Westend61/ Getty Images

Creating a budget can help you cope with financial stress


In a new study, many consumers who set and use a budget said it helps improve their mental health and well-being by giving them a sense of agency over their finances.

The content on this page is accurate as of the posting date; however, some of our partner offers may have expired. Please review our list of best credit cards, or use our CardMatch™ tool to find cards matched to your needs.

If financial stress and anxiety are eating away at you this winter, you may be tempted to look away from your money troubles in order to cope.

But there’s a good chance you’ll feel better if you face your financial challenges head on and take small but meaningful steps in the right direction. One little trick that could help: Try setting a personal budget for yourself – not just for the sake of saving money, but also to boost your emotional health.

According to a recent survey by the Certified Financial Planner Board of Standards, many consumers who set and use a budget said that it helps improve their mental health and well-being by giving them a sense of agency over their finances. For example, among a small online sample of consumers between the ages of 35 and 65:

  • 62 percent of budgeters said their budgets made them “feel more in control” over their money.
  • 55 percent said it boosted their confidence.
  • 52 percent said it made them “feel more secure.”

Respondents who didn’t set a budget, on the other hand, were more likely to report feeling out of control or anxious or buffeted by stress, the survey found.

“Having a household budget positively affects a consumer’s emotional state by reducing stress, anxiety and frustration,” said the CFB Board in a news release.

Although a budget can’t fix structural issues affecting your finances – such as unemployment, a low income or excessive bills – it can at least make you feel more confident about staring down your financial challenges and surviving them. That, in turn, could give you the inspiration you need to keep chipping away at your debt, trimming your spending or doing whatever else it takes to bounce back financially.

See related: Financial infidelity poll: 20 percent say a secret account is worse than an affair

A sense of control can provide powerful anxiety relief

Taking small actions that help boost your sense of control – such as setting a budget – may also help tamp down the physical effects of financial anxiety, such as losing sleep, developing stomach aches and other physical symptoms or feeling perpetually on edge.

A number of studies have found debt and other forms of financial stress can have a costly impact on your physical and mental health. But some also suggest that developing a sense of control or a can-do attitude toward your challenges may help lessen your anxiety and protect you from some of the damaging effects of stress.

For example, a 2018 study published in the medical journal BMJ Open found women who felt a sense of purpose and control over their lives were less likely to suffer from anxiety – even if they were dealing with severe financial challenges. Women who felt powerless over their circumstances, on the other hand, were more likely to be anxious.

“This study sheds light on inner strengths or qualities that we may have which can protect us from anxiety when we’re exposed to hardships,” said study co-author Olivia Remes in a news release.

Although some people are more resilient by nature, you may be able to help lessen your anxiety by encouraging some of those same qualities in yourself.

For instance, if you struggle with self-confidence toward your money problems, you may find it helpful to read more about personal finance so you feel equipped to handle whatever comes your way.

A 10-year study of young adults funded by the National Endowment for Financial Education found financial self-confidence – the belief that you can master your financial to-do list – is a key predictor for success.

“Perhaps not surprisingly, we found that well-being was significantly correlated with financial capability, particularly financial self-confidence,” wrote researchers in a May 2017 report.

Similarly, drafting a budget and identifying steps you can take to improve your circumstances may help soothe your fear of the future. You may even find it helpful to download a budgeting app so that you can keep track of your progress more easily and feel as if you are continuing to take steps in the right direction.

See related: How to create a budget, stick to it and save using apps and card rewards

A budget is not a cure

Drafting a budget and making other proactive money moves may not fix your problems completely – at least not right away. If you’re suffering from clinical anxiety, you may also need additional support, such as medication or therapy. However, it could at least help shift your mindset so that you feel less overwhelmed or paralyzed by stress.

Editorial Disclaimer

The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

Credit Card Rate Report
Cash Back

Questions or comments?

Contact us

Editorial corrections policies

Learn more