De-stress Your Financial Life

Simple strategies for minimizing money worries and getting rid of financial anxiety

Question: when was the last time you felt stressed? If you’re like most people, it probably wasn’t all that long ago that you had something on your mind that caused you to be at least a little worried about what’s going on in your life … or unsettled about the state of the world … or a little anxious about what might happen (or not happen) in the hours, days or weeks to come.

But if there’s one subject that will be on nearly everyone’s stress list in some form or another, it’s finances. On one level, this is understandable: money (or the lack thereof) is something that touches nearly every aspect of our lives. And our worries and anxieties surrounding our finances can have a “knock-on” effect and determine how much stress we feel about many other life situations that involve money.

But on another level, it’s a little strange that money should be the cause of so much stress. Because, unlike so many other issues about which we may be worried (climate change, the war in Ukraine, the stock market, etc.), financial stress remains largely within our personal ability to control. By making some common-sense decisions to avoid financial problems, and by pursuing some tried-and-true strategies to manage, simplify and clarify the financial part of our lives, we can greatly reduce the impact of financial stress upon our well-being.

With that in mind, here are some thoughts which might clarify exactly what we’re going through when we feel financial stress, along with some practical strategies for reducing the money worries that can sometimes cause us to lose sleep.

A framework for thinking about financial stress

All of us have experienced stress at one time or another. But have you really stopped to think about what stress is? When you strip it down to its most basic level, stress is an emotional response to a threat. Within the context of our finances, that threat comes from a feeling that we don’t have power and/or control over our money – and by extension, we don’t have power and/or control over all of the things that money can do for us.

For a quick and obvious example of how this feeling of being under threat works, consider how you feel when you worry about not having enough money. You might feel powerless to retire when you want to. Or you might feel powerless to do some of the things that have been on your “bucket list.” Or, on a more day-to-day level, you might feel that you lack the power to choose to go out for dinner tonight, rather than cooking a cheaper meal at home.

There are a lot of ways in which this feeling of financial powerlessness or lack of control manifests itself. We might feel that we don’t understand how our portfolio works, for example. Or that we lack control over the time which we have to spend managing it. We might feel that we lack the power or knowledge to make the right financial decisions. We might be concerned about how our children lack the financial ability to afford a down payment – and we might feel stressed about whether we have the financial power to help them. And, of course, even the most experienced investors can feel powerless in the face of a stock market downturn.

On the surface, all of these worries and concerns are about different financial subjects. But when you actually think about it, they all come back to this central issue of control or power. Looking at financial stress in this way, it stands to reason that if we want to de-stress our financial lives, we need to focus on taking back our power and re-asserting our control over our money. In the broadest sense, here’s how we do that:

Simplify – by choosing simple, easy-to-understand investments and financial structures that require a minimum of monitoring and “mental space,” we feel more in control about what our money is doing, and how much time we must spend managing it.

Automate – when we delegate routine financial tasks, put investment decisions on “autopilot” and use professional management and guidance when needed, we feel empowered by our decisions, rather than the opposite.

Eliminate – by avoiding financial situations and circumstances that are causing undue worry and stress, we ensure that control is maintained.

Anticipate – by building contingency funds and formulating “what if” strategies to boost financial security, we take back control over our peace of mind, and empower ourselves with options and choices even in the most difficult times.

Looking at financial stress through this lens helps us determine which course of action we should take whenever we find ourselves feeling anxious about a financial topic. First, identify the source of the threat – what exactly are we feeling loss of control or power over? Then, ask yourself how you can simplify, automate, eliminate or anticipate so that you can regain that control or power (or at least some of it).

Let’s take a look at how we might put these four principles into action, by tackling some of the most common sources of financial stress.


No surprise to see this one at the top of the list. Despite its usefulness as a financial tool, debt is probably the most common cause of financial stress in people’s lives. Of course, the simplest way to gain control over your debt is to never get into it in the first place. But these days, that’s not realistic. Most of us would never have the opportunity to own our homes, for example, if we didn’t take out a mortgage.

Instead of never getting into debt, we need to learn how to minimize and eliminate it as quickly as possible – this ability can lead to immediate control over our finances, freeing up our money to spend and invest, rather than ceding power to the bank, the credit card company or the finance corporation at the car dealership. Taking control of your debt can provide a tremendous sense of accomplishment, and a good deal of peace of mind, too.

If you find yourself worried about your debt, there are three practical methods of taking back control over it:

The “snowball” method – Pay off the smallest debt first, then allocate the savings to the next smallest, and so on. The benefit here is psychological: by eliminating the number of creditors one by one, you feel a sense of accomplishment and stay motivated to keep on reducing debt.

The “avalanche” method – Start with the debt with the highest interest (usually a credit card); take the savings and apply it to your next-highest interest rate debt. The focus here is the interest savings, which allows you to minimize the total cost of your debt over time.

