Financial Stress

If you’ve ever worried about money, you’re not alone. In fact, 90% of Americans say their personal finances affect their stress levels, according to a recent study from Thriving Wallet.

Unfortunately, excess financial stress can lead to sleepless nights, anxiety, and even physical health problems. Moreover, it can strain relationships and make it harder to focus on work or enjoy life.

The good news is there are ways to manage financial stress, so your money doesn’t end up controlling you. In this article, we’ll explore six steps you can take to feel better about your finances while setting yourself up for long-term financial success.

Why Are So Many People Stressed About Money?

Financial stress can ebb and flow over the course of one’s lifetime, oftentimes in relation to major life events and external circumstances. While the specific causes are often personal, there are several broad factors that can lead to excess money worries.

For instance, people often stress over money when they think they don’t have enough of it. These concerns can be particularly acute for those nearing retirement, who run the risk of outliving their financial resources if they don’t plan carefully.

Poor financial decisions can also increase stress levels, even if they feel like good decisions at the time. For example, many people stretch themselves financially to purchase their dream home, only to worry about how they’ll cover all the costs that go along it once they move in.

Then there are circumstances beyond our control that create financial stress, like economic shocks and persistently high inflation. Indeed, 52% of U.S. adults say their financial stress levels are higher now than they were before the Covid-19 pandemic began, according to a recent CNBC/Momentive survey.

Fortunately, a little self-awareness and financial self-care can go a long way when it comes to reducing financial stress. By developing a healthier relationship with your money, you can start to make decisions that better serve you and the financial future you desire.

6 Ways to Reduce Financial Stress

#1: Identify Your Sources of Financial Stress

The first step in reducing financial stress is identifying its source. Is it mounting debt? Lack of savings? Uncertainty about retirement? Perhaps it’s due to bad habits, like impulse spending or living beyond your means.

By pinpointing the root cause of your stress, you can develop a targeted plan to address it. If you know that unexpected expenses are a major source of anxiety, for example, you might prioritize building your emergency fund.

In some cases, accumulating wealth can cause financial stress as your planning needs become increasingly complex. By acknowledging these challenges, you might also give yourself permission to seek expert help, so you no longer need to make tough financial decisions on your own.

No matter the source of your stress, you can’t effectively address the problem without first identifying its cause. Understanding where your financial stress is coming from can help you take steps to reduce it and prevent it from resurfacing in the future.

#2: Assess Your Financial Health

Facing the reality of your financial life may be the last thing you want to do, especially if you’re already stressed about money. However, ignorance isn’t bliss when it comes to your finances.

If financial missteps or shortcomings are causing you stress, ignoring the problem won’t make it go away. To get where you want to be financially, you must first understand your starting point.

There are several key metrics you can use to assess your current financial health, including net worth, credit score, debt-to-income ratio, cash reserves, and retirement savings. These measures will help you understand where you’re doing well financially and where you may need to adjust your habits.

For example, if your debt-to-income ratio is relatively high and your credit score is suffering as a result, you may need to create a plan to get out of debt. On the other hand, if your net worth is increasing but your emergency fund and retirement savings have remained stagnant, this may be an indication you need to boost your savings targets.

Tracking these metrics over time also allows you to measure your progress, which can help boost your financial confidence. Furthermore, understanding the underlying elements of your financial health can help you make better decisions, so you’re less stressed moving forward.

#3: Get Clear on Your Financial Priorities

Now that you have a better understanding of your stressors and financial position, the next step is to get clear on your financial priorities. In other words, what matters most to you when it comes to your money?

For some people, staying out of debt may be more important than living a lavish lifestyle. Others may be willing to make sacrifices today so they can retire ahead of schedule.

Once you have a better understanding of your financial priorities, ask yourself if your actions tell a different story. For instance, if it’s important for you to retire on time but you tend to spend more than you save, this disconnect may be a source of stress.

It’s important to be honest with yourself as you take inventory of your values, goals, and financial habits. Aligning these three factors can help you reduce financial stress and feel better about your money long-term.

#4: Save Enough Money to Help You Navigate Tough Times

Another way to reduce financial stress is to ensure you have adequate emergency savings. An emergency fund can provide peace of mind if you incur an unexpected expense or experience a financial setback like a job loss.

Unfortunately, only 48% of Americans say they have enough emergency savings to cover living expenses for three months. Meanwhile, 22% have no emergency savings at all, according to a recent Bankrate survey.

Most experts recommend saving enough to cover at least three to six months’ worth of expenses. However, the exact amount will vary depending on your lifestyle and risk tolerance.

If a lack of savings or the possibility of losing your income is keeping you up at night, be sure to take stock of your emergency fund and give it a boost if necessary.

#5: Embrace Communication

Finances are the number one cause of stress in a marriage, according to a study by SunTrust. Moreover, the Institute for Divorce Financial Analysis reports that money issues are the third leading cause of all divorces.

If financial stress is taking a toll on your home life, consider opening the lines of communication with your partner or spouse about your concerns. For example, if your spouse’s spending habits are getting in the way of your savings goals, having an open and honest discussion about it may help realign your interests.

Even if your relationship isn’t suffering from money worries, talking to someone about your issues can help relieve the burden you’ve been carrying and reduce financial stress. Plus, you may gain valuable advice and insights that give you a new perspective on your financial situation.

#6: Engage a Financial Advisor like Benchmark Wealth Management to Reduce Financial Stress

Finally, if money is a constant source of stress in your life, consider seeking professional support. A trusted financial advisor like Benchmark Wealth Management can help you navigate the complexities of your financial life and develop a plan to secure your financial future.

Our goal is to ease your financial apprehensions and help you achieve your goals by providing holistic financial planning and investment management solutions. If you’re looking for more guidance and peace of mind when it comes to your finances, we encourage you to contact us to learn more about how our team can help you reduce financial stress.


About Rick

Richard W. Stout III is managing director of Benchmark Wealth Management, LLC, with 25 years of experience in the financial industry. He specializes in financial planning and asset management for individuals, families, and institutions seeking to build and monitor durable and sustainable plans for their financial futures. Rick is a Certified Financial Planner™ professional and holds the Accredited Investment Fiduciary® (AIF®) designation. He obtained his MBA from Rensselaer Polytechnic Institute and his BA in Economics and Anthropology from the University of Connecticut. Rick has earned a Master of Science degree in Personal Financial Planning from the College for Financial Planning. He has extensive background experience in lending, credit review and analysis, and real estate and partnership management. Learn more about Rick by connecting with him on LinkedIn.

About Thomas

Thomas J. Britt is managing director of Benchmark Wealth Management, LLC, with 23 years of experience in the financial industry. He specializes in executive financial planning, retirement planning, investing, as well as the management of trusts and endowments. Thomas is a CERTIFIED FINANCIAL PLANNER™ professional. He holds the Master Planner Advanced StudiesSM, MPAS®, Certified Investment Management Analyst® (CIMA®), and Chartered Retirement Planning Counselor℠, CRPC® designations. Thomas earned a Bachelor of Science in Finance from the University of New Haven, an MBA in financial technology from Rensselaer Polytechnic Institute, and a Master of Science in Personal Financial Planning from the College for Financial Planning. He is also a proud veteran of the United States Navy Submarine Force. Learn more about Tom by connecting with him on LinkedIn.

Additional information, including management fees and expenses, is provided on our Form ADV Part 2, available upon request or at the SEC’s Investment Advisor Public Disclosure site,

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