5 Causes of Financial Stress

Financial stress involves anxiety, fear, or worry about money. You may have financial stress if you’re constantly arguing with your loved ones about money, struggling to support your family, income being less than your expenses, receiving debt recovery legal action, or high loan or credit card loans. It may even lead to physical symptoms, including fatigue, headaches, insomnia, and others. While financial stress may be unavoidable, understanding its triggers can help you find ways to cope. Here are five causes of financial stress.

1. Reduced or loss of income

Anybody can experience an unexpected income drop at any time. Sudden unemployment resulting from getting laid off or fired and your employer getting out of business can leave you financially stressed. Severe economic crises and other circumstances can compel you to take substantial pay cuts or remain unemployed.

Without a savings plan or financial backup, you may struggle to pay even the most basic bills and expenses, including food, utilities, and housing. With the help of family benefit programs provided by governments and other institutions, you can relieve your financial challenges and eventually stress, especially if you’re a low-income earner or unemployed.

2. Divorce

Divorce forces you to accept and make decisions that significantly impact your future financial stability. The financial assets, money, debt, and possessions acquired during your union are divided between the divorcing spouses. This means they might need an income increase to maintain the same living standards they had before the divorce.

Consider talking to a divorce lawyer to determine what you can do to safeguard your financial interests. You can also agree with your former spouse to end things civilly because the contentious way may strain you financially, causing financial stress.

3. Paying off debts

Debts are among the most significant causes of financial stress, especially if your income source is unstable or you haven’t planned your finances well. Money shortage may result in increased financial strain while negatively impacting your emotional health, including stress, anxiety, anger, and denial.

Financial stress resulting from debts may negatively impact your blood pressure, immune system function, heart rate, mood, memory, and weight loss or gain, which could have heart health or blood pressure implications. Allowing debts to pile up and interests to accumulate can sink you into deep financial stress. Consider paying your debts on time to avoid money-related stress.

4. Unexpected expenses

Unexpected expenses are those you haven’t planned for or know about. They may include medical fees, car repair costs, emergency home repairs, and more. Failure to prepare for such expenses can knock you off your financial track, causing stress. Consider budgeting for sudden or unexpected expenses by making a list of the common ones and tallying the amounts, then saving a portion every month. This can help cater to unanticipated expenses, protecting you from the associated financial stress.

5. Poor financial management

Failure to manage finances well may result in financial stress, even for high-income earners. Expenses, including credit card bills, may increase, resulting in financial struggles. Consider budgeting your money well to avoid mismanagement. You may also talk to a financial advisor for advice on the best money management practices to improve your financial health.

Endnote

Financial stress significantly impacts mental, emotional, and even physical health. Understanding its causes makes it easier to find ways to cope with it while trying to improve your situation.