What is financial stress? (2024)

Also in this topic:

• Practical things you can do right now to manage financial stress
• Long-term strategies to manage stress and improve your finances
• Tools and apps and support services for financial stress
• Information for friends and family

If you've ever felt worried, scared, or helpless about your financial situation, then it’s likely you’ve experienced financial stress. But you’re not alone. Studies show most people will face financial stress at least once in their lives.

Financial stress can show up in many different ways, but in general, it relates to any stress you feel as a result of your financial situation. Some examples include:

• Finding it hard to keep up with living expenses, such as rental or mortgage payments, utility bills, and groceries
• Missing loan and credit card repayments
• Having to cover unexpected expenses.

Financial stress and mental health are closely related and can directly affect one another. Financial stress can have a negative impact on your mental health, and at the same time, poor mental health can make financial stress worse. So, it's important to find ways to manage stress and work on improving your financial situation.

How common is financial stress?

Financial stress is more common than you might think.

Recent inflation and interest rate rises are putting increasing stress on Australians' hip pockets. In fact, 1 in 4 Australians are finding it hard to get by on their current income.

If you’re dealing with financial stress, you’re not alone.

How are financial stress and mental health related?

If we are experiencing financial stress in our lives, it’s understandable that we will likely not be our happiest, most positive and productive selves. And while sometimes these things may resolve as quickly as they appear, many people who have experienced financial stress also reported experiencing mental health conditions, such as depression, anxiety, and substance misuse.

Not only can financial stress lead to mental health conditions, but it can also make existing ones worse. At the same time, having a mental health condition can make financial stress worse because it can affect your ability to manage stress effectively.

Who does financial stress affect?

Financial stress can affect anyone at anytime. Our socio-economic background, education level and even our income level do not make us immune to financial stress.

Financial stress isn’t always related to how much money we have. Sometimes people with more money can feel distressed due to making bigger financial commitments or at the prospect of losing things they’ve always had.

But some groups of people might be more vulnerable to financial stress than others:

• People who earn low or unstable income

  If you earn a low or unstable income, you might find it hard to cover your basic living costs from month to month. Financial uncertainty can also mean other events that have a financial impact (like getting sick, accidents, moving house, deaths in the family, and many others) are more likely to affect your ability to put food on the table and have a roof over your head, which can make you worried and stressed.

• Students

  See Also

  What is financial trauma?

• Older adults

• Single parents

• Being unemployed

• Small business owners

• Women

When is financial stress a problem?

Financial stress can become a problem if you notice that it’s having a negative effect on your mood, your thoughts are consumed by your current financial situation, or it affects how you show up on a daily basis - you just don’t feel yourself.

Here are some signs of financial stress that you should look out for:

• You feel overwhelmed by your financial situation and worry about it constantly
• You have been feeling financially stressed for a long time, and your financial situation is not improving
• Your financial situation has led to feelings of hopelessness and worthlessness
• You've started using unhealthy coping strategies, such as drinking or taking substances to cope with financial stress
• You’re avoiding your financial problems, for example, never checking your bank balance.

If this sounds like you, you can try out some of the short-term and long-term strategies we've put together to help you cope with financial stress. Our tips are practical, easy to apply, and can help you on your journey towards financial stability.