From recent high-profile bank failures to sky-high inflation and worries of a recession, many consumers are coping with financial stress as they try and keep their money safe, plan for the future and simply try to make ends meet.

In fact, more than half (52 percent) of adults say money has a negative impact on their mental health at least occasionally, according to Bankrate’s 2023 Money and Mental Health Survey. Among those impacted by money worries, almost one-third (29 percent) worry every single day.

While financial stress can often be attributed to external factors, there are ways you can mitigate it and take steps to improve your financial security. Here are seven steps to help you manage financial stress during trying times.

Impact of financial issues on mental health

  • More than half (52 percent) of adults say money has a negative impact on their mental health at least occasionally.
  • Women are significantly more likely than men to say money negatively impacts their mental health (56 percent versus 47 percent).
  • Gen Xers (ages 43-58) are the most concerned, since 60 percent say money negatively impacts their mental health, compared with 55 percent of millennials (ages 27-42), 52 percent of Gen Zers (ages 18-26) and 45 percent of baby boomers (ages 59-77).
  • More than one-third (35 percent) of those with annual household incomes under $50,000 who say their mental health is negatively impacted by money matters say this happens every day. That figure falls to 29 percent in households that earn between $50,000 and $79,999, 21 percent in households that earn between $80,000 and $99,999 and 23 percent in households that earn more than $100,000.
  • Inflation is the top money worry that has grown over the past year. More than half (57 percent) of those whose mental health is negatively impacted by money concerns said this issue has worsened over the past year.

1. Prioritize what you can control on discretionary spending

You probably can’t change everything that’s causing you stress. Focus instead of what you can control so you can improve your situation. For instance, consider your food budget. Look for ways to shave a few dollars off your grocery bill, like comparing prices on different brands. You’ll not only save money, but the feeling of accomplishment and being in control may help reduce your stress as well.

Lowering your food bills can really impact your budget, since food prices are expected to increase 6.5 percent in 2023, according to the U.S. Department of Agriculture. One simple way to save on groceries is to buy store brands over name brands. Store-brand groceries tend to run around 40 percent cheaper than name brands, according to CNET research.

2. Find ways to earn more money

You can only cut a budget so far, and you’ll want to be careful that your tight budget doesn’t become a source of additional stress. With the price of consumer goods being higher than normal, line items in your budget are likely already under strain.

It might be worth looking for ways to increase your income instead. Some ways to do so include:

  • Work a few extra hours: Try talking to your employer about putting in some extra time each week, if you’re paid hourly or at least eligible for overtime pay.
  • Negotiating for a raise: Given high inflation and a tight labor market, employers may be more willing to grant a pay increase.
  • Selling items you no longer need: This can include things such as old furniture, clothing, toys, pet items and tools.
  • Taking on a side gig: A side gig can be a good option for those who want a flexible way to pad their income alongside a full-time job. This can include things like delivering food, tutoring or running a blog. The money can really add up, considering the monthly average and median income from side hustles in 2022 was $996 and $400, respectively, according to a Bankrate survey.

3. Pay essential bills

A majority of employed Americans (55 percent) say their income has not kept up with the increase in household expenses due to inflation, a recent Bankrate survey found. If you’re worried about being able to pay all your bills, prioritize essential bills first. Sorting through your bills and prioritizing them serves multiple purposes:

  • Thinking through what you spend your money on can help you identify some bills that can be eliminated or reduced.
  • Deciding in advance which bills you need to prioritize can help ensure you set aside enough money to pay them on time.

Paying close attention to your bills and prioritizing them will help reduce your financial anxiety and hopefully allow you to sleep better.

Some service providers and lenders may allow for payment extensions, which give you extra time to pay your bill. This can come in handy during a time of financial hardship. It’s important to read the terms of any extension agreement to understand whether associated fees will be charged and how the extension impacts any interest accrued.

4. Save money during trying times

It’s often hard to consistently save money, especially if you’re struggling just to make ends meet. In fact, 74% say economic factors, including inflation, rising interest rates, and change in income/employment, are causing them to save less right now, Bankrate found.

Following a savings plan and building up your emergency fund will not only help you feel more in control, but it will also relieve some stress.

