This post is by our regular contributor, Erin.
We all know that money causes stress. More money, more problems, right?
The inverse is true, too: already existing stress can wreck havoc on your finances if you’re not careful.
When you’re stressed out, money is generally the last thing you’re thinking about (unless the source of stress is related to money). That can cause a few things to fall through the cracks, such as your spending, recently established good financial habits, and due dates.
It’s helpful to be aware of how stress can mess with your finances so you can prevent it from happening in the first place. If you find yourself stressed out often, then read on for solutions.
1) Buy More Food
How many of you eat more when you’re under an insane amount of stress? For some, food is comforting, and it’s one of the first thing we reach for when things go wrong.
It makes sense that your grocery budget can go out the window when you’re under stress, especially if you don’t feel like cooking. Buying microwaveable meals, resorting to fast food, or buying tubs of ice cream can leave your bank account (and stomach) hurting.
Think about it – how likely are you to stick to a list – or even want to make a list – when you’re stressed? You probably can’t sit still enough to look through circulars, or dedicate the energy to it.
What you can do: Even if you’re not making a list, at the very least, stick to buying what’s on sale. You can also create a list of “easy” meals that are quick to put together so shopping and cooking isn’t a hassle. Keep your pantry stocked and try to freeze meals to have them ready to go during hectic times.
2) Give Into Bad Habits
As if eating anything and everything wasn’t bad enough, the other things that fall by the wayside when you’re stressed are good habits you’ve been working on establishing. No surprise, as your motivation is lower and the habit isn’t fully ingrained yet.
For example, say you’ve been trying to get into the habit of purchasing things with cash because you’re trying to pay off credit card debt. But because you’re so stressed, you forget to go to the ATM, need to go out to buy something, and end up charging a purchase instead. That can result in you giving up the cash budget all together.
Worse, what if you’re prone to drinking or smoking when things start to go wrong? Those are both fairly expensive habits to fund, not to mention they won’t do your health much good. Also, you’re not likely to make smart financial decisions when drunk. Just saying.
What you can do: Having a strong “why” can help you stick to your guns when you’re nearing the end of your rope. Make sure you have one to refer back to!
3) Impulse Purchases
Along the same lines, if you’re a natural spender, you might find yourself making impulse purchases when under stress. This is especially true if emotional times are a spending trigger for you.
Do you tend to shop when you’re feeling down as an escape? Or do you make purchases to help yourself feel better about a negative situation? You’re at risk of making snap decisions with your money when near temptation.
What you can do: Make a list of your spending weaknesses when you have a clear head so you know to avoid them at all costs when you’re under stress.
4) Increased Health Costs
It’s safe to say we all know stress damages our health, and when there’s a cost to our health, a monetary cost usually accompanies it.
That can come in the form of co-payments for doctor visits, paying for medication (stocking up on aspirin for headaches), taking sick days from work and possibly not getting paid, or even getting fired because you’re not able to work at full capacity.
What you can do: Make a plan for dealing with stress in a productive way and don’t be afraid to put yourself first. If you can, find better ways to cope with things. Gratitude has always helped me with this!
5) Missing Payments
Being under a lot of stress can make missing a payment extremely easy, especially if you’re not enrolled in autopay and don’t have reminders set up. What if you forget to look at your calendar, or are so busy it completely slips your mind that it’s the first of the month and rent is due?
You don’t want to find yourself in this situation; if you don’t catch your mistake and pay late, your credit score can potentially suffer.
What you can do: Enroll in autopay, set up reminders, and have it written down somewhere in case technology fails. If it’s a one-time payment, like a ticket, pay it as soon as you get it (if you can).
6) Bad Investment Decisions
Stress can lead to making bad investment decisions, too. If you’re stressed about losses, certain stocks not performing well, or the market crashing, you might react on instinct. You shouldn’t make split-second investment decisions.
It’s normal to be concerned about the performance of your portfolio, but don’t sweat the little things. The market will go through periods of volatility. Being on the younger side, you have plenty of time to ride it out and recoup any losses you may experience.
What you can do: Always invest with a plan and a goal so you can stick to it throughout the highs and lows and evaluate changes objectively.
7) Budget Backfiring
As I said at the beginning, a lot of times, money is the cause of our stress. You could unknowingly be putting yourself under financial stress.
