Woman looking at bills rubbing her head

Financial stress

As cost-of-living pressures hit home and interest rates climb to their highest levels in years, it’s no wonder that more and more Australians are experiencing financial stress.

We already have one of the highest household debt ratios in the world, with mortgages representing more than half of the average $250,000 owed – which includes an average $17,000 of personal loan, $24,000 of student loan debt, and nearly $4,000 of credit card debt.

With personal debt levels exceeding income growth, the impact of rising interest rates and cost of living is significant. The cost of a $600,000 mortgage has increased by $1,562 per month since May 2022, average rents are up 8.5% in capital cities and 6.4% in regional centres compared to last year, and cost of living pressures are fuelling both buy now-pay later and credit card debt levels.

What this means for our mental health and wellbeing – and the mental health and wellbeing of those we love and work with – is not just timely, it is really important.

In particular, we are not alone in feeling anxious, worried or emotionally tense because of the financial stress we may be experiencing. Financial stress and mental health are intrinsically linked. So, let’s talk about it.

What are some of the issues associated with financial stress?

Any form of stress can take a toll on your health, but stress relating to financial worries and concerns can be especially tough. Verywell Mind, an online resource for reliable, up-to-date information on a range of mental health topics, has outlined four ways financial stress can impact you.

Delayed health care

If you’re living with financial stress, there’s a good chance you’re going through some difficulties with your finances and might be sticking to a budget. This means you’re more likely to cut corners in areas that you shouldn’t, like your health care.

In a 2021 survey by the Australian Bureau of Statistics, 12% of respondents said that cost was a reason for delaying or not seeing a health professional. A worrying sign when one in six Australians is currently living with anxiety, depression or both, according to Beyond Blue.

Financial stress and mental health: how does money affect mental health?

There is a link between mental health and financial stress. The Black Dog Institute calls this a ‘vicious cycle’, with financial stress leading to poor mental health, which can make taking action to protect your financial health much harder.

The link between stress and your physical health

Financial stress can significantly impact your physical health. For example, research has shown that people with high debt-to-assets – that is, people who, if they sold all their belongs, still wouldn’t have enough to pay off their debts – tend to report poorer physical health, including higher blood pressure.

Financial stress can also leave you more exposed to cold, flu and other illnesses. When you feel financial stress, your immune system reacts with a fight-or-flight response. The release of major hormones can impact how your immune system functions, leaving it stifled and you more at risk of illness.

Healthy (and unhealthy) mental health coping strategies for stress

Sometimes, financial stress can lead to unhealthy coping behaviours, such as relying on things like alcohol. A 14-year study by researchers at the State University of New York at Albany found that men who experienced financial difficulties were approximately 30 per cent more likely to start drinking heavily when compared with men who did not have financial issues.

Anxiety and depression

If financial stress isn’t addressed, it can lead to things like anxiety and depression, so it’s important to watch out for the common symptoms.

Common symptoms of depression include: changes to your behaviour, such as withdrawing from others; changes to your feelings, such as being unmotivated, indecisive or irritable; physical changes, such as fatigue, headaches and sleeping or eating too little; and changes in your thoughts, such as thinking self-defeating or unhelpful thoughts.

Meanwhile, anxiety symptoms fall into the same broad groups as depression. You might notice changes to your behaviour, such as having difficulties making decisions, procrastinating or withdrawing from others; changes to your thoughts, especially thinking things like “everything’s going wrong”; physical changes, including headaches, fatigue, pounding heart and sleep problems; and changes to how you feel, such as irritable, tense, nervous and scared.

Remember, it’s OK if you experience any of these symptoms, but it’s important not to overlook them. If you need the support of a trained professional, reach out to a psychologist who can offer you support and techniques for dealing with symptoms.


Coping with the psychological effects of stress: how to respond to financial stress

Practice relaxation techniques

Relaxation techniques, such as meditation, can be a good way to calm down. Meditation is simple, inexpensive and can be done almost anywhere. Giving you a sense of calm and balance, there are thousands of free meditation videos online that can get you started on the basics.