Shopping around for the best high-yield savings account is worth your time, considering these accounts often earn exponentially higher yields than the near-zero rates commonly offered at big banks.

Many consumers continue to earn lackluster rates on their savings accounts, however. Only around 1 in 5 Americans (22 percent) with short-term savings say they’re earning a yield that’s 3 percent or higher, according to Bankrate’s Online Savings Survey. Nearly a quarter (24 percent) earn mediocre annual percentage yields (APYs) of 1 to 2.99 percent, while the same percentage (24 percent) report earning a rock-bottom APY of less than 1 percent and 16 percent say they’re earning no interest whatsoever.

If you want to contribute a certain amount to your savings each month, you can set up an automatic transfer from your checking account.

Once you’ve built an emergency fund, you may want to put any extra savings into a certificate of deposit (CD). In exchange for keeping the money in the account for a set time frame, you’ll earn a guaranteed return rate that may be higher than traditional savings accounts.

Other places to save your money include money market accounts, cash management accounts and individual retirement accounts (IRAs).

5. Track your money-saving progress

You won’t really know if you’re making progress if you don’t track it. Make sure you know where you stand.

“Do the work to figure out your exact financial situation,” says Tracey Bissett, president at Bissett Financial Fitness. Tracking your progress lets you know whether the actions you’re taking are moving the needle.

Tracking your progress in adding to your emergency fund over time can have a positive impact on your wellbeing. Of all U.S. adults who say concerns about money have negatively impacted their mental health, 41 percent say not enough emergency savings has caused an increase in concern over the past year, Bankrate found in its Money and Mental Health Survey.

“Having good financial health and a positive mindset is really all about understanding your opportunities, your options and how your money is working for you,” says Cara Macksoud, a certified financial behavior specialist and CEO of Money Habitudes, a financial personality assessment provider.

“If you don’t have a positive mindset currently, understanding your finances will let you know what story your money is telling, and that may be the check-in that helps you begin to have a positive mindset around money,” Macksoud says.

Bankrate’s savings calculator is a handy way to determine how soon you can reach a financial goal based on how much you save every month. Another resource, Bankrate’s Magnify My APY, helps you determine your current savings rate, compare other rates, and see how much more you can earn with a higher APY.

6. Talk to your lenders

Debt can be both a financial and mental burden. Before you let debt and the stress it causes overwhelm you, talk to your lenders.

“Always remember that lenders are often open to discussing your issues and finding at least a short-term solution,” says Anna Barker, personal finance expert and founder of personal finance website LogicalDollar.

The lender may be willing to make a modification on the loan, such as extending its term or lowering the interest rate, to reduce your monthly payments. You could also try refinancing.

7. Consult with an expert financial advisor

Consider talking to a financial advisor to help take some of the weight off your shoulders when it comes to things like setting goals, saving money and decreasing debt.

Working with a financial advisor on aspects that include financial planning and investment selection can add around 3 percent to your portfolio annually, based on research by consulting group Envestnet | PMC.

“In times of stress, a financial advisor should be there to validate your feelings [and also] show you why you should feel calm with the plan you have in place,” says Money Habitudes’ Macksoud. “If you have a longer-term relationship with an advisor, the greatest part of that is you can see where you were, where you are, and where you’re going. And if you’re still on track, even with market uncertainty as it is, you should find peace with the diversification you have.”

Bottom line

Financial stress and anxiety are common nowadays, whether you’re struggling to make ends meet due to inflation or you’re worried about the safety of your money in the bank after several high-profile bank failures.

Though it will take some effort, you can work to stay ahead of expenses and curb financial worries. This can be accomplished through steps like creating a budget and tracking your savings progress. Also, don’t hesitate to reach out to a financial advisor or a trusted friend or relative for advice.

Various online resources are available for free to help you save money, spend wisely and live within your means. Bankrate’s money-saving calculator can help you determine how long it’ll take to save for goals. What’s more, you can help build up your nest egg through a money-saving app or any savings features available in your own bank’s app.

— Bankrate’s René Bennett and Brandon Renfro, CFP, contributed to previous versions of this story.