The “swap” method – If you have several debts held by several different creditors, or if you have high-interest loans, it might make sense to swap out all of those little debts for a single, low-interest loan, such as a home equity line of credit. This immediately cuts down your interest payments and makes it easier to track your debt-reduction progress.

Whichever method you choose, taking back control of your debt should be your most important financial priority. Your effort will pay off – both in terms of your finances, and your stress and worry levels.


This is another area that causes a lot of financial stress. And often, that stress is centred on not really understanding what you’re spending your money on. A very rough budget that outlines exactly where your monthly income is going is a pretty good way to take back a little more financial control. But to really tackle this issue, you’ll want to determine whether your spending aligns with your life priorities.

There’s absolutely nothing wrong with spending money on things, experiences and causes that matter to you. But all too often, spending indiscriminately on things of little value (or of little lasting value) can lead to a buildup of financial stress and a growing sense of our finances being out of control. We spend because it’s a habit, not necessarily because we get enjoyment out of what we’re buying.

Ask yourself: does boredom or a stressful day cause you to head to the mall or start online shopping? When things don’t go your way, do you treat yourself with expensive restaurant or takeout meals, rather than cooking at home? Is there intention or purpose to what you’re spending on? Learning a bit more about your spending patterns or emotional “triggers” can help you take back control over your spending.

Financial records and transactions

We live in an increasingly complex world. And managing our finances can be one of the most complex chores which we engage in – one that can soak up a good deal of time and effort and demand a good deal of “brain power.” No wonder many consider it to be a source of stress, as we feel that more and more of our valuable time is being eaten up by bookkeeping, filing taxes and keeping our investment records up to date.

In order to take back control of at least some of that time, it makes sense to simplify and automate routine financial transactions whenever you can. Most utilities, tax authorities and banks allow you to set up automatic, preauthorized payments from your chequing account; take advantage of these and you’ll never have to worry about missing a payment again. The same goes for your investment account: most banks, brokers and wealth managers allow you to make recurring contributions or pre-scheduled withdrawals, so that you don’t have to spend time and effort on these routine transactions over and over again.

If you’re a person who’s “collected” various accounts at various institutions over the years, you might consider extending this simplification effort by consolidating your accounts under one umbrella. It’s very simple advice, but you’d be surprised at how much less stressful your financial life can be when you have less financial paperwork and many fewer financial emails, texts, letters and other communications.

Emergencies and unforeseen situations

Life happens. And when it does, it usually costs money to fix. And that can be a significant source of stress, particularly for snowbirds living on a fixed income, or those with other financial obligations that don’t leave a lot of wiggle room in the monthly budget.

Having a ready source of cash available for life’s many emergencies – a flooded basement, an aching tooth, a short-notice flight across the country to care for an ailing loved one – can make you feel more empowered to deal with unexpected, urgent financial priorities that might otherwise derail your plans. It gives you control by providing flexibility: instead of being forced to dip into retirement capital, or to take out an emergency loan at a high interest rate, you have a cushion of cash available when you need it.

If you have the means, make it a priority to build up an emergency fund consisting of, say, three to six months’ worth of basic expenses (groceries; gas; electric and other utility bills; property tax; mortgage payments; etc.). Keep those funds in a source to which you have easy access such as a basic chequing account, or maybe a high-interest savings account so that you can earn a little interest.

Think of this emergency fund as an insurance policy: something which you hope you never have to “cash in,” but for which you’ll be endlessly thankful if you ever need it. It gives you the freedom to pursue your best life, knowing that if worse really does come to worst, it won’t be a complete financial disaster. That can be an immensely powerful feeling.

Market downturns

For those of us who invest in stocks (either directly or via ETFs and mutual funds), market volatility is something which we have to learn to deal with. And while some people can simply shrug off a market downturn and get on with life, other people react to volatility with stress. And that’s understandable: who wouldn’t be stressed to see their portfolio go down by 10%, 20% or even 30% in value within a few short weeks?

Some people believe that the only real way to eliminate this kind of worry and anxiety is to exit the stock market altogether, and invest in less volatile assets such as GICs, bonds and similar instruments. That’s certainly an option, but it might not be the wisest: by forgoing the superior returns that equities offer over the long term, you run the risk of your portfolio not keeping up with inflation. In essence, you swap the risk of volatility for the risk of outliving your money.

A better way to regain control here is to shift your investment mindset and become laser-focused on high-quality, conservative holdings that stand up better in a market downturn. An added bonus: many of these high-quality, conservatively managed holdings also generate significant and growing dividends. That stream of dividend income can soften the blow of downturns (at least to some extent).

By adapting a conservative mindset and steering clear of the high-risk/high-return startups, “hot stocks” and outright speculations that are so often the most severely affected by market volatility, we avoid the situations that cause us stress. That’s one of the best ways to retain control – over both your emotions and your long-term portfolio growth potential.

