Money worries can be a large source of stress and anxiety. According to the Government of Canada, a survey in 2018 reported that “48% of Canadians say they’ve lost sleep because of financial worries”. Financial stress has increased even more due to the COVID-19 pandemic. Individuals have experienced reduced or lost incomes, with many peoples’ financial future remaining uncertain. This stress can greatly impact mental health and overall wellbeing.
The impact of financial stress
Finances are a common trigger for stress. Much like other forms of stress, individuals can suffer from insomnia, anxiety, depression, and increased anger and frustration. It can impact relationships with spouses, friends, work colleagues, and families. If any form of stress gets bad enough, physical and mental health can get worse. This could affect work performance, which could lead to more financial stress.
How to manage financial stress
Often stress will not go away unless the source is found and addressed. The same is true of financial stress. This is a challenge, but there are some ways you can manage your finances and manage your finance-related stress.
- Ask for help
Finances can be complicated, and many people need help with them. You can ask a caregiver, friend, or family member to help you either with stress or with your finances.
If you want to better understand your finances and how they work, The Canadian Bankers Association offers free support and community programs. These programs provide education on safe online financial practices and fraud. Many banks also offer free financial advice, as well as services, to strengthen your financial skills.
Additionally, you can access the financial literacy programs through the Government of Canada, which provides you with access to workshops and videos.
- Review your finances and complete a budget
The first step is to review and understand your financial situation and your financial obligations. The best way to do this is to make a budget. Your budget should include:
- Any income you generate
- Assets you hold
- Financial commitments (such as rent, groceries, and other recurring bills
This will give you a clear picture of your financial status, and give you an effective tool for identifying financial problems.
- Identify financial problems/stressors and develop a plan
By understanding your financial situation and making a budget that addresses the financial stressors, you may alleviate some stress and anxiety.
For example, if debt is the source of your financial stress, review your options for debt consolidation (combining two or more debts into one single debt) or repayments to reduce or eliminate it.
If spending is a source of financial stress for you, use your budget to set a spending limit based on your needs (groceries, electricity) versus wants. You can track your spending over the course of a few weeks to keep track of how much you save and what items may trigger impulse spending. If you know you are an emotional spender, you can look for additional ways to cope with those emotions.
If you have not been able to determine your triggers, ask for help from a loved one, a friend, or a family member. If you are not familiar with how to address financial stressors, you can talk to a financial professional.
- Learn more about managing financials
Once you have a budget and have started addressing your financial stressors, you will need to manage them going forward.
Usually fear and anxiety come from the unknown. Once you have a better understanding of how to manage your money, much of that anxiety and stress will disappear. There are many free financial courses and programs available that can help you understand how to manage your finances.
- Look for ways to reduce your spending
Once you have your budget in place and know how much money you spend each month, you can look for ways to reduce costs.
For example, if you order a lot of take out dinners, you can save money by eating out less. Or if you order a coffee per day from a coffee shop, you’ll save more if you make yourself a coffee at home.
Look for sources of financial assistance
Depending on your circumstances, you may qualify for some sort of financial aid.
- Do not take any unnecessary financial risks
If you are suffering from financial stress, it is important not to take any unnecessary risks. Risky investments, compulsive spending or gambling can lead to more stress.
Understanding your financial situation and sticking with your budget is the best method to reduce your financial stress and anxiety.
- Engage in self-care to manage stress
While some people do use spending as a self-care tool, there are several areas of self-care. Self-care activities should help you focus on yourself, your well-being, and overall reduce your stress.