financial stress

7 Tips to Cope with Financial Stress and Improve Financial Health

Financial stress occurs when a person feels worried and anxious due to problems related to money or their financial situation. People in Singapore, on average, have suffered more from financial stress than people in other places around the globe, according to The Independent survey

Anxiety, guilt, depression, and other mental health challenges intertwine with the physical symptoms, creating a cycle that can seem difficult to break.

It’s worth noting that financial stress isn’t limited to a singular cause. The fear of income loss, unexpected financial burdens, and even the uncertainties surrounding retirement planning can all contribute to this pervasive issue.

As we delve deeper into understanding the various aspects of financial stress, let’s explore the strategies and tools available to mitigate its impact and pave the way toward a healthier financial outlook.

How Does Financial Stress Impact Your Health?

According to this 2022 report, 86% of Singapore respondents suffer from various stresses, and 15% struggle to cope with them. The top stressors in the city are the rising cost of living, like fuel and utilities (50% of people surveyed), uncertainty about the future (38%), personal finance (35%), and family finance (22%). Stress sources almost always come from financial matter related.

More than that, the report shows only 20% of respondents are “confident about their current financial situation or ability to finance their own/family’s medical needs.” 

Using the “Cigna 360 Well-Being Index” to track 5 dimensions, including Work, Family, Social, Physical, and Finance, and compare with APAC (East Asia, Southeast Asia, Oceania), Cigna finds Singapore ranks the lowest across all dimensions regionally and globally. The lowest score implies Singaporeans undergo the worst financial stress concerning the five aspects.

Financial stress on your mental health

‘When money and financial concerns cause ongoing stress in your life, you could eventually begin to experience some feelings of anxiety as a result,” according to Healthline. Mental problems due to financial stress can affect your life and work when you struggle to bring financial matters and others into the proper place daily. Pressure from handling finances may give rise to the following: 

  • Anxiety: You may worry about not having enough money to pay bills, increasing debt, or even fear losing your job. The symptoms include feelings of worry, unease, and nervousness. 

Financial anxiety can lead to sleeping disorders, such as wake-ups in the middle of the night or a lack of in-depth sleep. Persistent sleeping conditions affect your health and life.

  • Depression: People struggling with debt are more likely to suffer from depression. Like anxiety, they may develop feelings of hopelessness and sadness, contributing to depression. 

Common symptoms of depression include difficulty concentrating, feeling helpless, changes in appetite, a loss of interest in regular activities, and thoughts of suicide.

You should not ignore the depression problem as it may disrupt your life and health, and seeking professional help is the best consideration.

  • Social retreat: Financial worries may seclude you from family, friends, and colleagues. You are more reluctant to communicate with your family and friends for fear of losing dignity and sharing your money worries, and you become more isolated. Social retreats will only make the mental situation worse than ever.
  • Abnormal behavior: Personal financial problems may turn one into radical behavior. You may indulge in risky activities like gambling, drinking, drug abuse, or overeating. Most of these dangerous activities caused by desperation can further deteriorate a person’s already poor mental health. 

Frequent and extreme financial stress not only ruin your mental health but also cause harm to your body. The following symptoms on your body could possibly come from your financial concerns.

  • Headaches: Financial stress can cause migraines and headaches. When under financial pressure, your body releases hormones that lead to pain and inflammation, causing headaches and migraines.
  • Heart distress: Frequent money concerns can cause heart disease symptoms like headaches. Under pressure, the body releases harmful hormones, increasing heart rates and blood pressure. Irregular heart rates and blood stress may strain your heart.
  • Gastrointestinal disease: Extreme financial concerns may cause constipation, diarrhea, nausea, and vomiting. Under stress, your circulation system redirects blood from your digestive system to other body parts like the brain or heart, causing gastrointestinal issues.
  • Sleep difficulties: Financial stress can create a painful sleep dilemma. Your mind might be filled with financial concerns, making in-depth and healthy sleep difficult. Besides, hormones released by your body can make it hard to fall asleep.
  • Weight gain or loss: You can increase or lose weight, either. It depends on how you react to financial stress. Faced with financial problems, some people may overeat, resulting in digestive disorders. Some may lose their appetite, causing severe eating problems.
  • Weakened immune system: Financial stress can weaken your immune system, causing your body to be more susceptible to the virus. Besides, pressure can curb white blood cell production, helping fight infections.
  • Fatigue: You get tired or fatigued without reason under financial stress, even after a good sleep. The fatigue makes it hard to concentrate and work. What’s more, the stress may cause metabolism to change and lead to more fatigue.

How to Reduce Financial Stress

Prevention is better than cure. The best option for you is to reduce your financial stress, even if it seems impossible to eliminate it. The following steps can alleviate your financial stress:

1. Prioritize what you can control about your spending

You might not contain all expenses, but you can reduce some spending to improve your financial situation. For example, look at your entertainment expenses. Money saved by reducing the monthly frequency of dining at restaurants or go-to-movie might be enough to pay off your credit card debt.

Due to high inflation, food prices are becoming a significant part of your spending. It is time to review your food budget. Choosing store groceries from store brands can save money rather than name brands. You may not notice a few dollars spared at each shop. The small savings may reduce your food bills or pay off your other debt.

Fuel prices are another expense you can control if you have a car. Use public transport, like food or entertainment bills, more than your car when necessary. You may be surprised to see reduced fuel costs reduce your overall debt.

