials and redirect that money towards looming bills and debt payments.

Fear of the unknown can also stress you out, and 2020 and 2021 have been chock full of uncertainty. We understand better than ever that unexpected costs are a fact of life—and one of the best ways to soften the blow and build confidence is to create a financial cushion well before you need it. An emergency fund should be able to cover at least three to six months’ worth of living expenses, but you may want to aim for a higher target if you have children or other loved ones in your care, work in a particularly vulnerable industry, or have health concerns.

Planning for your financial future is one more way to assert control over your situation. Specifically, making sure you have a plan in place for retirement—even if it’s decades away—can reduce some of the fear of running out of savings in your golden years. Starting early and saving little by little throughout your career can make the process more manageable all along the way. 

3. Start an Open Dialogue with Those Who Matter Most

Far too often, financial matters are a source of conflict between partners as well as between parents and children. In other families, money is considered too taboo to talk about at all.

No matter your situation, it’s essential to start an open and honest chat about money with the people you love. Ignoring problems rarely makes them go away, while speaking freely can get family members aligned on spending, saving, and the family’s future financial plans. Whether you’re gathered virtually or in person this year, it might make sense to schedule a designated huddle on money matters.

4. Don’t Go It Alone

If you’re stressed about your finances, especially towards the end of the year, realize you’re not alone. Of those Americans who have reported negative feelings around the holidays, more than half cite concerns about their finances.1

You are not alone in the fight against financial stress either. Medical and mental health care professionals can work with you on strategies to alleviate the physical and emotional side effects of stress, and counselors can help mediate money-related conflicts among you and your loved ones.

Moreover, many employers are now providing financial wellness programs to help their employees feel more in control of their financial lives. These vary from workplace to workplace, but popular features include digital education portals, access to financial planning and coaching, and virtual or in-person education seminars.

The Bottom Line

Financial stress, like any other kind, can ebb and flow throughout the year—and alleviating or eliminating it doesn’t happen overnight. Take one step at a time by, for example, replacing one coping mechanism with a healthier behavior, completing one quick financial task like making an on-time debt payment, or reading a few more articles about a financial topic that is unfamiliar to you. Using these methods, you can begin to turn some of your financial stress into financial confidence as you head into a new year and beyond.