Like meditation, yoga is another inexpensive technique to try. Yoga involves physical poses, concentration and deep breathing to centre the body and mind. People of all ages can perform it, with a number of websites and apps offering courses and tips to beginners and experts alike.

Daily Yoga is a great starting point if you’re looking at trying yoga. The free app, which is available on the Google Store and the App Store, encourages daily practice and helps you develop healthy habits. Step-by-step instructions help you through beginners yoga until you’re ready to try out some of the advanced yoga poses.

Take stock of your finances

Financial stress can leave you feeling lost or “all over the shop”, which is why it’s good to break things down to get on top of them. Try tackling each problem one step at a time. Start small, like writing down what you can do to help the problem today, and work your way up to broader plans for the coming weeks and months ahead.

Having a daily budget is a simple starting point for trying to get on top of things, but if that’s not enough, or you don’t feel like it’s working, you can always seek the help of a finance professional. If you’re struggling to pay bills, you can try calling your bank or utility company to see what they can do for you.

One of the ways you can track your finances and budget is with the help of a handy app. Mint is a good place to start. The highly-rated app is available on the App Store and Google Play. It can sync up with all of your bank accounts and bills and then track your expenses and place them into budget categories where you can set limits. Mint can also notify you when you’re nearing the limit.

Money Smart is another way to keep tabs on your spending. Set up by the Australian Securities and Investments Commission, Money Smart’s budget planner helps you find out where your money is going. You can put in all your incomings and outgoings, along with the frequency of outgoings, to get a simple, easy-to-understand picture of your finances.

Look after yourself: engage in self-care

It’s important to start, or carry on, engaging in self-care. This just means making sure you’re doing things like exercising regularly to stay physically and mentally fit. Exercise can release feel-good endorphins that can boost your mood, easing symptoms of stress.

Making sure you’re getting enough sleep is another good self-care measure. Getting the right amount of sleep – somewhere between seven and nine hours – helps your body recharge, whilst lack of sleep has been linked to poor mental health and a host of other conditions.

Websites like Beyond Blue are a great way to find some ideas or information on self-care. The mental health information site has a whole section dedicated to self-care, with an abundance of blogs providing ideas, education and reviews on the topic.

myCompass is a fantastic online self-help program by Black Dog Institute for people who want to build good mental health. Free and simple, you can register online, complete an automated assessment with some basic background details, and get started with a program of activities and a toolkit aimed at dealing with thoughts, feelings and behaviours that are causing you trouble.

Reach out for support

If you feel like your financial stresses are getting too much, or even if you just need to talk to someone, you can reach out to a professional. That could mean reaching out to a finance professional who can help you take stock of your finances.

Alternatively (or in addition to seeking the help of a finance professional), you can reach out to an allied health professional. Consulting a psychologist for stress  such as a psychologist. Psychologists are specially trained to support people with a range of different issues, including financial stress.

For urgent support

If there’s an immediate risk of harm to yourself or others, please call 000.

If you need someone to talk with now, call:

  • Lifeline: 13 11 14
  • Beyond Blue: 1300 22 4636 or chat online at beyondblue.org.au
  • Suicide Call Back Service: 1300 659 467

Can’t cope with stress anymore?

Talk to a psychologist for stress related mental health issues

Financial stress and mental health are inextricably linked. If you want talk to one of the Access Psych team, take a look at our registered and provisional psychologists.

Alternatively, if you have any questions about Access Psych and what else we can do for you, visit our Frequently Asked Questions page.

When you’re ready, you can book an appointment online, speak to one of our friendly team on 1800 277 924 or email info@accesspsych.com.au.


The information provided in this document is general in nature and is intended to be used for information purposes only. While we have tried to ensure the accuracy of the information published, no guarantee can be given that the information is free from error or omission or that it is accurate, current or complete.

The information published is not, and should not be relied on as, health or treatment advice. The diagnosis and treatment of any mental illness requires the attention of a physician or other properly qualified mental health professional. If you are seeking diagnosis or treatment of any other mental illness, you should consult a physician or mental health professional.  You should not delay in seeking, or disregard, professional health advice because of something you have read in this document.