Yes, Financial Stress Can Impact Your Mental Health — Here’s How to Cope with Money Anxiety

By Mara Santilli

Your biweekly paycheck doesn’t come until next week, but your credit card debt has been racking up from the few unexpected trips you had to take this year to visit family or hop on a plane for a friend’s wedding. Or maybe you were laid off recently, still haven’t landed a new job yet, and have young children to take care of.

With thousands of layoffs and the remnants of inflated prices affecting people in a very real way, some people might have hit a financial rough patch these past couple of years since the COVID-19 pandemic started. Others seem to be caught in a longer, more constant spiral of financial stress, that is impacting their mental health in the long run.

For some, not only just living in poverty, but having debt hanging over their head, or any other kind of financial stress, tends to the be number one stressor people report; it can exacerbate psychological distress, which includes anxiety, insomnia, depression, and the list goes on, according to research published in 2023.

But ultimately why does money have the ability to affect people in such a way, and impact their mental health? Find out more from resident financial and mental wellness expert Dr. Regine Muradian, PsyD, clinical psychologist and National Debt Relief Financial Wellness Board member, and keep on scrolling for how to cope with mental health issues that stem from financial stress.

How money issues can impact your mental health

It can make you feel inadequate as a person.

Having less than enough money can contribute to a feeling of, well, not being enough as a person. Feelings of inadequacy may creep in if you aren’t able to provide for your family, or if you just feel like you let yourself down on a personal level with your finances. “I didn’t budget properly, spend properly, [might be thoughts you have], and you go into this cycle,” says Muradian.

You may feel a loss of control over your life.

A lot of anxiety stems from feeling uncertain or that you’re out of control of your present or future. “Feeling a loss of control —how am I going to make ends meet— exacerbates the feelings of inadequacy,” says Muradian. The thoughts and worries about the future, as in keeping your home, paying your rent, and taking care of bills, can add to the intensity of the money anxiety.

Financial infidelity with a partner can lead to trust issues.

Conflicts over money can lead to issues with your relationship, and therefore more stress, in some cases. “Financial infidelity in married or committed couples occurs when one partner hides finances or hides something from the other partner, or is not very truthful or honest with their intentions,” says Muradian. “I’ve seen cases where once after they’re married they want to buy an investment property, and the other spouse is removed from that.” The inability to fully trust a partner could make you feel vulnerable, anxious, or even contribute to depression in some cases.

It can mess with your sleep and sense of balance.

One symptom of psychological distress as a result of money anxiety could be insomnia – the thoughts about paying your bills and paying off debt may keep you awake at night. And research states that these financial anxiety symptoms , including lack of sleep, can lead to emotional exhaustion and poor immune health, too. It is not uncommon to experience nightmares about your finances, too.

How to make a plan to turn things around, mentally and financially

Engage in positive self-talk around your finances.

Instead of ruminating on negative energy and perpetuating a narrative that you as a person are not enough because you’re strapped for cash right now, accept the reality, that things are difficult financially at the moment, and speak kindly to yourself. You can kick off your morning by telling yourself, “Yes, everything is overwhelming, but here’s what I can do for myself today,” or “I’m going to have a great morning today,” suggests Muradian. You don’t want to create more stressors in your day that may affect your health.

Set up an emergency savings, especially for medical emergencies.

One of the major causes of financial stress is unforeseen medical bills, says Muradian. If you can create or work toward creating a small safety net for any medical emergencies, so that you don’t have to put off or refuse medical care because of the cost, if that time comes. This might contribute to less financial stress, which can contribute to more medical issues, in a never-ending cycle, according to Muradian.

Strengthen your communication with your partner about finances.

A healthy relationship involves trust, communication, and loyalty, according to Muradian. “If any of these three are broken, it’s very hard to repair,” she says. That’s why it’s so important – of course everybody makes mistakes – but there needs to be constant communication, not hiding things, and being open with each other. Even if you’re embarrassed by your own spending habits, and feel like spending rather than saving is a behavior rooted in addiction, it’s important to come to your partner from a place of vulnerability to work the situation out together, rather than hiding it.  

Recognize what you’re feeling and introduce self-care and gratitude.

You should acknowledge how financial stress is affecting you, whether it’s anxiety, insomnia, etc., and respond to those feelings with self-care. It could be as simple as taking a warm shower, making a cup of tea, of creating five minutes of mindfulness when you wake up, says Muradian. That can look like focusing on a short gratitude practice. What is one thing you are grateful for, or what do you have in your life, including the very basics? This exercise can help you stay grounded mentally during times of financial distress.  

Reframe your overall mindset.

It is easy to feel overwhelmed by a mountain of debt, but Muradian recommends pivoting to a solutions-focused mindset.  “It’s really about taking things one day at a time. Solutions are available, and you have a choice to get stuck in your debt, or lift your head up, the equivalent of looking in front of you rather than in the rearview mirror,” says Muradian. It’s similar to trying to clean a whole house or even a whole cluttered room all at once, starting one section at a time, one month at a time, to chip away at the larger number of debt. Not looking at the mountain of debt and instead taking payments on one bit at a time is a way to keep yourself more realistic and potentially relieve you of some of that money anxiety.


This article was written by Mara Santilli from SheKnows and was legally licensed through the DiveMarketplace by Industry Dive. Please direct all licensing questions to

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