Does Financial Stress Cause Anxiety or Is It the Other Way Around?
Financial stress and anxiety tend to feed off one another in an exhausting cycle that can feel impossible to break. Debt creates stress, stress creates anxiety, and anxiety often leads to avoidance, which can look like ignoring statements, putting off calls to creditors, and delaying decisions that feel too overwhelming to face. But avoidance allows interest to accumulate, and the situation continues to grow; this creates more stress, which in turn leads to more avoidance.
If you’ve ever found yourself knowing you need to deal with something financial but felt completely unable to start, that’s the cycle in action. Acknowledging the cycle is the first step toward interrupting it, because it only has power when we ignore it. It may feel more stressful to look directly at the situation, but it can be a powerful step in breaking free from its hold over you.
How Financial Anxiety Is Different from Everyday Money Worries
Most people worry about money from time to time. Usually that’s in response to some unexpected expense like a car or house repair, or a higher-than-expected utility bill. That kind of worry is normal and usually resolves when the situation is addressed. The difference with financial anxiety is that it persists even when no obvious issues are present to deal with. It’s that constant feeling of dread in the background that doesn’t ever quite go away, the avoidance that builds over time, and the sense that things are out of control even when you can’t point to an exact reason.
For Canadians carrying high interest debt like credit cards, lines of credit, and payday loans, that background anxiety is often the loudest. The interest keeps building and it’s always in the back of your mind. The strategies that help with everyday money worries such as making a budget or cutting back on spending are still necessary but not always enough on their own when anxiety is present. If you find yourself overwhelmed by financial stress and anxiety, that overwhelming feeling makes it difficult to even begin thinking about a budget. The key to overcoming your stress and anxiety, and your financial situation, is to take things one step at a time.
Effective Steps to Manage Your Finances
How to Face Financial Hardship Without Shutting Down
When financial stress and anxiety are running high, even small steps can feel impossible. This is actually very common when dealing with anxiety; it narrows your focus and makes everything feel both urgent and insurmountable at the same time.
A solution that can work for many is to make the next step smaller. You don’t need to solve everything today. In fact, you can try doing just one simple task. Open one statement. Write down one number. Make one phone call. If the thought of calling a creditor feels paralyzing, start by just tracking down the number. If looking at your full debt picture feels like too much, start by writing down just your highest interest balance. Progress doesn’t have to be instant and small steps build up quickly.
You can also try setting a specific, limited time each week to deal with financial tasks and worries (say, thirty minutes on Sunday evening) so that money stress doesn’t seep into every hour of every day.
For Canadians whose consumer debt has reached a point where minimum steps don’t feel like enough, speaking with one of our credit counsellors can provide a structured path forward that removes the burden of figuring everything out alone, and that conversation and advice is completely free. If that’s you, calling us can be the small step you take next.
Tips to Reduce Financial Stress and Cope Better
How to Cope with Money Anxiety Day to Day
Managing financial stress and anxiety isn’t only about getting a handle on the financial situation; it’s also about managing the emotional side. The Canadian Mental Health Foundation lists several approaches to reducing the overall burden of stress in your life including:
- Talking to someone you trust about how you feel, even if they don’t have solutions for your financial situation. It can help to just express your feelings
- Engaging in calming exercises like yoga, meditation, or prayer to help settle your mind and feel more relaxed
- Taking time to enjoy your favourite activities, like hobbies and sports, even when you feel stressed. Pick up a new book or watch a movie you’ve been meaning to see
A credit counsellor can help you deal directly with your financial situation. But it can be just as important to connect with a licensed mental health professional such as a psychologist or social worker. They can help address any other issues related to your anxiety and stress, especially if financial anxiety is significantly impacting your sleep, your relationships, or your ability to function. If things ever feel truly unmanageable, the Government of Canada’s mental health support page can connect you with help that’s available 24/7.
Your Health is More Important than Your Credit Rating
Don’t Face Financial Stress and Anxiety Alone If Your Debts are Overwhelming
Financial stress and anxiety thrive in silence and isolation. Speaking with someone about your debt can go a long way towards lifting some of that stress. Most people who reach out to us say they wish they called sooner. They often report that even just making that first phone call and talking to someone about options and getting a grasp of the situation resulted in a noticeable reduction in stress.
At the Credit Counselling Society, we offer free, confidential, non-judgmental appointments with accredited credit counsellors who understand that debt is rarely just a numbers issue. If consumer debt is contributing to your financial stress and anxiety, you can contact us directly. We can help you understand your full picture, explore your options, and provide some next steps that feel manageable, not overwhelming.
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