For many Americans and Canadians, financial concerns are a routine source of stress thanks to an uncertain economy and rising cost of living. Money is a central theme in many of our decisions, from our needs (“Can we pay our bills this month?”) to our wants (“Can we afford that family vacation?”). If you’re constantly worried about meeting your basic physiological needs (food, water, warmth, rest) and safety needs (security, safety), your higher-level needs (see the Figure below) and your well-being will likely suffer.

Maslow’s hierarchy of needs

The goal of financial wellness is to get to a point where both your bottom line and overall health and well-being thrive. To learn more about financial wellness, read our introduction to the topic in our July 2016 issue or follow our Journey to a Healthier You series. This month, we’ll explore sources of financial stress, the negative toll that unmanaged stress can have on your body and how to effectively manage stress.

Sources of Stress: Not Being on the Same Page

First, determine the people who are directly and indirectly involved in your financial decision making. People directly involved have a clear stake in your finances because of shared money and/or expenses. This typically includes a spouse or partner. If these people have different spending/saving habits and financial philosophies, every financial conversation can become an ongoing battle and source of stress. However, if you and your partner can communicate effectively, get on the same page and reach compromises when needed, the relationship can flourish without letting money become an obstacle and source of stress.

Many other situations exist that could also indirectly affect your finances and lead to stressful situations. When other people in your life have an indirect role in your finances, such as a child or other dependent relative, factoring their needs and wants into your own can be an additional source of stress. If you regularly get financial advice from a financial advisor, family member or friend, ask yourself periodically if they have your best interests at heart. Involving too many people in your finances can make it challenging to arrive at the best decision. Consider narrowing the network of people you seek advice from to reduce the excess noise and come to a conclusion you’re comfortable with.

Source of Stress: Analysis Paralysis

Don’t let the fear of making a bad choice keep you from making any choice at all. Do your research, think it through, talk with your partner or other shared decision maker, then make a decision without second guessing yourself and trust your judgment. This can be helpful when it comes to prioritizing how to invest or spend your hard earned money – whether it’s saving for retirement, paying down credit card debt, making extra mortgage payments or simply enjoying yourself.

Source of Stress: Failing to Plan Is Planning to Fail

Unexpected events like medical bills, finding yourself out of work or getting into a car accident that results in you needing to buy a new car can be significant financial stressors. Having an emergency “rainy day fund” – living expenses for three to six months – can help alleviate this stressor. Having up to six months of living expenses saved can seem like an unattainable goal, but don’t beat yourself up; having something is better than nothing. Start with a reserve of a couple weeks, then build up to a month, and so on. This could mean saving as little as $5 a day by bringing lunch to work instead of buying something from the food truck or corner store. Make a budget and see where you have room for savings – the sooner you start to save, the better off you will be.

How Financial Stress Impacts Health

When left unmanaged, these stressors can lead to a variety of health problems ranging from minor to serious. Long-term unmanaged stress can contribute to high blood pressure and hair loss (in both men and women). It can increase your chances of getting type 2 diabetes, gum disease, heart disease and stroke. It can cause headaches, stomach problems, anxiety and depression. It can even worsen irritable bowel syndrome and some skin conditions like eczema.

Learn to Manage Stress

The same stress management techniques and remedies we covered in our March 2015 article, “Overcoming Stress on the Job,” can be used to cope with financial stress as well. Practice good communication skills with your partner and try deep breathing if you get into a tense conversation about spending habits. You can also try engaging in physical activity or meditating to clear your mind if you suffer from analysis paralysis. Consult your doctor or health care professional if the stress becomes too much and causes you to have panic attacks or stomach problems.

The LHSFNA has a stress management toolbox talk and health alerts that provide more information on ways to your manage stress. They can be ordered through the Fund’s online Publications Catalogue or by calling the Health Promotion Division at 202-628-5465.

[Emily Smith is the Health Promotion Division’s Senior Benefit & Wellness Specialist.]