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Stress of any kind can damage your physical and mental health. Unfortunately, a substantial number of Americans are experiencing financial stress -- and it's having a negative effect on their well-being.
A recent study from Northwestern Mutual identified some of the consequences of money worries, and there are three big ways financial stress is causing damage.
1. Financial anxiety leads to frequent depression
According to Northwestern Mutual's data, close to a third of adults in America (31%) feel depressed at least once per month as a result of financial anxiety.
That doesn't come as a surprise. After all, if you're worried about money constantly, you're likely to feel unhappy about your overall situation, too. That's especially true if you fear big financial consequences from being unable to pay bills, things like damaged credit, late fees, foreclosure, or repossession.
2. Money stress affects relationships
The same data also shows that 21% of Americans believe financial stress affects their relationships with a partner or spouse at least once a month. Again, this is understandable. Money is one of the leading sources of conflict in most relationships, and if you and your partner want to do different things with limited funds, this can lead to tension.
Financial infidelity is also a big problem. A study from The Ascent revealed that around 71% of people have been dishonest with their partners about money. This can undermine trust in a relationship, and lead to more problems managing money together.
3. Your job performance could suffer
Finally, close to a fifth (19%) of Americans believe their job performance is affected at least once per month by financial stress. Of course, if you're worried about money while you're at work, it's hard to perform well at your position.
If financial concerns affect your job performance, this could put your career at risk -- which, of course, leads to more money worries about what you'd do if you lost your position.
How to eliminate financial stress from your life
Since financial stress can clearly cause substantial damage, it's important to eliminate as many of your money worries as you can. Fortunately, there are some steps you can take that reliably do that.
First and foremost, make a budget. That allows you to see where your money is going, identify areas where you can cut spending, and make responsible choices with your money. If you make a budget with your partner, it can also help you get on the same page. This alone can make a huge impact in reducing financial stress. Simply planning how you'll handle your money can make you feel much more in control and much less worried.
You should also save up an emergency fund to alleviate concerns about unexpected expenses. Prioritize building a small emergency fund when you make your budget, and even put it before paying off debt early.
Finally, set goals such as paying off high-interest debt like credit cards and saving for retirement -- and build these items into your budget. If you become debt-free over time and you're working toward financial security, your money worries can be a thing of the past.
