As Davis mentions above, financial stress is a key component of financial wellness. More specifically, learning to manage financial stress is crucial. “No matter how positive you may feel about your financial well-being, no one is immune to financial stressors,” says Ashley Agnew, a financial therapist and the director of relationship development at Centerpoint Advisors in Needham, Massachusetts.
As with other types of stressors, a certain degree of financial stress may be helpful. Agnew says that a minor amount of financial stress is what keeps us from constantly overspending. Feeling a lot of stress about a particular thing, whether it’s a single purchase or an ongoing financial commitment, could be the gut-check you need to reconsider that decision or similar ones going forward.
But constant, overwhelming financial stress isn’t healthy. A study published in 2022 found it to be positively associated with depression in populations of all income levels, although the relationship is stronger among low-income populations.
And unfortunately, addressing financial stress is uniquely challenging for several reasons. First, we’re constantly making decisions about money — some as small as whether or not to buy the sale item at the grocery store, and some as large as whether to lend money to a family member. “It is only normal to feel some level of stress along this continuum throughout the day,” Agnew says. Always having to think about the consequences of these decisions can feel burdensome.
Second, for many people, financial decisions and their consequences are shared. If you share finances with your partner or your family members, then their financial priorities and numbers get intermingled with yours. But no two people are on exactly the same page about money. “Each person has had fundamentally different experiences with money,” says Ed Coambs, a certified financial planner, licensed mental health therapist, and financial therapist who owns Carolina Couples Counseling in Matthews, North Carolina. It’s not just our current financial situation that shapes our relationship to money; it’s also our past experiences, including how our parents related to money.
Finally, some financial stressors can be chronic and absolutely crippling. If your income is not enough, or barely enough, to cover your basic needs, then you likely feel very stressed every time it’s time to pay rent and other bills (such as utilities and medical expenses). You might be tempted to numb out the stress instead of facing it, which just perpetuates the cycle. Davis says that it’s important to know where your money is coming from and going — even if you don’t have enough, getting a realistic picture of your situation is the first step toward creating a plan and reaching your goals.
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