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Financial Stress and Mental Health: 6 Tips for Managing Both!

I’ve noticed many of my clients this year express stress around their finances, and with the potential of a recession hitting us that stress may worsen. Based on Maslow’s Hierarchy of Needs Theory, threats to our financial wellbeing may be perceived (or even actual) threats to our own sense of security and safety. Below are some tips for coping with financial stress and alleviating its impact on mental health.

1) Take note of your stress

This includes both the symptoms and the triggers. Similar to anxiety, you might be experiencing issues such as difficulty with breathing, concentration, worry thoughts, or managing your emotions. Feelings such as shame or anxiety might lead you to do things such as avoid your financial situation, isolate yourself from your support system, or neglect your health.

If you notice significant signs of stress that are impacting your physical health, it might help to schedule a checkup with your primary care physician.

2) Take anywhere from 2 to 15 minutes to practice a coping skill

Coping skills are in no way meant to get rid of financial stressors. They merely put you in a position where you are better able to manage your stress, and then determine how you wish to respond to the situation. I encourage you to practice these daily. Some things to try out might include:

  • Taking a few deep breaths

  • Drinking a glass of water

  • Making a cup of caffeine-free tea

  • Going for a walk outside

  • Eat a nourishing snack

  • Listen to a mindfulness app

3) Take stock of what is important to you

Ask yourself what you value most in life. Is it your family? Your career? Your health? I sometimes ask my clients to consider their eulogy (not in a dark way, I promise!). If you were to die tomorrow, how would you be remembered? Are you living your life in alignment with your values? Might that need to change?

As cliche as it sounds, practicing gratitude can also improve our attitude about whatever is stressing us out. Stress in general can lead us to feel out of control of our time, energy, or circumstances. Remind yourself of what you already have. A lot of these things may have nothing to do with money.

4) Develop your treatment plan

Treat your financial stress like a health issue. Like any health issue that you might seek treatment for, it helps to have a treatment plan in place. Identify your “diagnosis” or problem to focus on, what your goals are, your measurable objectives, and action steps.

For example, let’s say that my problem is managing overwhelming debt, and it’s impacting my ability to sleep, focus at work, or have fun with friends. My obvious goal would be to get out (and stay out) of debt. Some sample steps might be:

  • I will track my income and expenses for the next 30 days in a spreadsheet. I will develop a budget and review it every Sunday.

  • I will cut back or eliminate at least 3 expenses this month. I will set aside $25 a week into an emergency fund until I reach $1,000.

  • I will ask about promotion opportunities at work. I will apply to 3-5 higher-paying jobs within the next 6 weeks.

  • I will identify cheap or low-cost alternatives for hangouts with friends, such as hosting a potluck at home on the weekends.

  • I will listen to a mindfulness meditation app before calling a creditor.

5) Get help

The form of the help you seek is very personal, and will depend on your comfort level, your finances, the resources available to you, and how pressing your circumstances may be. Some suggestions to consider:

  • Check out books from the library on financial literacy, such as Financial Recovery by Karen McCall.

  • Recruit help from friends or family members. This can help reduce isolation and boost accountability.

  • Ask your boss about additional work opportunities, such as extra shifts, raises, or promotions.

  • Seek help from a therapist.

  • Seek help from a financial counselor.

6) Remind yourself that this will take time

Try to go easy on yourself by reminding yourself that it took a long time for you to get to where you are now. It will take time to learn healthier habits and unlearn old ones. Many of us were not taught basic life skills such as how to manage our stress or our finances. These issues will not be resolved in one day.

Feelings of discouragement may come up, especially as stressors come up like a higher-than-normal bill or an unexpected emergency expense. Remind yourself that you’re building these life skills because these stressors are bound to come up. Consider how the most mindful version of yourself would respond, and follow through.

Do you have any tips on managing financial stress? Feel free to share!

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