Understanding and overcoming financial stress

Are you struggling with stress or financial anxiety? Rest assured, it’s a common feeling. It’s often related to outside factors like cost of living and job instability. Financial stress can seep into your everyday life and start to feel overwhelming. Read on for ways to better understand and overcome your stress.

Financial stress is emotional tension caused by money worries: accumulation of debt, unexpected expenses, lack of income or difficult financial decisions. This stress can affect your mental health, personal relationships and even productivity at work. However, it doesn’t always reflect reality. It might be financial dysmorphia.

What’s financial dysmorphia? It’s when you think your financial situation is better or worse than it really is. It can be amplified by social media content and comparing yourself to others. In other words, financial stress can be ramped up by your own beliefs. 

That’s why it’s important to identify your sources of stress, find suitable ways to address them and, above all, take action to put them into practice.

According to survey findings from Léger and United Way Centraide Canada, more than half (55%) of Canadians feel anxious about their personal finances. This speaks to how common money worries are—so let’s take a closer look at what causes them. Keep in mind, though, that factors vary from one person to another.

Credit card debt and student loans, for instance, can be a financial strain. Mounting financial obligations can weigh you down, especially when you feel like you can’t seem to get a handle on your balance owing.

An urgent repair, a loss of income or an unexpected event can undermine your financial stability. Without an emergency fund, issues like water leakage, unexpected car repairs or health issues that prevent you from working could result in serious financial worries.

Job instability can eat away at your personal and financial well-being. Precarious professional contracts make financial planning difficult, creating a feeling of vulnerability and uncertainty about the future. 
 
Other issues include a changing labour market, automation and job cuts.

Inflation, climbing interest rates and the increasing cost of essential goods can also make everyday life harder to manage. For the most part, these pressures are out of your control when it comes to your personal finances, but they can still lead to additional worries.

Not having a financial cushion can definitely cause financial stress. A lack of savings is often less a failure than it is an inability to set money aside when so much of your paycheque is going toward your basic expenses. 
 
The idea that you need to save a certain amount or meet financial goals by a specific age can sometimes create extra pressure. But financial success doesn’t follow a straight line—it depends on your personal, professional and family circumstances.

A better grasp of your financial reality lets you identify appropriate ways to save and deal with the sources of your financial stress. Remember: Every situation is unique.

Retirement, for some, is a source of concern. The absence of a clear plan or proper nest egg can often be a financial concern years before you leave the labour market.

It’s a natural tendency to look at people around you and compare your savings. Or to feel pressure if you haven’t reached your financial goals by a certain age.

Some people have a hard time talking about money or expressing their fears. Because finances are often seen as a touchy subject, these concerns are often left unspoken. Suffering in silence only makes matters worse and can get in the way of looking for solutions.

Opening up to someone is crucial in breaking the isolation and fostering financial well-being. 

That said, attitudes are changing. The conversation seems to be a bit more open these days, thanks to financial content on social media.

Financial stress isn’t just about numbers in your budget. It can affect your overall health in many ways. That’s why it’s important to identify it and take action.

The Government of Canada has found that there is a correlation between financial difficulties and psychological distress. Financial stress can be linked to headaches, strain in personal relationships, anxiety and depressive symptoms.

Financial stress can affect your body, too. Insomnia, headaches and digestive issues can even become chronic.

Tension caused by financial difficulties will sometimes trigger conflicts, impede communication and fray relationships.

Shame over debt and fear of judgment can lead to isolation, as some people will stop going out and gradually withdraw into themselves.

Whether it’s taking a fresh look at your finances or getting some emotional support, every action counts when it comes to your peace of mind. Here are some solutions and ideas to reduce your financial stress.

If your stress is affecting your everyday life and overall health, consider turning to professionals for support. They’ll help you work on your financial stability and well-being.

Desjardins advisors are always there for you as well, if you want to discuss your finances, ask questions and get personalized advice.

Before you look for solutions, we recommend doing a financial check-up. You’ll get a clear, realistic picture of your income, debt, financial obligations and spending patterns.  

This honest assessment is the first step toward financial well-being. It’s a starting point for your personalized plan, and it sets you on the path to real solutions for brighter days ahead.

One of the most common pieces of advice for getting your finances back on track is to make a budget—but it’s not as simple as it sounds. Nevertheless, it’s a key part of reaching your financial goals. 

“Anxiety is about how we imagine the future,” explains psychologist Dr. Coutu. “That’s why planning, organizing your finances and taking concrete steps usually helps calm the mind.”

We recommend starting with a weekly mini-budget, which can make decision-making easier. Good to know: Our virtual assistant Alvie offers advice you can bank on when it comes to managing your daily finances and making informed choices!

Need a hand structuring your budget? Be sure to try our online calculator.

Saving can seem daunting. We recommend starting small and automating contributions to your savings account. These habits can help you grow an emergency fund so you can be ready for unexpected expenses. You’ll be building your financial resilience and, ultimately, boosting your confidence in your ability to manage money.

Money comes with its share of challenges, and learning more about them can help you manage your finances more confidently. How? 

• By using budget management tools 

• By seeking out articles and podcasts on the subject 

• By debunking financial myths and misconceptions

In other words, furthering your financial literacy will give you a better idea of economic issues and allow you to make more informed decisions when it comes to money and debt management.

Dr. Coutu points out that stress and anxiety are human realities we can’t simply get rid of. “Stress is a physical reaction,” she says. “Our nervous system reacts to protect us. Techniques like breathing, movement and mindfulness can help calm it.”

Mental health and financial well-being go hand in hand. Breathing exercises, mindfulness meditation, physical activity and keeping a journal can help you release tension. That said, managing financial stress is easier said than done.

Everyone is different, so there’s no one-size-fits-all solution. Sometimes it takes a combination of tools, online resources and professional support to find the formula that works for you. Learning to manage your stress can be a long process. The key is to be patient and put in the time.

A steady routine breeds consistency in personal and financial habits. Consider setting time aside for your budget and financial goals and for simple things, like taking a break from screens. Regular habits like these are particularly beneficial in times of uncertainty.

Social support plays a vital role, especially during extended periods of stress. Reaching out to loved ones, sharing in forums or talking to support groups opens the door to breaking the money taboo.

But beyond these things, remember to do things that bring you joy. Even small, inexpensive gestures can go a long way.

We now know the effects that financial stress can have on your mental health. But it's in your power to understand, identify and act to overcome it. No matter your financial situation, you deserve peace of mind when it comes to your personal finances. We encourage you to talk about money more openly, recognize your needs and take steps to achieve balance and well-being at your own pace.

If you’re finding the current economic climate particularly challenging, we’re here to provide you with financial assistance.

Remember:

• Understand your stress

• Identify what’s causing it

• Take small, consistent steps 

• Don’t be afraid to seek help

• Put your well-being first

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