A man and woman discussing their bills and dealing with the effects of financial stress.

What are the Effects of Financial Stress?

Last week I talked about what financial stress is. Today we’ll explore the effects on financial stress on families, relationships and mental health. It can happen to people of any income, old or young, even the smartest of us. But no matter your situation, know that you’re not alone.

Poverty can be traumatic.

Poverty is unpredictable, exhausting, and frequently treated as shameful. It’s a “chronic stressor,” so even when you aren’t being harassed by bill collectors and you do have food on the table, you never really feel secure. Poverty increases a person’s risk of physical and mental illness, and makes it harder to get healthcare.

Many of my clients who grew up in poverty report that they still worry about money, even if they’re now financially secure. Others feel guilty about spending money, even on things that make them happy or healthier. It’s difficult to talk about, especially if most of your friends or family haven’t been there, so this kind of trauma can be very isolating.

The effects of financial stress are generational.

Most of us learn how to think about money by watching our parents. If your parents worried about how they’d pay the bills, you may worry the same way. Children who notice their parents’ financial stress often avoid asking for things because they don’t want to be a burden on their parents.

This problem gets bigger if your family has low “financial literacy.” That’s the ability to understand and use money to achieve your goals. Low financial literacy doesn’t mean someone’s unintelligent. It just means they haven’t had the chance to learn these skills. You may have a harder time with money if your family wasn’t able to teach it to you. But just like other learned habits, this is something you can improve.

Financial anxiety

Although financial stress hits low-income people the hardest, it can affect people of all social classes. In particular, anxiety often manifests through how we handle our money. Money represents different things to different people: freedom, security, hope, despair, social acceptance, guilt, self-worth, and more.

Think about what money represents to you. Is it something to save up in case of emergency? Is it a little bit of breathing room, a relief? What do you feel okay about purchasing, and what makes you feel guilty or irritated? How much time do you want to spend thinking about money, and how will you know when you have enough? What will you do if you have enough?

These questions get complicated quickly. My clients find that discussing it in therapy helps them figure out their core values, and to overcome their deeper fears. It’s hard work, but rewarding.

Relationship tension

Another form of financial stress happens when two people in a family have different ideas of how money should be used. Perhaps one spouse thinks they should be more careful with what they spend. But their partner thinks they both need a better quality of life. Maybe a parent wants an adult child to start paying rent while at home – or a child is tired of bailing their parent out of debt.

With “money” as one of the top reasons couples split up, it’s worth talking to your partner early on about how they view money, and what kind of lifestyle they want. Explore what money represents for each of you. Often, disagreements over money stem from deeper worries or needs.

Effects of financial stress on mental illness

One of the toughest effects of financial stress is that it makes every other problem in your life harder. It’s harder to afford doctor visits, medication or therapy if money is tight. Even if you logically know you have “enough,” money can become another reason for your brain to worry excessively. It may also exacerbate feelings of shame, guilt, low self-worth, or feeling “unproductive.” People with addictions often struggle with financial stress, too – and the financial stress can make addiction worse.

If you need therapy but money is tight, check out FindHelp.org or Open Path Collective. It’s better to start looking early than to wait until you’re overwhelmed, because many low-cost providers have waitlists. I also counsel clients for financial stress, and have a limited number of sliding-scale appointments for people in need. Contact me if you’re interested, or check out my next article on ways to manage your financial stress!