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Tips for managing financial stress

Whatever your circumstances, overcoming financial stress takes patience, discipline, and self-care. You don’t have to go through tough times alone.

June 2021 – 5 minute read

What’s in this article:

  • Managing financial stress
  • Eliminating debt
  • Regaining control of finances


Sometimes, for one reason or another, we may find ourselves with a large amount of debt. The burden of trying to make ends meet and the thought that you’ll never be able to escape debt can be an overwhelming and stressful one. Getting out of financial debt takes time, discipline, and patience, but most importantly, you need to be able to look after yourself and learn how to manage the stress.

Some people accumulate debt due to medical expenses, vehicle loans, home loan repayments or simply overindulging on credit cards. But the one commonality among all cases of debt – is psychological stress.

Dealing with debt stress

Debt stress can trigger many severe symptoms of anxiety, stress, depression and other health problems, no matter age or socioeconomic status. Many debt holders find themselves in a seemingly inescapable mental state revolving around thoughts about how to make payments to maintain their livelihood.

Unsurprisingly, financial stress can lead to issues like sleep disorders, migraines, anxiety, and a general depleted mental state. If you are experiencing health issues because of your stress, you should contact your GP or you can access mental health resources.

How to overcome financial stress

The good news is that you can learn to deal with the mental stress of money issues, and many people are able to get out of debt with patience and discipline. Here are some basic tips about how to deal with financial stress.

Financial stress and mental health

Perhaps most importantly, think carefully about how you are taking care of your mental and physical health. Here are some things to consider:

Are you eating enough and consuming healthy foods? A poor diet can lead to health problems and further expenses.

Are you getting enough sleep? Adequate rest is essential for you to maintain mental clarity and cognitive function.

Are you exercising regularly? Getting regular exercise often helps to clear your head and will boost your mental health.

It's important that you take steps to lower your stress levels, to help take actions to improve your financial situation and feel more in control. Improving your mental and physical condition is the most important step in reaching your financial wellness goals. Once you are in the correct space, you can start to think of solutions.

Make a start on eliminating your debt

If you haven’t already, identify the cause of your debt and prevent it. This is especially true if you are dealing with debt for avoidable reasons, like overspending on indulgences.

Understanding the underlying motivations for our consumerist behaviours is very valuable, not only because it can help rid us of money stress, but it can also be an opportunity to develop healthy habits and eliminate bad ones.

Take ownership of your situation

Dramatising the consequences of poor financial management and victimising ourselves because of the decisions we’ve made tends to worsen the symptoms of anxiety and stress.

Instead, take accountability for your situation, and choose to take back control of your finances – “Yes, I spent that money for this reason, and I’m going to work hard to get myself out of debt”. This helps you to clarify the reasons you got into debt and will empower you to take actions towards making changes to your life. This can be a liberating experience, as the stress and uncertainty are addressed. You have a challenging task in front of you, but with patience and discipline, you will be capable of changing your circumstances.

Establish a savings plan

For many people struggling with debt, the cause of indebtedness can be a lack of organisation, particularly regarding financial matters. It’s important to have a strong understanding of your financial situation and identify problematic financial issues – like where you’re spending unnecessarily or unsustainably.

Review your recent bank statements and evaluate where your expenses are going. Then, draw up a budget so that you can buy what you want and need without running out of money. Being organised and having a savings plan helps to prevent you from losing control of your spending.

Keep in mind, a budget isn’t a rigid document. If you only budgeted $250 for your utility bill, but it comes in at $300, you still have to pay the bill. This means you have to subtract $50 from your expenses somewhere else – most likely from your entertainment expenses.

Consider finding new avenues for income

If you are putting all your energy towards cutting costs and are resorting to reducing spending on necessary items, like groceries, it might be time to look for new opportunities to generate more income. The key to dealing with financial stress is to focus on the solutions, and not the problems. So, come what may, do your best to stay calm, don’t panic, and try to see things with clarity. This might mean getting a second job such as a ride-share driver, a food delivery rider, or online freelancer. 

Prioritise your expenses

It could well be that you don’t need everything on your expense list. Establish a hierarchy of expenses from most necessary to least necessary, and it will be obvious where you might have to reduce expenses. Obviously, living expenses are a high priority, but if you can’t afford your rental payments or fuel costs, you might need to think about how you can substitute these – a cheaper apartment/house or public transport.

Start by distinguishing between needs and wants, set priorities based on this definition, and follow an organised plan to meet your goals.

Educate yourself

Finally, educating yourself financially is an excellent way to learn how to manage money, as it is such a crucial reality of modern life. Check out our Master Your Money webpage for links to informative financial management articles, tips, and tools.

We’re here to help

We understand that the financial pressure of debt is a reality for many of our customers. It’s best to get in touch sooner rather than later so please contact Westpac Assist on 1800 067 497 or you can apply for financial hardship requests here. We’re here to help.

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Things you should know

This information is general in nature and has been prepared without taking your objectives, needs and overall financial situation into account. For this reason, you should consider the appropriateness for the information to your own circumstances and, if necessary, seek appropriate professional advice.

© Westpac Banking Corporation ABN 33 007 457 141 AFSL and Australian credit licence 233714.