One of the coolest things about reading letters and journals from different historical periods is realizing that ancient peoples were really just like us. They experienced things like natural disasters, lack of resources, relationship drama, and feelings of financial stress. 

For example, taking a second to read this customer complaint from 1750 B.C. can remind us that not everything has changed since then…

We all feel stress from time to time. And even though it’s typically an unpleasant feeling, it’s part of what makes us human. In fact, it actually exists as a mechanism to keep us safe. Our “fight or flight” response to stressors has kept us protected from danger as a species for hundreds of thousands of years.

And it might sound weird, but in the case of money management, we can actually use our financial stress as a tool to accelerate our progress towards our financial goals!

Too Much Stress is a Bad Thing

Now, we’re not recommending you go out into the wild and expose yourself to the elements in the name of using stress to supercharge your finances. It’s no secret that too much stress can lead to monumental problems in your life. 

Being stressed out about money all the time can negatively impact your health and your relationships. This then causes you to be irritable, or to lash out against your loved ones. It’s worth noting here that money arguments are the second leading cause of divorce! Prolonged stress can also lead to serious health complications like ulcers, cardiovascular disease and more. 

Further complicating our relationship with stress is our less than perfect coping mechanisms. Some of the top stress management activities among millennials is watching tv for over two hours each day, surfing the internet, napping, eating, drinking and smoking. While these activities may be reasonable choices in moderation, using them to cope with chronic stress creates more problems than it solves. 

Plus, being overly stressed can also have a negative impact on our bank accounts. Many people cope with negative feelings by impulse spending. And you’re more likely to make poor financial decisions when you aren’t in your best headspace. 

A Bit of Financial Stress Can Be Good

Too much stress is certainly a bad thing. But that doesn’t mean that stress itself can’t have some positive effects as well.

Remember that stress was meant to spur us into action (or avoidance) when challenges presented themselves. So, if we react to financial stress the right way, (i.e., taking positive action instead of curling up into a ball like an armadillo) it could help us propel ourselves into a better position. 

How to Use Financial Stress to Your Advantage

If you want to take your stress and turn it into something positive, turning those stress-filled lemons into delicious lemonade, try using these tips to use financial stress to your advantage!

1. First, Identify Problem Spots

Financial stress is a great way to identify your financial weaknesses that need to be worked on. When you’re stressed over a particular money problem, it’s probably a sign that this area of your finances could use some work. 

For example, if you’re constantly worried about not having enough money, it could be a sign that you need to work on increasing your income and slashing your expenses. If you find that you’re overwhelmed by the amount of tasks you need to knock off your to-do list in order to keep your finances in check, maybe you need to spend some time simplifying your finances. 

As uncomfortable as it might be, try to identify exactly which elements of your finances are causing stress. Once you’ve written down what they are, you can come up with a plan to tackle those problem spots. 

2. Create a Budget

If your money worries are a little more ambiguous, one way to relieve them in a positive way is to channel that stress into a budget.

While some might think that budgeting creates restrictions in your life, the exact opposite is true. That budget actually gives you the freedom to spend on the things that matter to you without guilt. Plus, it’s shown that budgets give people more mental freedom as well. A YNAB survey from 2021 found that 76% of users who used a zero based budget reported having little to no financial stress!

A zero based budget is a budgeting method which gives each dollar a job. And those who review their budgets weekly experience less financial stress.

Budgeting is a great way to lower your financial stress. Because when you face the numbers, you might realize that you’re doing better than you thought. And even if you’re not, sitting down and getting clarity on exactly where you stand can eliminate that looming anxious feeling of not knowing.

It’s kind of like when you’re worried about a big event. The anticipation is almost always worse than the actual thing itself. If you’ve been reacting to your stress with financial avoidance, it’s time to rip off the bandaid and face those numbers head on. Getting organized with a zero based budget will immediately help you to feel better. It’ll also set you on a better financial path!

3. Tackle One Thing at a Time

Now that you’ve identified your weak spots and created a budget,  it’s time to compile a list of money goals and tasks that need to be accomplished. If we want to use financial stress to our advantage, we need to put the rubber to the road and take action. 

Having too many goals at the same time can actually prevent us from making any sizable progress on any front. It’s easier to lose focus if we’re spreading ourselves too thin, which minimizes our ability to make progress. 

