Debt can have a domino effect on your well-being, and most Americans struggle to stay on top of their finances. The majority of us are living paycheck to paycheck without an emergency fund. That could be why money worries are a significant source of stress for six out of 10 Americans, according to a 2019 report from the American Psychological Association. 

For those struggling financially, finding ways to curb stress may be just as important as choosing strategies to manage money. That’s because financial stress has a significant impact on your physical and mental health. Chronic stress has been linked to headaches and migraines, along with an increased risk for heart attack, stroke, metabolic disorders, depression and immune disorders. It can also exacerbate pre-existing conditions such as respiratory diseases and chronic bowel disorders. What’s more, about a third of Americans report delaying healthcare due to concerns over the cost, compounding the impact of money woes on health.

5 ways to keep money stress at bay

1. Be proactive

If you compulsively check your account balances without setting spending limits, it’s a bit like watching through the peephole for intruders instead of locking your door. You’re causing yourself a significant amount of undue stress while doing little to prevent hardship. 

It’s a good idea to track your spending, but your focus should be on establishing a budget. Adults who don’t budget are more likely to feel worried and stressed, according to a survey from the Certified Financial Planner Board of Standards, while 62% of respondents who have a budget report feeling more in control

To create a budget, analyze your past spending habits and look for areas where you may be able to reduce non-essential spending. Add up known expenses like rent and utilities and subtract them from your post-tax income. Then allocate the rest to spending categories such as groceries and gas, making sure you have some leftover to deposit into a savings account.

2. Automate your savings

No matter your income, you should set aside money for emergencies and retirement. But worries about how much you can safely put aside may add to your stress. That’s why you should build your savings into your budget and set up an automatic deposit into a high-yield savings or investment account each month. If you have direct deposit, you may also elect to have a portion of your paycheck sent right to your savings account. If you stay consistent with your savings, you’ll build up a nest egg that will help prepare you for setbacks, reducing your financial stress. 

Another option is to utilize technology to help you save. For example, apps like Digit can analyze your spending habits and upcoming bills to determine how much you can save each day. There are also apps that round up every purchase you make on a linked debit card to set aside your spare change. Qapital rounds up your purchases to help you meet savings goals, while Acorns invests your spare change for you. These tools can make it easy to establish healthy financial habits without causing undue stress.

3. Make a change

If you’re struggling to make ends meet, you’ll either need to secure additional income or change your spending habits to get back on track. But if you try to make too many changes at once, you could cause yourself significant stress. Instead, choose one habit or behavior and make a change that will set you up for financial security. You might:

  • Negotiate a raise.
  • Get a second job or side hustle.
  • Find ways to earn passive income.
  • Move to a location with a lower cost of living. Americans in some states are more financially stressed than others.
  • Cut expenses like dining out and entertainment.
  • Forego holiday spending.
  • Sell your car.
  • Get a roommate.
  • Look into government assistance programs.

4. Break down your financial goals

Experts recommend goal-setting as a way to reduce stress. The more you can break down your goals into achievable objectives, the less stressful it will be to work towards a healthier financial future. 

For example, if your goal is to pay down debt, you might start by allocating $100 more each month towards tackling your highest interest debt. Set a goal that is realistic and measurable, so you won’t get too frustrated and you can easily track your progress.

5. Find healthy coping techniques

While you work towards better money management, you should take steps to reduce your current stress levels. Some healthy ways to reduce stress include:

  • Aerobic exercise.
  • Mindfulness meditation.
  • Therapy or counseling.
  • A balanced diet.
  • Doing something creative (art, music, movement or drama).
  • Seeking support from friends and family.

Avoid unhealthy coping techniques that could increase your stress in the long run, such as drinking alcohol, smoking or overeating. 

Financial instability can be incredibly overwhelming, but don’t let the stress prevent you from making healthy changes to your behavior. The best way through a period of financial hardship is to take small steps in the right direction while choosing a strategy to reduce your stress levels.