Despite an improving economy, financial stress has been rising for low- and middle-income households nationwide. Of the 76 million households that comprise the bottom 60% of earners in the country, about one-third have identified as stressed in recent years.

But it's not just low- to middle-income earners who are anxious about money. More than half of U.S. employees across the board say their finances are impacting their well-being.

If money matters are causing you undue anxiety, it's time to target those stressors at their core. Here are a few common sources of financial unrest and what you can do about them.

Man holding his head as if stressed


1. Living paycheck to paycheck

It's estimated that 75% of U.S. workers live paycheck to paycheck. If that's the lifestyle you've been upholding, it's time to make some significant changes that give you more financial breathing room.

First, create a budget, which will help you get a better handle on your expenses and see where your money is going. Once you have that budget in place, pick a few spending categories you're going to reduce, whether it's rent, your cable plan, or entertainment. Finally, take the money you don't spend after cutting those expenses and stick it in a savings account to build your emergency fund. This way, if an unplanned bill comes your way in the future, covering it won't be nearly as difficult or worrisome.

2. Housing

It's estimated that 39 million Americans can't afford their homes. If you're one of them, it's time to rethink what you're spending on housing each month. Whether you rent or own, your housing costs should never exceed 30% of your take-home pay, so if your paychecks leave you with $5,000 after taxes and you're blowing $2,000 of that on a mortgage and property taxes, you're setting yourself up for disaster.

A better bet? Downsize to a smaller space, or move to a more affordable neighborhood that gives you added bang for your buck. Uprooting your life won't be easy, but if you continue to overspend on housing, you're apt to struggle to keep up with the rest of your bills.

3. Healthcare

Healthcare is a huge expense for households of all income levels, and it's an unavoidable one at that. But there are a few things you can do to keep your costs to a minimum. First, make sure you understand your health benefits, because nearly half of Americans don't. Knowing what services you are and aren't entitled to could help you avoid needless charges.

Furthermore, make sure your health plan is suiting your needs, and if it isn't, shop around. You may come to find that paying a slightly higher premium for a better plan saves you money when you factor in things like reduced copays and deductibles.

Additionally, get ahead of health issues you experience before they end up getting worse. A bad cut that gets treated at an urgent care clinic might cost you a $50 copay, but if it gets infected because you ignore it and you land in the ER, that bill might easily top the $1,000 mark.

Finally, be smart about your prescription drugs. Using generics could save you a bundle, and the same goes for ordering refills in 90-day supplies. In some cases, you may even come to find that a 90-day supply is cheaper than a single month of medication. Go figure.

4. College

College costs are a burden, even for high earners across the country. If you're worried about funding an education for your children, your best bet is to save early and efficiently. Many parents sock money away in a savings account to use for college, but if you go this route, you'll limit your savings' growth and pay taxes on what minimal interest you earn. On the other hand, if you save for college in a 529 plan or Roth IRA, you'll benefit from tax-advantaged growth and a host of potentially lucrative investment options whose returns well exceed what banks today are paying.

Imagine you're able to set aside $300 a month for college over a 15-year time frame. At 1% interest in the bank, your account balance would grow to $58,000 without taking taxes into account. But because you'll be subject to taxes year after year, the total amount you'll have access to will be considerably less.

On the other hand, if you put that $300 a month into a Roth IRA or 529 with a somewhat conservative average annual 6% return on investment, you'll wind up with about $84,000 free and clear of taxes. And that's a much better deal.

It's natural to worry about money on occasion, but if financial stress has taken over your life, it's time to do something about it. Otherwise, you'll not only perpetuate your own misery, but quite possibly dig yourself into even more of a hole.