Investment decisions and portfolio allocation

Some investors enjoy the “thrill of the hunt”: searching out undervalued opportunities, analyzing stock charts, discussing company prospects online, and so on. Others consider all of that a tedious chore, or worse: a stress-filled minefield in which every wrong decision could somehow threaten to “blow up” their finances and their lifestyle.

If you’re part of the latter group, one way to eliminate that stress is to shift your decisions to “autopilot” by building a portfolio focused on passive investments – pooled funds that simply track a given market index, rather that one which tries to select winning stocks. Exchange-traded funds (ETFs for short) are ideal vehicles for such investing; an added bonus is that because such ETFs simply track a pre-constructed index, their management fees and expense ratios are usually extraordinarily low.

Of course, no portfolio can be considered to be 100% autopilot – you’ll still have to do some work selecting which ETFs you want, representing which assets, and in which world markets. And you should also commit to a regular rebalancing schedule (say, once every six months; or maybe every year), when you reallocate your positions to ensure that any one of them hasn’t grown into an overly large portion of your portfolio. But other than that, the passive ETF portfolio doesn’t require a lot of maintenance, oversight, or even involvement.

There are many online resources and financial blogs that explain such an approach; many online stockbrokers, fund managers and wealth advisors offer sample “passive” portfolios and allocations. If you find yourself stressed by the complexity of all of your portfolio holdings, or are generally disinterested in following the various ups and downs of stocks, bonds and other assets on a regular basis, a passive approach can be a great way to regain the sense of control and empowerment that comes with keeping things simple.


Once we reach a certain age (or our portfolio grows to a certain size), our thoughts naturally turn to lending a financial hand to our family members and loved ones, and donating to causes and organizations which we care deeply about. While this is certainly a noble goal, sometimes this desire to give back can lead to strong feelings of pressure, indebtedness or even guilt. There’s a name for this feeling – social debt – and, for some, it can turn an honorable, worthwhile intention into something that causes considerable stress and anxiety.

The best way to eliminate this stress is to plan. That is, instead of viewing giving as writing a one-time cheque, or as an impulsive decision that you make when some hurricane, or wildfire or other natural disaster hits some part of the world, think about your giving strategically: with care, with intention and with specific goals in mind.

Take time to set out some causes or guiding principles about what kind of legacy you’d like to put your money behind. Perhaps you care deeply about funding your grandchildren’s education. Perhaps there’s a charity or organization that’s made a deeply meaningful difference to your life. Heck – maybe your portfolio is large enough for you to set up a private foundation and foster a culture of giving within your family. Any or all of these (and many more!) can be legitimate and noble goals for your giving.

By being deliberate about it and thinking about what principles should guide your giving, you can actually simplify some of the complex decisions that often surround the issue, while eliminating the feelings of pressure or obligation that often accompany it. Instead, you’ll enjoy the feeling of empowerment that comes with knowing that your money is being put to a good cause.

Wills and estate planning

As the saying goes, there are only two things that are certain in life: death and taxes. Interestingly, both of these can cause significant financial stress. Unfortunately, we don’t have a whole lot of control over the stress which the government might impose upon us with tax rates. We do, however, have the power to get rid of the financial stress that surrounds our eventual demise.

Once again, this stress is understandable. Estate planning is complex and multi-faceted, and often requires outlay of time, effort and money (for legal advice). And let’s face it: very few of us enjoy contemplating our mortality. So, many of us put the task of estate planning off for another day. And another. And another. The result of all this procrastination is more stress.

To get out of this “stress spiral,” it makes sense to break the task down into simple steps. No matter what your personal circumstances, no matter how big your estate, your estate plan will likely cover the following points:

Will – an official legal document that outlines what you’d like to do with your assets – who gets what, and how much, and in what way.

Executor – the person (or professional company) that will act as a “manager” for your assets and make sure that they’re distributed to your heirs.

Power of Attorney – a document that provides instructions regarding your financial matters in case you lose mental capacity.

Charitable giving – a plan for making a donation or bequest or endowment to specific causes or organizations which you care about.

Communication – an essential element of any good estate plan, and one on which a lot of people fall down. By letting your family members and other heirs know your estate intentions, you can sidestep misplaced expectations, address potential conflicts and deal with potential problems before they happen.

By breaking the process down step by step and getting expert professional advice, you can simplify this complex task and minimize (and hopefully eliminate) the financial or family stresses which can crop up when we leave a big responsibility hanging over our heads.

A final word about financial stress …

Fact: stress will always be a part of our lives. But this doesn’t mean that we have to simply accept money worries as natural. If you still feel overwhelmed or troubled about your finances, seek some professional help – from an accountant, a financial advisor, a credit counsellor. With help from an experienced professional, you can eliminate financial stress and regain the feeling of empowerment and control that is the best part of putting our financial house in order.

By James Dolan