Mental Health: Coping with Stress and Financial Issues

When you’re experiencing money problems, it often feels like these challenges are seeping into other parts of your life. According to studies, a reported 40% of Australians have experienced some form of financial stress within the past few months. Especially in the midst of the COVID19 economic crisis, this percentage is on the rise.

If you’re experiencing money troubles, you’re not alone. Whether you’re worried about paying rent, getting out of debt, or making credit card payments, these things add up quickly. When you have long-term financial problems, you often face a very real impact on your mental health.

Money affects all of life, from our personal relationships to our own daily feelings. In this guide, we’ll explore the ways mental health and financial issues overlap, as well as how to cope with the stress of financial issues long term.

Do Financial Issues Impact Mental Health?

First, how exactly do financial issues create long-term challenges for your mental health? Any type of stress can take a toll on your health, and this is especially true with money troubles. Worrying about how you’ll make ends meet is a vicious cycle. You might find yourself unable to relax or think positively about the future.

There has been a lot of research on the impact of financial challenges on mental health. Financial stress is proven to lead to the following:

  • Poor physical health: When you deal with long-term stress related to money issues, you’re more likely to experience negative impacts on your physical health as well. In fact, stress about money has been linked to conditions such as migraines, heart disease, sleep problems, and diabetes.
  • Coping behaviours: When you’re under a lot of stress, it’s common to cope with unhealthy behaviours. These can even further challenge your mental health, like overeating, using alcohol, or behaving recklessly.
  • Relationships: When it comes to issues between couples, money is often cited as the top problem. Financial strain can make you irritable, lead to conflict, and even wear at the foundation of your relationship.
  • Anxiety: When you’re always worried about your next paycheque and how to make ends meet, you might find yourself experiencing ongoing anxiety. Without an emergency fund or safety net, you might experience anxiety symptoms like sweating, pounding heartbeat, racing thoughts, and even panic attacks.
  • Depression: According to a study in the USA, 53% of people with high student loan debt experience depression as a result.
  • Insomnia: Lastly, few things will keep you up as late as worrying about unpaid bills or expenses. Sleep difficulties are common if you’re experiencing financial hardship, and this can impact all areas of your life.


If you’re experiencing particularly severe depression, anxiety, or physical symptoms, speak to your doctor right away. Nobody has to suffer alone, and there might be treatment options available for your situation.

Unfortunately, financial health is directly tied to your physical and mental health. The stress of dealing with financial issues can leave you anxious, depressed, and unsure where to go from here. This is a common yet unwelcome story.

Moreover, because you’re experiencing mental health challenges, you might even find it harder to manage your money and debt payoff. It’s a vicious cycle, but it doesn’t have to be this way. By taking the first step, you discover that you have control over your life. Money might be a part of your story, but there is so much to your life, happiness, and wellness.

How to Deal with Money Stress

If you’re currently experiencing money stress, it’s important to take action. While it’s unlikely you will ‘solve’ your problem overnight, taking action is a great way to feel in control. When you feel in control of your money and your life, you gain freedom from your financial burden.

Learning how to cope with your financial stress takes time and effort, but it’s well worth it. Follow these steps below to get your plan started. Most importantly, remember that you’re in the driver’s seat when it comes to your own finances.

Step 1: Talk to someone

Firstly, make sure you’re not bottling up your feelings and concerns. When you’re experiencing money problems, it’s tempting to keep things to yourself. Not only can talking about money be awkward, but you might feel uncomfortable opening up to someone. In reality, talking to someone you trust is a way to ease this burden.

Choose a trusted friend, relative, or financial professional to talk to. Be honest about what you’re going through and how you feel. When you talk about your worries, you’re no longer in this alone. You have a trusted individual to join this journey with you, and that makes all the difference.

Step 2: Check in with your budget

When you feel like your money situation is out of control, it’s hard to know what steps to take first. Start by checking in with your current budget (or start one) and seeing where you are. For many, you might not even fully know how much you owe, what’s in your bank accounts, and so on.

Create a list of all of your income, expenses, and debt. Determine the minimum payment for any debts, and make sure you have a clear understanding of what’s due when. Take a close look at your current spending, whether you use a budgeting app or check your bank statement. Be honest with yourself, but practice forgiveness. It’s okay to not be perfect.

Step 3: Make a new plan

No matter what system you’ve been using in the past, it’s time for a new plan that takes your mental health into consideration. Now that you understand your current financial standing, you’re ready to make an action plan. It only takes a few steps:

  • Identify your goal: With your check in fresh in your mind, what is your first goal? This can be to pay down your debt, build your savings, or invest for the future.
  • Choose a solution: Depending on your goal, you might need to choose a solution like a debt consolidation loan, opening a new savings account, or refinancing your home.
  • Create a budget: If you don’t have a budget, now is the time to make one. Account for all expenses, income, and minimum payments.
  • Talk to a pro: Talking to a financial professional is the best way to create an effective, customised plan for you. Having a professional on your side gives you priceless peace of mind, easing the emotional burden of debt.

Step 4: Monitor your progress

Your plan shouldn’t be one-and-done. Make a plan to check in with your progress regularly, whether you have a monthly day to review your budget or you work with a professional quarterly. Things change, and they often change quickly. Having a plan for monitoring your progress is important.

If you experience any big life changes, take the time to revise your plan. The market might change, making refinancing more worthwhile. Similarly, you could make more money through a side hustle, and that might mean paying more towards your debt. It’s a good idea to take inventory regularly to stay on track.

Step 5: Practice forgiveness

Last but not least, be kind to yourself. Things happen. There will be setbacks occasionally, and that’s perfectly okay. We’re all human. No matter how precise you make your plan, sometimes life gets in the way.

Whether you spend too much for your budget in a specific month or you have unexpected car repairs, it’s okay to make mistakes. There’s no reason to beat yourself up about it. It’s all part of the learning experience, and you can focus on the progress you’ve made so far.

If you’ve been struggling with debt and mental health challenges for a while, it’s often difficult to escape the cycle of negative thinking. It comes down to changing your mindset around money. While money is a big part of life, it does not define you. Your relationships, memories, and wellness are all worth more than what’s in your bank account. Practice forgiveness and treat yourself with fairness.

Create a Brighter Future

Ultimately, money stress often impacts all areas of your life. Whether you find yourself dealing with racing thoughts related to your bills or you can’t sleep at night, these experiences are common. Though we often feel like we’re out of control, you can get your wellness and your financial plan back on track.

By taking the first step, you recognize that change is possible. When you take control of your plan, everything else feels more manageable. Remember, your health is the most important thing you have. Don’t risk it, no matter how difficult your money stress feels at times.

When in doubt, reach out to the pros. You don’t have to create a money plan alone. Whether you’re dealing with budget stress or you’re not sure how to pay down your debt, our team is here to help you. With over 15 years of experience helping Aussies of all backgrounds, contact Debt Busters today on 1300 368 322 to get started.

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Debt Busters is an Australian owned business which was founded in 2005 - since then we have been able to help thousands regain financial control.

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