News
10 June 2020
Seven steps to managing financial stress
Sooner or later you will probably have to deal with some financial stress. Many Kiwis are already in this position, which might be caused by rising debt, a job loss, insufficient earnings, high living costs, or even money trouble in your relationship.
Whatever the circumstances, being worried about money takes a mental and physical toll and it can strain relations with your significant other, family, workmates, and friends.
While everyone handles stress differently, we all deserve the chance to live a comfortable and happy life free from unnecessary financial worries.
The Symptoms
In many cases it will be obvious when money is stressing you out, but sometimes it can seem to come out of nowhere.
To help evaluate your current financial stress levels, here are some questions to ask yourself:
- Do you control your money, or does it control you?
- Are you feeling uneasy when you think or talk about money?
- Do you often think negatively about your current and future finances?
- Have you woken up lately with money on your mind? Or struggled to sleep because of money-related thoughts?
- Is there a chance you’re ignoring issues, or are in denial about your finances?
- Have things you loved to do stop interesting you at all because you’re consumed by money worries?
- At the extreme end – are you having panic attacks often? Or feeling depressed because of money?
Of course, these are just a few signs and your warning indicators may be different from those of the next person.
Relieving Financial Stress
Below are seven ways to help relieve your financial stress, take control of your finances, and feel more at peace.
Find the source of your financial worries
While there are many reasons money might be causing you worries, you need to really focus on what bothers you most about your finances.
We may look at the activities potentially doing us harm and think those are the problem. For instance, we might be spending a lot on shopping, smoking, gambling, or drinking. But these things may not be the root of the problem at all – but a symptom of an issue causing trouble beneath the surface. Try and dig a little deeper to find what the real issue or concern is.
Ask yourself, what is it that if you specifically changed, would make you more at ease and less worried?
Maybe it’s eliminating your debt or earning more money so you can start saving or investing. Maybe it’s only one major thing, or maybe you have a list of a few things, such as:
- a job loss or uncertainty about a job.
- credit card or consumer debt.
- a low income level affecting your ability to save and invest.
- low interest rates – especially for retirees relying on savings.
- volatile share markets, which can make the value of KiwiSaver and other investments drop.
- relationship trouble.
- lack of financial literacy.
- big bills, such as for dental work or to fix a car.
- another form of unexpected emergency.
- increased living expenses, or overspending.
Some of these examples can be financially devastating.
Whatever the case, make sure you sit down and really think about `what’ and then `why’ these areas trigger your financial stress. This can be the first building block to getting on top of things.
Tackle one issue at a time
If you have a few money problems, your finances can certainly feel overwhelming. This can snowball and create a situation where you feel like you have no control or even know where to start.
It’s important to prioritise matters. So, after you’ve identified your biggest issue (or issues), you can start to focus on tackling the main source of the problem.
Be realistic when considering what you can achieve to resolve the issue and then dedicate yourself to following through each month. For example, this might be promising yourself to spend less and put the difference toward your debt, so that your balance drops by a predetermined amount each month.
Learn how to handle money stress
How you handle money stress can be different from how others do and will also be affected by the amount of preparation you’ve been able to put in beforehand.
Even financially stable people can still stress about money and worry about their financial future.
During the current tough economic times (the impending recession that New Zealand is expected to enter), it’s okay to accept and acknowledge a little stress. Be brutally honest with yourself about how you might handle that stress, and prepare yourself for the potential that the New Zealand economy could get worse before it gets better – which could impact you further.
Look for healthy ways to manage your stress, like working out, taking a walk, listening to music, creating something, or learning a new skill — anything that helps you relax and think more logically. If you need help, reach out to someone you trust, or seek help from a professional.

Declutter your budget, then stick with it
Take control of your finances by setting aside time to schedule, organise, and declutter all the money coming in and out of your bank accounts. The more control you have, the less stress you will feel.
There are plenty of great tools to help do this. You can use this online budgeting tool, or just download a budgeting app to your smartphone or tablet – there are plenty to choose from.
Set realistic goals
Financial goals will make a world of difference. It helps you have something to strive for and can help to stay motivated.
It’s cool to have long-term and maybe more challenging goals. But if you’re financially stressed, it’s usually best to keep your goals simple, short-term, and achievable. This might be:
- Find three ways to save $xxx this month.
- Put xx percent of extra money towards debt repayments this year.
- Put $xxxx from each paycheck towards savings.
When you can cross a goal off your list, it will lift your spirits and keep you motivated towards achieving another.
Build an emergency fund
An emergency fund is a savings account meant to cover unexpected expenses and financial emergencies. Building an emergency fund may seem tough at first, especially if you are struggling to make ends meet. So, start to build it up by regularly putting aside a small amount, maybe $10 or $100. You might consider selling any unused items around the house to build up that cash even quicker.
If you’re starting from scratch, try working towards amassing a $1,000 sum. Then, once you’ve achieved that, as a guideline, you should aim to have three to six months’ worth of living expenses set aside.
Ask for financial help – from the right people
Sometimes, financial stress is not something you can handle on your own. There is no shame in looking for support or help. There are plenty of free services available to people who are struggling financially. For example, there are nationwide government-funded charities with budgeting mentors who offer ongoing, confidential, and free mentoring sessions. They’ll often visit your home to do so, and many can visit outside of usual work hours. If you’d like to learn more, then let the Milestone Direct team know, and we can put you in touch with someone in this field.
A word of warning: be wary when friends or family offer such assistance. Although these people may have the best of intentions, they might not be experts in financial matters, and could even be in a worse situation than you! Even if they are well-organised financially, they may not understand your particular situation and so you could risk getting irrelevant tips.
The Bottom Line
Too often, we let money control us and let it dictate what we do, which can result in stress and worries. Instead, your money should be working for you.
Coping with financial stress and taking steps to correct any issues will help you take control of your money. Let’s recap the top seven ways to manage financial stress:
- Find the source of your financial worries.
- Tackle one issue at a time.
- Learn how to handle money stress.
- Declutter your budget, then stick with it.
- Set realistic goals.
- Build an emergency fund.
- Ask for help – from the right people.
None of the above will be easy, regardless of where you might be financially. Some of your goals will take time and require plenty of effort to achieve (even then, you might not achieve everything you want to).
Stay patient, celebrate the small wins, and look for the positives as your situation progresses.

Declutter your budget, then stick with it