So, make sure to work on one goal at a time. Once you accomplish the most important task, you can move on to the next one. Make sure to set up a weekly or monthly check in where you can reflect on the progress you’ve made and hold yourself accountable. 

For guidance on how to set better financial goals, check out our post on Setting SMART Money Goals.

4. Track Your Progress

One great way to ease financial stress is to take time to recognize the strides you’re making as you’re moving through your money journey! That’s why it’s so important to track your progress. 

Celebrating the small wins, like paying off a debt or fully stocking your emergency fund will help you to feel better about your finances and motivate you to keep going.

If you’re looking for some quick financial wins, make sure to tick off a few of these… 7 Ways To Save More Money This Week.

5. Use Stress to Create an Emergency Fund 

Sometimes our fear of the unknown can create a lot of stress in our lives. That’s where an emergency fund can come into play!

Emergency funds are sums of money that we put aside to cover unknown emergency expenses that could pop up in our lives. Think car insurance deductible, losing income, or medical emergencies. Having enough cash set aside provide so much peace of mind.

Typically, it’s recommended that you set aside about 3-6 months of expenses in an emergency fund. But even a small e-fund can help you weather most unexpected expenses. For example, economists have found that even just having $2,467 set aside for a rainy day can help you weather most of those financial storms.

So, if you’ve been stressed out about unknown expenses that could pop up out of thin air, channel that stress into becoming laser focused on building up that emergency fund. Having money in the bank to back you up can severely reduce the stress you feel on the money front.

6. Ask For Support

If you can’t seem to shake the feelings of financial stress, try opening up to a friend or loved one about your situation. Sometimes just talking through a situation with someone you trust can leave you feeling reassured and more capable to tackle the challenges you face. They might have gone through a similar situation. They may offer some wisdom, or they can assure you that you’re doing better than you think.

Remember that you are not alone. And you can always hit us up with your questions by submitting a voice memo for our Ask HTM episodes!

7. Try Journaling or Counseling

Journaling can be a great way to relieve stress, learn more about ourselves, and reflect on why we feel the way we do about our finances. Best of all, it’s totally free! Check out this article from Purdue University for some tips on how to start journaling effectively!

Along the lines of self discovery, sometimes creating a checklist of questions to ask yourself before spending helps. Here’s a flowchart we created whenever you think “should I buy this?“

If you feel like the stress is impacting your mental health, it could be time to seek some professional guidance. Here are some resources below that can help! 

• Financial Therapy Association– Helps you to find a Financial Therapist
• Therapist Finder at Psychology Today
• Money Management International– Can help you to create a debt management plan
• XY Planning-Can help you find a fee only financial planner
• NAMI– Mental health support beyond finance

8. Focus on Others

Financial stress has a way of drawing us inward, causing us to think a bit too much about ourselves. And sometimes it can make us forget that there is a whole world outside of our little bubble – and our individual budgets!

Oftentimes, the secret to feeling less stressed is to try and focus on helping the people around you. Being generous with your money or time can give you a sense of purpose. And purpose helps carry you through worrisome times. 

Helping a friend to clean their place, accompanying someone you love on an errand, or cooking dinner for a neighbor can bring our stress levels down and help us to see the bigger picture. The truth is that we’re often doing better than our idiot brain leads us to believe.

The Bottom Line: 

To think that you’ll never experience financial stress in your life is unrealistic. Life will always throw us curveballs, and we’re more than likely to find ourselves in unexpected situations that require us to be flexible in our money approach.

But hopefully next time you’re feeling financially stressed, you’ll be able to take a more nuanced approach with how you view it. Creating healthier coping mechanisms (and possibly making things fun with money challenges!) will help transform that financial stress into your money superpower. 

Be sure to check out these related posts to read more about the ways our mindsets can affect our money! 

• 12 Ways to Battle Money Anxiety
• 14 Tips for Mindful Spending
• Frugal vs Cheap: Differences and Examples

Beer notes:

While talking about financial stress we enjoyed a Moojito by Bolero Snort Brewery. And please help us to spread the word by letting friends and family know about How to Money! Hit the share button, subscribe, and give us a quick review in Apple Podcasts. Help us to change the conversation around personal finance and get more people doing smart things with their money!

Best friends out!