Strategies for avoiding and managing financial stress


Strategies for avoiding and managing financial stress


Money may not buy happiness, but a lack of it can certainly make you miserable. In November 2016, 31% of employed people in the UK listed financial issues at the top cause of stress. We can’t manufacture money out of thin air, but we can treat it in ways that keep stress levels down. Stress affects our short-term memory, our concentration and our decision-making – all quite important when it comes to finances. Here are some things that can help avoid money stress, or reduce it if you’re already feeling it.


First, deep breath. Have a think about your stress points – what is really bothering you about your financial situation? Is there a long-running problem you can’t get on top of, like a persistent credit card balance, or an unmet goal, like the fact you haven’t got any savings or don’t know what your energy bill will be? Is it your tendency to shop online after a glass of wine? Try to zero in on what is causing your anxiety. It can help to write down your three biggest financial sources of stress so you know what you’re up against and can get them out of your head.


Next, think about achievable goals. If you’ve got a £10,000 credit card debt, it’s probably not realistic to think about paying it back in a single pay cycle. Give yourself a break and try to avoid comparing your situation to other people’s. Chances are you will deal with things a bit differently to someone else in the same position.


Nobody ever solved a money problem with imaginary numbers. Write down what you’re spending – In much the same way that it’s all too easy to munch on a chocolate bar while you’re watching the television, it’s all too easy to rack up bills with online spending, or via contactless. Retailers aim to make it easy to spend money. Writing down the reality is the first step to creating a budget and looking at what expenses you can change.


It’s important that you don’t avoid your debts. Debt is the single most soul-sapping source of money anxiety. Working to pay money you’ve already spent is profoundly depressing. Don’t ignore debt; it will not go away. Some practical things you can do:


  • Get a loan to cover expensive debt with a lower overall interest rate. Pay off a set amount every month and set out a plan to clear it. This can take months, so prepare to be patient.
  • Careful of bank overdrafts. The charges have increased a lot this year, so if you must go into debt, use a lower-interest alternative.
  • Again: don’t be over-ambitious, setting a level you can stick to is better than giving up because you over-commit.


If you are clear of debt, it’s time to build an emergency fund. This is an antidote to just about any source of money stress out there. Every financial adviser will recommend holding at least three months’ worth of expenses in cash. In building your fund, hive off a small percentage of your net salary on pay day. You will get used to it faster than you’d think.


Finally – be kind to yourself. Baby steps!

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