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7 Ways To Reduce Financial Stress

money mindset Sep 15, 2022
couple worrying about money

Financial stress is emotional tension that is specifically related to money and is one of the most common forms of stress in the world. 72% of UK adults think they will be worse off this year (study commissioned by LifeSearch) and growing financial pressures are having a knock-on effect on people’s mental health. The number of people feeling stressed is increasing and over 1.5 million people in the UK are experiencing both problem debt and mental health problems (Money and Mental Health).


Financial stress can affect your sleep and your physical and mental health and can feel overwhelming, like there is no way out of the situation. Anyone can experience financial stress, but learning to cope with it and effectively manage your situation can help you feel less anxious and more in control of your life.


There are some things you can do to help reduce this stress and get on top of your finances and start to feel more positive about the future.


1. Identify the cause of the stress and write it down


You may have 1 main concern which is causing you financial stress or there may be several concerns. You many be worrying about the rising cost of living and how you will be able to afford your bills. You may be worrying about the security of your job. You may be worrying about the effect of the interest rate increase on your mortgage payments. Whatever your money worries, they are unique to you and it is helpful to write them down to give you clarity on what is causing you financial stress and how to tackle it.


2. Look at the things that you can control and put a plan in place


Some things you can't change, such as inflation and the current marketplace. However, a lot of things you can change, and you can start to take steps to tackle the issues that you can control. Write down a plan and make sure your goals are S.M.A.R.T so that they are clear and reachable. S.M.A.R.T. stands for:


Specific (what do you want to accomplish, why is this important, who is involved, what resources are involved).

Measurable (how much, when will you know when it's accomplished).

Achievable (how can you accomplish this goal, how realistic is the goal).

Relevant (will this goal help you? Is it worth your efforts?).

Time-based (what can you do today? what can you do 6 weeks from now, when will you reach the next step?).


It's important to be able to measure your goals as this will help you track your progress and keep you motivated. For example, keep track of how much you are paying off your debt each month or how much is in your savings each month. Write down what you are doing and where you are in your progress so that you can look back over it and see how far you've come. It's also important to celebrate your wins, both big and small. You want to break your goal up into small steps and reward yourself each time you have achieved each step.


3. Look at ways you can reduce your expenditure


There are many ways you can reduce your expenditure, including cancelling unnecessary subscriptions, cutting back on convenience buys such as takeaway coffees and lunches, swapping brands for cheaper versions and shopping around for cheaper deals. All these little things add up. For example, if you have a Costa coffee every week day, reducing this to just one a week will save you £13.80 each week (for a flat white costing £3.45). This adds up to £718 over a year and £1,436 over 2 years! For ways to reduce your expenditure, click here to listen to our podcast episode.


4. Create extra sources of income and try and build up some cash savings


There are various ways you can increase your income. One way is to ask for a pay rise. When asking for a pay rise, be positive and know your worth. Writing down all the ways you benefit the company and your achievements can help with this. It may also be worth checking comparable salaries and looking at salary trends. Another way you could make some extra money is by having a clear out and selling items you don't need anymore online or at a car boot sale. There are also survey sites which pay you for taking surveys and giving your opinion and focus groups where you can earn cash for trying out different products. There are cash-back apps where you get a rebate on a purchase, and there's an app where you can rent out nearly any of your belongings! you could also rent out your car parking space to commuters, rent a room in your home, rent out your car or you may want to start a side hustle.



If you love animals then you could take up pet sitting or dog walking. If you've got the creative skills then you may want to freelance in your spare time with sites such as Fiverr and Upwork. You may want to start your own online business or become a photographer in your spare time. Whatever it is, there are many ways you can earn some extra cash at home, online or on the side.


It will make you feel less financially stressed knowing that you have some cash savings built up. If you struggle to save then look at your bank statements and what's coming in and going out and ways you can reduce the outgoings. You could set up automatic payments on payday which are added to your savings on a monthly basis. This way you can start saving each month and won't be tempted to spend any money at the end of the month on things you may not really need. However, don't overstretch yourself. Start by saving a small amount each month and then see how much you have at the end of the month. If you have capacity, then increase the amount you are saving the following month. It will all add up in the longer term.


5. Try and remain positive


Feeling anxious is a normal response when you feel financially stressed and it may seem difficult to remain positive. However, having a positive mindset will really help you manage the situation and you can develop a group of trusted friends and family to help you stay optimistic about your finances. Listen to what you are saying to yourself about money and the situation you are in. It can be helpful to write down what you are saying to yourself and then write down an alternative, more helpful way you could be talking to yourself about the situation. How we talk to ourselves has a massive impact on how we are feeling and on our behaviours. Believe that you are capable of getting out of debt or achieving your financial goals and that you just need to start and keep going, one step at a time. Having a plan in place and seeing your progress will make you feel more positive about the situation but be mindful to how you are talking to yourself and practice using positive and encouraging words.


6. Engage in self care



It's important to maintain a healthy lifestyle to help you manage stress. Try to move your body every day as it helps with improving your mood. Keep seeing your friends and try and stick to your normal routine. Make time to relax and do things that make you feel good, such as being with nature, going for a walk, taking a bath. There are also apps such as Headspace and Calm which can help with stress relief. Though your financial stress can overwhelm you, remember that it's important to take time to unwind and connect with others.


7. Ask for help


When some people feel stressed and anxious, they sometimes avoid talking to others. However, the more you talk about your concerns with trusted friends and family, or with someone who can help and support you, the less isolated and stressed you will feel. Your loved ones may even be able to offer a new perspective on what you could do differently to get your money worries under control.


There are some really good resources and organisations out there that can help with money worries. Citizens Advice provides information on benefits, debt and redundancy. The government website - GOV.UK - has information about debt, redundancy, finding a new job and benefits. Money Helper, National Debtline and StepChange Debt Charity all offer helpful advice online on debt. Mental Health & Money Advice offers information and advice for anyone struggling with money because of mental illness, or whose financial situation is affecting their mental health.


If you need help with your mindset around money then please visit my website The Good Money Coach to find out more or send me a message either through social media or on email.


Hopefully these tips will help you reduce your financial stress and get you closer to your goals. If you are still struggling and are feeling worried, anxious or low after a few weeks then it may be worth contacting your GP, if you think it will help. Always be kind to yourself and seek help. Thanks for reading, take care and I'll be back next week with another blog post 🙂.


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