How Does Financial Stress Affect Your Health?

Medically Reviewed
older woman looking through change purse
Financial stress can become a type of chronic stress that can affect mood, mental health, sleep, heart health, and more.Peter Dazeley/Getty Images

There’s no escaping the fact that financial stress looms large in America.

A nationwide survey of more than 3,000 adults published by Thrive Global and the credit card Discover in March 2022, found that 90 percent reported that money was a source of stress.

About two-thirds of respondents reported feeling like they can’t overcome the financial difficulties that are piling up, and 40 percent reported taking no steps to secure their financial future.
Data collected in 2019 by Everyday Health for the United States of Stress survey for more than 6,700 men and women found that money was our number one source of stress with 52 percent of people saying financial issues regularly stressed them out.

And that was before a global pandemic shook the job market and the United States hit record-high inflation levels.

It’s not just a problem for our pocketbooks. Research also indicates that this type of financial worry and stress can also damage our health.

“To say that financial stress impacts health is an understatement,” says Ashley Agnew, director of relationship development at the financial planning group Centerpoint Advisors in Needham, Massachusetts, where she leads financial coaching and therapy services. (Agnew has a financial therapy graduate certificate from Kansas State University.) That’s because our finances affect so many aspects of our lives, including our safety, opportunities available to us, and relationships, she says. “Our relationship with money and our thoughts surrounding finances are big drivers of our health.”

So, how do you avoid financial stress that can put your health at risk? It’s not a matter of making a lot of money. It does mean working toward financial wellness, which is having control over day-to-day finances and the freedom to make choices that help you enjoy life, while also being able to absorb a financial shock and reach financial goals, according to the Federal Consumer Financial Protection Bureau (CFPB).

And importantly, financial wellness is about feeling secure about your money matters (even if funds are low), so it’s not something that’s overwhelming your thoughts and emotional health.

Here are some of the ways that too much financial stress can be so toxic for your health.

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Too Much Financial Stress Can Be Really Toxic for Mental Health

A certain amount of financial stress can be helpful in guiding good decision making. “Stress as a speed bump can be healthy,” Agnew says. Think the small flutters of anxiety you might feel when making a big purchase. “It’s your financial gut-check in many cases,” Agnew says — or a reason to pause and think twice about whether the action you’re going to take aligns with your bigger goals and financial plans.

Too much financial stress, however, can deeply affect our emotional well-being.

Part of the reason financial stress tends to be so toxic is because of how all-consuming this kind of stress is. Money affects a lot of day-to-day activities (like buying groceries, paying rent or a mortgage, accessing healthcare, and providing for our families). Worrying about money can lead to worrying about all of these things.

“When a person is experiencing financial stress, it is pervasive,” says Alex Melkumian, PsyD, licensed marriage and family therapist, a financial psychologist and founder of the Financial Psychology Center in Los Angeles. “You feel like there is nowhere to turn without being stressed or traumatized by your financial situation.”

Over time, having lots of financial stress —?particularly when combined with the lack of sleep that such stress can cause (more on that below) —?can lead to complex trauma, Dr. Melkumian says.

Research shows that adults who experience major financial stressors — falling behind on bills, being unable to afford basic necessities, or experiencing a worsening financial situation — report greater levels of psychological distress and lower levels of psychological well-being, for example.

There’s evidence that financial stress is associated with depression across all income levels, although the relationship is stronger in low-income populations.

All of the financial decisions we’re forced to make each day can really add up, Agnew adds. “Some are as small as whether or not to purchase the sale or full priced item at the grocer, and some are as complex as whether or not to lend a large sum of money to a family member or change jobs,” she says. And the bigger decisions can have huge ripple effects in pretty much every aspect of your life.

Financial Stress May Contribute to Big Sleep Problems

One of those ripple effects that financial stress can instigate is disrupted sleep or insomnia for some.

“Loss of sleep is one of the major signs that we are out of balance,” Melkumian says. “It's our body's way to sound the alarms that something is wrong.” Financial stress is particularly likely to lead to sleep issues, he says, because of how all-consuming it can be.

The financial strain of the ongoing pandemic certainly comes into play here. One study looked at rates of insomnia among Canadian adults before and during the COVID-19 pandemic. Researchers found that rates of insomnia increased by 27 percent between 2018 and 2020, and that increased financial stress is one reason why.

