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7 Ways to Reduce Financial Stress

Many people experience financial stress. Here are a few expert suggestions to help ease money worries.

By Carla Fried | American Express Credit Intel Freelance Contributor

5 Min Read | February 1, 2022 in Money



Devising a plan to manage your finances may begin to reduce your stress because it can help you feel more in control.

It may take time to reach your financial goals, but every day brings you closer to achieving them.

It’s the rare household that doesn’t have financial stress. An annual survey of American workers has found nearly six in 10 people saying they were experiencing financial stress in 2021.1

But unlike stress from world events such as the economy and health crises, which are mainly beyond your control, you can tackle your financial stress in concrete ways. Financial stress may be due to a variety of factors – too much debt and too little saved for retirement and emergencies are common worries – but with the right frame of mind and some smart money management strategies, experts say you can begin to ease your financial stress today.  


Tips for How to Deal with Financial Stress

There’s no one-size-fits-all solution for reducing or eliminating financial stress. Following are seven tips worthy of consideration. 


1. Identify What Causes You the Most Stress

Be specific. Creating a ranked list of specific money issues that are stressing you the most can be the foundation of a good plan to reduce financial stress. Keep your list short – too many items may overwhelm – and try framing each with a positive vibe, such as, “I would feel so much better if I did X, Y, and Z.”

If you’re married or in a long-term partnership, consider creating individual lists and then comparing them to see whether you’re on the same page. Disagreements about money can stress a relationship. If you’re having trouble finding common ground and devising a unified plan, consider turning to a financial planner or perhaps even a “financial therapist” – it’s a newly emerging discipline.2


2. Set Yourself Up for Success

Behavioral psychology shows the formal act of committing to a goal by writing it down motivates action. Having someone hold you accountable may also be helpful, providing a sometimes-needed reminder, or “behavioral nudge,” to stick with your goals. You may also consider rewarding yourself – within reason – for sticking to or reaching your goal by spending some money on something that brings you pleasure.


3. Look for Opportunities to Tighten Up Unnecessary Spending 

Laying out all your expenses – such as creating a monthly budget – can help you better understand where your money goes. While it may be possible to identify and eliminate a single line item that on its own relieves your financial stress, you’re more likely to find smaller places where you can trim and save $10, $25, or $50 a month. Examples may be cutting back on food and grocery delivery costs, switching your auto insurance plan, stretching the time between haircuts, or cancelling subscription-based services you no longer use.  


4. Consider Zero-Based Budgeting

Perhaps a fresh approach to the way you prioritize your spending is in order. One option is zero-based budgeting, in which you assign a specific “job” – including savings – to every dollar of your income. Each dollar must be used and accounted for. The goal is that each month the income you bring in, minus the expenses you pay during the month, will net out to zero. If that’s not the case, you’re in control of making the changes to get you there. What expenses might you trim? Or eliminate? Granted, a zero-based budget may take some work, but it can help you take control of your finances and, in turn, relieve stress.


5. Rethink How Much You Borrow

Say you’re looking to borrow money for a mortgage or car. You may qualify for a high amount – and hopefully at a low interest rate if your credit score is high enough. That may sound great in itself, but in the broader context of your other expenses, goals, and stress points, you may be adding to your financial stress. Generally speaking, opting for a less expensive home or car means lower payments and more money to use toward other expenses.


6. Pay Down Your Credit Card Debt  

Paying down high-rate credit card debt can help alleviate stress. If your credit score is in a higher range, you may qualify for a 0% intro APR credit card. This might let you move credit card debt to a new card that doesn’t charge interest, or offers a lower rate than what you have, for an introductory period.

If you have multiple credit cards, another strategy for paying down their debt is to send extra payments on the card that charges the highest interest rate. This “avalanche” method reduces the total amount of interest you pay while reducing your debt. Conversely, you may prefer the quick win of the “snowball” method, which prioritizes the card with the smallest balance before you pay off the next card. Ultimately, which method you choose is a personal decision that will likely hinge on what keeps you motivated and eases your financial stress. If you need a hand getting started, a nonprofit debt management program may be helpful. 


7. Take Credit for What You’ve Accomplished

Whatever financial problems are causing stress, understand they will typically take time to resolve. In the meantime, celebrate that you are on the path toward that goal. Every month you start with a smaller debt load is an important step toward financial security and less stress.   


The Takeaway

Debt can be a big source of financial stress. Reducing both your debt and your financial stress usually involves figuring out what’s worrying you most and then analyzing your current spending to see places you can cut out or cut back. But if you end each month with a little more tucked away in your emergency savings account, you’ve made an important step to reduce your financial stress. And every month you start with a smaller debt load is a step toward greater financial security.   

Carla Fried

Carla Fried is a freelance journalist who has spent her entire career specializing in personal finance. Her work has appeared in The New York Times, Money,, and Consumer Reports, among many other media outlets.


All Credit Intel content is written by freelance authors and commissioned and paid for by American Express. 

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