I made this mistake when I tried sticking to a strict budget last year. I’m already fairly frugal by nature, but I wanted to make sure I was keeping my expenses in check. Unfortunately, that led to a lot of stress whenever I went over my budget.
I had enough savings, and I technically had enough room to go over a bit in any category. However, going over $10 would kill my spirits (I’m a bit of a perfectionist). I eventually stopped budgeting so I could stop getting caught up in the numbers.
Sadly, many people make the mistake of trying to stick to an unrealistic budget, or they try and go cold turkey on spending in certain areas. You never want to set yourself up for financial failure by making drastic changes. That’s an instant recipe for stress (and disaster).
What you can do: Be realistic and honest with yourself! Don’t set crazy high expectations your first time trying something. If you were a brand new runner, would you immediately try to complete a half marathon? No! The same applies here. Be forgiving and recognize that personal finance requires a lot of experimenting.
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Stress can impact our finances in ways we might not realize. You can safeguard your money from the nasty affects of stress by putting plans in place before it strikes. Being aware of how you react to stress is helpful, too.
Has stress ever created financial chaos for you? How did you deal with it? How do you deal with stress and money now?
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Unrealistic budget can definitely set you up for failure, that’s why I think it is good to track your spending first in order to know how much you normally spend money. Previously I’ve been trying to cut back on too many categories at the same time and gotten stressed out about not reaching my unrealistic goals. Nowadays I show a bit more grace towards myself and try to tackle only one issue at a time :)
One of the big stress reducers for us was getting a handle on our finances. Once we did that we had better focus in other areas of our life, and were better able to deal with those issues and associated stresses.
Impulse purchases are what I have to watch out for. I like to shop when I’m stressed. Knowing this, I avoid it, now. But years ago, that was not the case!
Stress can certainly mess with your finances, and, in an unfortunate and vicious cycle, worrying about your finances can definitely mess with your stress levels and, as you point out, with your health. I think it’s unfortunate that the connection between stress/anxiety/health and debt/finances is not often pointed out, because it’s a real thing, and sometimes it’s not easy to see the connection clearly. These are really good points, especially increased healthcare costs and impulse shopping — those two can really add up quickly.
We were a lot more stressed out when we worked in 9-5 jobs and made a lot of impulse purchases because of it. Mostly, we were just short on time and couldn’t always make the best decisions. It helps to be self-employed because we are less stressed on a daily basis and have a whole lot more time to plan how we spend our money.
I agree that it’s all too easy to slip in the food department when we’re stressed and busy. Sometimes we are running around so much that it’s impossible to avoid all fast food stops, even with packing sandwiches, etc. We have accepted that this is part of the busy periods, and that a little extra spending in this otherwise frugal area of our lives is worth doing the things we want during those busy weekends.
The budget is the first thing to go when I am under a lot of stress. That is also when I tend to eat takeout, which is never in my food budget.
The big stressors for us really occurred when we were in our 9-5 jobs. We had less time, were in a different place financially and would get ourselves into trouble. Not that we’re perfect now, by any means, but having more control over our time and seeing that direct correlation between the money we spend and knowing what it takes to create that money has really helped us be more mindful in our spending.
Mrs DN So glad to hear that! Sounds like we had a similar issue. I like to categorize and organize things a bit too much, and that can certainly get in the way of experiencing success with a budget.
DebtDiscipline A lot of people are afraid to face the numbers, but once you do, you know you’re in control and have the power to change your situation. Great example of that!
Financegirl I’m sure most of us have a few unhealthy habits we turn to when we’re stressed that can impact us financially!
theYachtless The connection between stress and money is totally real! I don’t think most people realize how much they’re stressed out because of their financial situation. Probably due to the fact they’re trying to bury their head in the sand…which only increases their stress. Definitely a vicious cycle people need to be aware of.
holly@clubthrifty.com Interesting! I can see how lack of time plays a factor in making snap decisions. Not everyone has the luxury of having the time to sit and plan out major purchases or anticipate when things will come up.
Pretend to Be Poor Acceptance can be a good thing in certain situations. I know I’ve been there. I’d rather not spend money on certain things if I can avoid it (like fast food), but there are times in everyone’s life when that’s just not possible. We can’t be perfect!
houseoftre I think it’s a problem a lot of people have! Stress takes up a lot of mental energy and we’re prone to turning to the most convenient options, which tend to be the pricier ones.
FrugalRules I love that point, John! I think the same has happened to me as well. I didn’t value my time nearly as much when I was working for an employer, but now I do, and I have a better idea of what it takes (on my part) to afford something.
