How to deal with financial stress

Health Agenda
Mental Health

How to deal with financial stress

Money worries have affected many of us in the past year. Here’s how financial stress can impact you and what to do about it.

“I’m not sure what the future holds. I stay awake at night thinking about it.” Does this thought pattern feel familiar to you?

Many of us worry about finances at certain points in our life, especially when we’re faced with unexpected costs like car repairs or rent rises. But financial stress may have grown worse for some of us over the past year. The pandemic has impacted many areas of life, including our job security and financial stability. And as life goes on and the reality of the economic impacts set in, for some people financial insecurity may be starting to feel more present.

COVID-19 has also impacted our mental health. Rates of depression and anxiety have been increasing. Self-harm is on the rise, particularly among young people. Mental health services, including the support HCF programs provide its members, continue to help Australians.

But overall, the pandemic has particularly affected young people aged under 30. These Australians have seen disruption to education, lost their jobs and incomes, and felt the loss of social connection.

All of this upheaval is coming at what VicHealth calls a “critical life stage”, when you’re establishing your physical and mental health habits, and developing individuality. In terms of mental health and finances, people under 30 are more disadvantaged than any other demographic.

Job losses are affecting young people more than others, because a greater proportion of them work in industries directly affected by lockdowns and restrictions, including hospitality, retail, culture and leisure. And young people are more likely to be casual or freelance workers, making their roles easier to cut when things get difficult.

Financial anxiety triggers and impacts

At the end of 2019, before the pandemic’s effects were felt, 40% of Australians said they had recently experienced some form of financial stress or hardship. This financial anxiety was more common in certain groups – for women, and for young people aged 18–29.

Psychologist Dr Marny Lishman believes this anxiety started before the pandemic, with rising levels of debt, falling household wealth and slow income growth.

“More Australians than ever are feeling financially stressed, but even prior to 2020, because of the economic downturn, people were feeling financially uncertain.”

Research shows common triggers for financial stress include high debt, home loans, impending retirement, supporting family and budgeting. This stress can play out in all areas of your life. And financial stress can lead to poor mental health, which makes it even harder to deal with your financial problems.

“When people are stressed, it’s quite difficult to come up with solutions to problems or make good decisions,” Dr Lishman says.

“That’s why managing stress is so important – it enables you to calm yourself, think clearly and then get back on track to be in control of your finances again. This often doesn’t happen straight away when someone is stressed – they will either become irritable or avoid dealing with it – which often makes the situation worse for the person.”

The Black Dog Institute says financial anxiety can lead to unhealthy coping behaviours like overeating or drinking too much alcohol. And ongoing money stress can impact your physical health, too, causing, for example, poor sleep or headaches. But it is possible to break this cycle by being proactive with seeking help and finding a new financial routine that works for you.

When to seek help

If financial anxiety has started to creep into your life, it might be time to get help.

Some signs of this anxiety include:

  • trouble sleeping
  • mood swings or feeling angry
  • withdrawing from others
  • arguing with loved ones about money
  • losing your appetite.

You may also blame yourself or others, or feel like your life is out of control, says Dr Lishman. To combat financial stress, there are two important approaches.

Learn how to reduce stress

First, if you’re experiencing high levels of stress, speak to your GP or a support service like Lifeline on 13 11 14.

People with mental health problems associated with the pandemic can access Medicare-subsidised therapy sessions, which are available until December 2022. You just need a mental health plan and a referral from a GP.

And eligible HCF members can access online video support and navigation to other mental health services as needed through our partner PSYCH2U*.

“[Once you] learn to manage stress levels, this will allow you to start planning new strategies to get on top of things,” says Dr Lishman.

Here are some stress-reducing strategies:

  • practise mindfulness and breathing techniques
  • focus on eating well and exercising regularly
  • create good sleep habits
  • reach out to your loved ones – even if it’s a quick phone call. You might also like to find new ways to connect with people, like an online book club or exercise class, or an online support group like Headspace’s Group Chat
  • avoid or limit exposure to the news as it can be stressful, and depending on where you get it, confusing or misleading. Get health information from trusted sources like
  • develop new activities if your routine has been disrupted. It could be a walk in the morning, calling a friend in the evening, keeping consistent waking and sleeping times, or spending time in nature. This structure can help provide stability
  • take positive steps to make your mental health a priority at

Get financial help

The second important approach is to get on top of your finances. You’ll find information on the financial support available from the government at, including advice on how to ask for financial hardship assistance and where to find financial support. You can also work out where your money is going with Moneysmart’s clever budget planner.

The government also offers free financial help. To speak with a financial counsellor, contact the National Debt Helpline on 1800 007 007. This free hotline is open from 9.30am to 4.30pm Monday to Friday. There are also tools available on the National Debt Helpline website.

You may find talking with an expert your best approach – a financial counsellor can help you figure out what you can afford, prioritise your debts, explain options with government benefits and connect you with support services.

Sarah from the National Debt Helpline says there’s no shame in asking for help.

 “I’d encourage people not to be afraid to contact a financial counsellor if they’re stressing about their debts because there’s lots of help available. We are human too, and it’s a very non-judgmental service.”

Planning for future financial security is important, too. It’s vital to put aside money for unexpected costs and set goals for where you want to be in five or 10 years from now. Get back in control of your financial future by reading the tips at

Words by Sophie Al-Bassam
This article first appeared in the March 2021 edition of Health Agenda magazine.

If you need to speak to someone now about your mental health, call Lifeline on 13 11 14.

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*Must have HCF gold level hospital cover for at least 2 months. Eligibility is based on clinical need as assessed by PSYCH2U.