2. Create a monthly budget

A monthly budget assists you in controlling your expenses and improving your financial health. The budget gives you a roadmap for using your income and expenses to reach your goals and reduce stress.

Below are two easy steps to creating a monthly budget:

  • Collect your income sources and expenses: First, determine where the income comes from and how much income you can gather monthly. The income scenario gives you an idea of what you will spend for the month. You can track the sources by looking at your salary slips, bank accounts, credit card statements, and pay stubs.
  • Categorize your expenses: Once you collect your income and expenses, the next step is to categorize the expenses. Classifying your spending helps you review your expenses and make a pragmatic budget for your spending pattern. 

Here is a popular way to categorize your spending:

  • Debt payments
  • Foods
  • Entertainment
  • Housing
  • Personal care
  • Transportation
  • Utilities
  • Others

Besides setting a monthly budget, you should 1. Set financial goals to reduce your financial goals and enhance your financial health, 2. Make sure your spending keeps your activities on track, 3. Review and adjust your plans as necessary.

financial stress

3. Find ways to earn more money

Besides cutting your expenses, increasing your income is another viable option to lessen your financial stress and enhance your disposable income, countering high inflation.

Consider the following ideas to grow your i

ncome base:

  • Start an income gig: A side hustle complements your income from your current job, relieving your financial burden caused by spending or other. Popular gigs are freelancing, driving for rideshare companies, or selling goods online. 

Learning a new skill is the best way to start your income gig if you do not have one. Besides, allocate how many resources you can to a new gig or business and adhere to the plan.

  • Negotiate for extra working hours or a raise in pay by expanding job duties: Discuss your plan with your employer and ask for his consideration in increasing your salary. Your boss may consent to your proposal and save some costs by maintaining current work counts and permitting more work and pay instead.
  • Start a new business: A new adventure may fit your long-term goals and style. A self-owned business may increase your wealth and financial freedom for the future, achieving your financial self-sufficiency and financial worry-free. Yet, every business venture involves risks. Prudent psychological planning is necessary for starting a new business.

See Also: Small Business Ideas in Singapore

4. Pay essential bills

Tight budgets and high inflation can make ends meet, particularly when paying your bills. Here are the steps to prioritize your expenses by paying essential bills:

  • List your essential bills: They include mortgage payments, car payments, utilities, children’s education fees, and insurance payments.
  • Prioritize your bills: Pay the prioritized bills first. Under a tight budget, timely payment leads to extra fees and penalties. A minimum payment for your credit card debt reduces your additional interest charges and maintains your credit score.
  • Talk to your creditor: It may be a pragmatic option to talk to your lenders about a workable solution to your debt. Your creditors may make concessions to recoup loans, and you can reduce your financial stress.

5. Track your money-saving progress

Once you set a budget to alleviate your financial stress, tracking your progress becomes more essential than ever to reaching your goals. Following the money gets you the know-how of where your emergency fund or other accounts are going, ins or outs, and helps you cut your expenses. Some apps, like spreadsheets, budgeting apps, or notes, assist in doing the job.

  • Set up automatic transfers: Automatic transfers can relieve your workload when repaying debt or bills. You can create a regular transfer program with your creditors to save your efforts by instructing banks to move specified funds from your bank balance to your creditors.
  • Celebrate milestones: Review your progress regularly and celebrate when you reach realistic goals on the path. You celebrate your achievements to motivate you to keep your plan going once you set your milestones. Stay flexible on your money-saving schedule, for example, by increasing your debt repayment due to a pay rise or reducing expenses owing to a job loss.

6. Practice mindfulness

Emotional intelligence (EQ) calms you when tackling financial difficulties. Follow these ideas for reducing financial stress:

  • Take deep breaths: Under financial stress, your body and mind are in a high emotional state, like nervousness and fear, making it hard to reason. Taking deep breaths helps relax your body and mind and reduce financial anxiety.
  • Critical of your negative thoughts: During financial stress, it isn’t unusual to have negative thoughts about yourself, your financial situation, and the future. Yet it is crucial to challenge these thoughts in an unstable emotional state. Learn: to calm yourself and seek solutions to problems step by step.
  • Practice accepting yourself: Knowing that financial stress is a part of life, you can start accepting yourself and finding ways to get out of the challenge. Practice acknowledging yourself, which helps you better cope with financial stress.

7. Talk to a lender or consult with an expert financial advisor

A direct and honest talk with your lender may help him better understand your financial situation and work with you to devise a repayment proposal. Besides, Confidential financial counseling with a financial advisor may help you with the following:

  1. Negotiate with lenders: A financial advisor uses his expertise to negotiate terms with lenders and craves a repayment proposal favorable to you, including lower interest payments and more extended payment periods.
  2. Emotional support: Financial stress is a painful personal experience. A financial advisor can provide you with emotional backing, like psychological relief and motivation, aside from technical assistance, for example, debt restructuring, lower interest rates, and longer repayment time.

*The information is cited from “7 Ways to Manage Financial Stress During Trying Times” by Bankrate.


You are better positioned to resolve financial problems when you can relieve your financial stress. Financial stress causes mental and physical diseases, even endangering your life if not confronted and solved correctly and in time. 

To mitigate financial stress, it’s important to take proactive steps:

  • Cut unnecessary expenses and review spending habits.
  • Organize income and expenses to reach financial goals and reduce stress.
  • Pursue side gigs, negotiate for raises, or start a business.
  • Prioritize and manage essential payments to avoid penalties.
  • Monitor budget and financial goals, celebrating milestones.

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