I’m a stress-ridden person by nature. I’m slowly learning to cool my jets on that front and just take things as they come. It leads to fewer impulse/”I don’t want to argue with my husband’s impulse” purchases. But it’s always a process.
Good tips, Erin! Stress can definitely wreak a lot of havoc on us financially. I’m definitely not impervious to it either, which is why exercise is such an important value to me. It really does help alleviate stress for me and help me avoid easing it through spending or eating. I also found meditating mid-day has also helped me reduce stress and stay grounded.
AbigailP I am, too! It’s definitely a process, but I think I’ve made a decent amount in just the last year. It’s hard to take things as they come, but I know I can’t control for everything, so there’s no sense in getting up in arms about it beforehand.
ShannonRyan Meditating and exercise is on my list of things I need to incorporate more of in my life. It’s so important to have other outlets for stress-release, otherwise it’s too easy to turn to destructive habits!
Great tips! I’ve recently reworked my entire meal rotation to deal with the fact that toddlers make the worst cooking companions. My son’s whining around dinner time was leading to more eating out and less healthy foods. Now, I’ve got 10 meals in rotation that can actually be prepared in advance or in 15 minutes or less. Granted 5 of those meals are stir-fry, but at least its progress.
I used to make impulse purchases when I was stressed and ‘retail therapy’ became the norm for me. I kicked that habit to the curb though when I started a shopping ban for 6 months and let it carry into 8 or 9 months. I still eat when I’m stressed out though, so I need to work on that.
Hannah UnplannedFinance That’s amazing, Hannah! Perfect example of how we can identify our stressors and plan a workaround. I have some easy go-to meals that aren’t absolutely perfect either, but I agree that progress counts!
Chonce I’m pretty sure most of us have a natural inclination to eat when we’re stressed. It’s too easy to turn to comfort food! I’m trying to limit what I have in the house…if it’s not there, I can’t eat it, and I probably won’t go out to get it (especially now that it’s colder!).
When I am really stressed out, I tend to spend more money eating out. I love a good happy hour or dinner out and when I’m feeling stressed, I definitely find myself suggesting them more often than not.
I have had a really stressful couple of weeks that resulted in getting a cold and forgetting a ton of stuff I never forget, like not having milk for my kiddo in the morning. My best stress remedy is sleep and exercise, although I sometimes don’t sleep well when I’m stressed, a vicious cycle for sure!
I think I’ve done all of those things except maybe making bad investment decisions. When I’m stressed it usually means i’m busy…to busy so I don’t update my receipts into my budget spreadsheet, and if I don’t do it regularly I have a tendency to not monitor things as much to control cash flow. I’m there this week. lol! It’s kind of good stress, but stress nonetheless.
blonde_finance It makes sense to go for things that will make you happy when you’re having a bad day. It’s good that you’ve recognized that, though – not knowing your triggers is worse!
Eyesonthedollar I hear you on that – sleep rarely comes easily for me, and it’s much worse when you have a lot of things you’re trying to keep track of. Sleep and exercise and generally taking care of yourself is a good way to cope!
Beachbudget That’s how it is for me, too. The busier I am, the more stressed I am, and the more likely things are to slip through the cracks. That’s why I’ve tried to automate things as much as possible. When I tried budgeting, I noticed very quickly that being busy meant not entering my transactions into a spreadsheet!
Oh goodness, I feel like I’ve been read and exposed because all of the above apply! Especially the food. I just wrote today on a few money habits I would like to kill in 2016 and one of them was “eating my money”. I’m very much an emotional eater and when I get stressed, the first thing I want to do is reach for something to chew on. It’s so easy to fall into this trap.
The best way I’ve managed to deal with my stress is through a better diet (ironically)! When I’m eating meat/vegetables and laying off the carbs, my moods are much better. I have mental clarity and don’t find myself stressing out about the little things. Oh and laying off the sweets too:)
This is such a great post. You are really an amazing writer, Erin. I’m taking notes:) Thanks!
lifeandabudget I like the phrase “eating my money”! I agree that it’s easy to do. I’m not so much an emotional eater, but I do tend to snack when I get bored. Not good! I’m with you 100% on needing to have a better diet. We function better when we eat well.
Thank you! I’m glad you enjoyed it. =)
I’m totally guilty of buying more junk for when I’ve had a bad day!!