‘I’m Always Worrying’: The Emotional Toll of Financial Stress

For Ellie Alvarado, a teacher and mother of three in Elgin, Ill., figuring out how to pay the bills has become a source of anxiety and tension, especially when she and her husband argue over how to cut back.

“When I say, ‘OK we cannot buy anything this week or else we’ll go into overdraft’ — he says, ‘No, what are you talking about? We’re both working. That shouldn’t happen,’” Ms. Alvarado said.

Soaring food costs have meant no more impromptu trips to McDonald’s. Name-brand cereal and other little luxuries are out, too. Gas prices, which recently hovered around $5 a gallon, are also eating into their budget.

“Every time I fill up our van I’m flabbergasted,” said Ms. Alvarado, who sometimes sees as little as $100 in her family’s checking account. “I’m always worrying,” she added.

Her husband, who works in a factory, decided to take the overnight shift because it pays more per hour. But her family still fell behind on their housing payments.

“I can postpone the mortgage by two weeks,” said Ms. Alvarado, 38, who keeps track of the family’s budget. “But then it becomes two more weeks, and then all of a sudden they’re calling you.”

Inflation has now reached its highest level in 40 years, forcing many families to make do with less. According to data released this month by the Bureau of Labor Statistics, the Consumer Price Index rose 9.1 percent from a year ago, with some of the biggest price increases in necessities like food, rent and gasoline. The added financial stress isn’t just tough on bank accounts, however, it can also bring feelings of depression, shame, anger or fear.

A study of older adults published in 2017 found that the way someone perceives and reacts to financial strain can have implications for their mental well-being. Those who were upset by their economic circumstances were more likely to have higher depression scores than those who were also under financial strain but who were not as bothered by it — even when controlling for other factors, like health and income.

Fortunately, “there is a lot we can do to manage and work through that stress and the emotions,” said the lead author of the paper, Sarah D. Asebedo, director of the School of Financial Planning at Texas Tech University in Lubbock, Texas.

We spoke with financial experts about how to cope with the emotional fallout of money worries and have productive conversations about finances with family members.

Embrace self-reflection and communicate with empathy

When couples disagree on how to handle their finances, each partner usually tries to convince the other to change their mind, said Rick Kahler, a co-founder of the Financial Therapy Association who is collaborating on a book for couples with money problems.

Instead, Mr. Kahler suggested, think about how you’re reacting when you discuss your finances. What’s being triggered from your past? Are there stories or scripts that you live by when it comes to your finances — for example the idea that working hard will always lead to rewards?

Approach your partner with empathy and ask: “What is your hope for spending this money?” Or “What is your fear around cutting this item?” Mr. Kahler said.

Both partners may eventually realize that they want the same thing — for example, that they each want what’s best for their family.

Amanda Clayman, a financial therapist in Los Angeles, noted that, when communicating around differences, any requests should be specific. So rather than saying, “We need to save more,” instead say, “Let’s find ways to save $200 extra dollars each month.” And try to use “I statements” when possible, such as: “I am uncomfortable with how much we pay for entertainment subscriptions and wonder if we can cut there.”

For this to work, Ms. Clayman added, both partners must feel that their needs are being included and that they have equal say in the matter, regardless of who is more anxious or who makes more money.

Spend wisely, but don’t completely deprive yourself

Whether you live by yourself or are managing finances for a large family, it’s important to think about goals before you aim to fix any money problems, said Megan McCoy, a licensed marriage and family therapist who teaches courses in financial planning at Kansas State University.

What are you saving for? What do you need to cover with a limited budget? Write that down. Then think about potential cuts — but try to maintain the things that bring you joy.

Ask yourself: “What can I cut that won’t negatively affect my mental health?” Dr. McCoy said. “I think people tend to restrict too harshly.”

For Sarah Davis, 36, essential (but pricey) expenses include mental health therapy and her beloved cat, who has developed health problems.

“He’s like my little furry child,” she said.

To better afford such things, she left Boston, where she works as a project administrator, and now lives about 25 miles north of the city in Lawrence, Mass. Rent is cheaper there, she said, but still “nauseatingly expensive.”

What keeps her up at night is the possibility of something going wrong, and not knowing how long prices will continue to rise.

“I really am one bad tire replacement away from being in dire financial straits,” said Ms. Davis, who lives by herself without another income to rely on.

There has been so much uncertainty over the last couple of years, it “perpetually creates anxiety,” Dr. McCoy said. But having a plan that you’re working toward — whether it’s building up your savings or taking steps to pay off debt — can offer a sense of power and control.

Orly Hersh and her family made the decision to move in with her mother five years ago, in the house where she grew up in Boulder, Colo. It allowed her mother to age in place, and for them to stay in the town they loved. She and her husband, who are both teachers, cannot afford to become homeowners.

“It’s a great mutual benefit to all of us,” said Ms. Hersh, 53, a mother of two.

Although they save money on housing costs, Colorado currently has some of the highest inflation costs in the nation and rising prices have taken a big bite out of their budget. To pay the bills from her youngest daughter’s recent hospital admission, they will need to dip into Ms. Hersh’s retirement fund, “which is depressing,” she said.

But, she added, it’s better for her stress level to pay it off as soon as possible. “I really hate to have this debt hanging over my head,” she said.

Explore different types of professional help

Seeing a financial counselor can be helpful for anyone seeking to gain financial literacy. Perhaps, for example, you need tips on making a budget or want to learn the basics of investing. If cost is a concern, the Association for Financial Counseling and Planning Education is offering a free virtual financial coaching session to anyone experiencing financial uncertainty.

Financial therapy is another type of counseling that can aid people in understanding their thoughts and beliefs around money, especially when they’re feeling stuck.

“The question becomes: What’s going on internally? What unfinished business from the past needs to be finished?” Mr. Kahler said.

For example, one of his clients insisted on spending all of the money that came into his checking account. During financial therapy he realized that he had developed this behavior because he did not trust that his money would be safe if he set it aside. This stemmed, in part, from his childhood, when his parents had taken all of the money out of his savings account after having lost their own money during a bankruptcy.

Speaking with a financial therapist can help people get to the root of their feelings about money and understand long-held beliefs, which “frees us up to start adopting new behaviors that are in our best interest,” Mr. Kahler said.

A troubling economic outlook means the rising cost of living is largely beyond our control. But if you know that you should be making wiser financial decisions, and you’re not doing it, then “that’s when we’ve got to look under the hood,” he said.