But research conducted before the pandemic supports the link between financial stress and disrupted sleep is not a new one. A large, nationally representative dataset from Australia found that individuals who live in areas with high unemployment rates or experience individual-level economic vulnerability sleep less than people in areas with low unemployment rates or who do not experience financial hardships.

Research suggests this relationship between economic stress and poor sleep holds for young adults.

And it also is true for older adults.

Financial Stress Linked to Higher Risk of Heart Disease and Other Chronic Illness

Too much financial stress can have long-term physical consequences, as well. That’s because stress itself triggers a series of physical reactions — your heart rate quickens, muscles tense up, and breathing quickens — thanks to increased levels of the stress hormones cortisol and adrenaline (which act like messengers, readying the body to cope with a perceived threat). If this response is chronic — as can be the case with financial stress — it can lead to problems like hypertension, high cholesterol, muscle pain, and other issues.

In one study, researchers found that participants with moderate to high levels of financial stress are more likely to have coronary heart disease events (heart attack, heart disease, or heart surgery) than those without financial stress. This held true even after the researchers controlled for socioeconomic status, access to healthcare, and demographic and clinical risk factors.

It’s also possible that financial stress is linked with higher rates of chronic disease overall. Research published by Lockton, an insurance company, found that finances are the leading cause of stress among employees, and that those with high financial stress are 3 times more likely to take prescription drugs for chronic illness, and twice as likely to report poor health overall.

Another study looked at young adults ages 18 to 25 with type 1 diabetes and found that higher levels of financial stress were associated with higher hemoglobin A1C, which means worse blood glucose control, and lower quality of life.

What’s more, the relationship between financial stress and chronic disease goes both ways. Managing these conditions can be a financial strain, between medications, medical visits, and the increased likelihood of unplanned hospital stays. One study found that chronic disease was associated with increased financial stress, particularly for people without access to public health insurance.

Editorial Sources and Fact-Checking

  • The United States of Stress. Everyday Health. May 7, 2019.
  • Thriving Wallet: Research Insights Report/White Paper [PDF]. Thrive Global. February 2020.
  • Financial Well-Being: The Goal of Financial Education [PDF]. Consumer Financial Protection Bureau. January 2015.
  • Sturgeon J, Arewasikporn A, Okun M, et al. The Psychosocial Context of Financial Stress: Implications for Inflammation and Psychological Health. Psychosomatic Medicine. February-March 2016.
  • Guan N, Guariglia A, Moore P, et al. Financial Stress and Depression in Adults: A Systematic Review. PLoS One. February 2022.
  • Morin CM, Vézina-Im LA, Ivers H, et al. Prevalent, Incident, and Persistent Insomnia in a Population-Based Cohort Tested Before (2018) and During the First-Wave of COVID-19 Pandemic (2020). Sleep. January 11, 2022.
  • Moran KE, Ommerborn MJ, Blackshear CT, et al. Financial Stress and Risk of Coronary Heart Disease in the Jackson Heart Study. American Journal of Preventive Medicine. February 2019.
  • Finding the Links Between Retirement Stress and Health. Lockton. 2016.
  • Peng Z, Zhu L. The Impacts of Health Insurance on Financial Strain for People With Chronic Diseases. BMC Public Health. May 29, 2021.
  • Blanchette JE, Toly VB, Wood JR. Financial Stress in Emerging Adults With Type 1 Diabetes in the United States. Pediatric Diabetes. August 2021.
  • Hall M, Buysse DJ, Nofzinger EA, et al. Financial Strain Is a Significant Correlate of Sleep Continuity Disturbances in Late-Life. Biological Psychology. February 2008.
  • Yang EJ, Shim EJ. The Relationship Between Sleep Quality and Depressive Mood in University Students Experiencing Financial Difficulties: An Ecological Momentary Assessment Study. Korean Journal of Clinical Psychology. 2021.
  • Perales F, Plage S. Losing Ground, Losing Sleep: Local Economic Conditions, Economic Vulnerability, and Sleep. Social Science Research. February 2017.
  • Stress Effects on the Body. American Psychological Association. November 1, 2018.
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