For many people, financial stress arises when facing significant financial challenges or uncertainties. It can happen if you struggle to manage your day-to-day expenses or face a gap between income and essential needs such as rent, food, utilities, or childcare costs. The good news is that small, consistent steps can help you ease these feelings of stress, and, in turn, help improve your overall wellbeing.
In this article, our partners at AIA Financial Wellbeing unpack how financial stress can impact you while providing ways to best manage yourself when experiencing any level of financial stress.
the causes and impacts of financial stress
Amanda Jones, Senior Financial Planner at AIA Financial Wellbeing, explains that financial stress can stem from significant life changes such as expanding your family, or unexpected events such as a job loss or illness. It can also result from rising costs or difficulties in managing budgets effectively.
The effects, however, extend far beyond finances. Research shows that financial stress can negatively impact your mental, social and physical wellbeing, which may contribute to changes in your overall mood, thoughts and health¹. Relationships with others may also feel strained, and the constant worry can make it difficult to focus on other aspects of life.
On the other hand, feeling financially secure can positively contribute to a holistic state of wellbeing, allowing you to focus on living your life to your fullest. The benefits of feeling financially secure can include:
- Improved sleep quality
Studies show that ongoing financial strain is associated with lower sleep efficiency², meaning that being free of these worrying thoughts can contribute to an overall improvement in sleep quality. - Increased energy levels
Cortisol, the hormone that helps your body respond to stress, can build up in your body and make you feel drained and fatigued. With lower cortisol levels comes higher energy levels³, which can allow you to be more involved in your daily activities and focus on other aspects of your lifeˆ. - Positive mood and emotional balance
Studies have found that higher financial worries have a direct link to lower emotional wellbeing⁴. By easing financial concerns, your overall outlook can become more positive. This sense of ease allows you to regulate emotions more effectively, responding thoughtfully to situations rather than reacting impulsively.
“Feeling financially secure can positively contribute to a holistic state of wellbeing, allowing you to focus on living your life to your fullest.”
3 steps to manage financial stress
Managing financial stress doesn’t have to feel daunting. Here are three simple and practical steps Amanda suggests to help you ease any pressure:
the power of small steps
Making meaningful changes in your financial life doesn’t happen overnight. However, small steps can lead to significant improvements over time.
Be patient and consistent with your efforts. Celebrate small wins, whether it’s saving a little extra, paying down some debt, or simply feeling calmer about your financial situation. Each step forward is a step toward greater financial freedom, peace of mind, and better wellbeing.
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