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Stress: the surprising effect on your work and finances, and what to do about it?

Stress: the surprising effect on your work and finances, and what to do about it?

Let's be real - stress is unavoidable these days. Did you know a recent study by the American Psychological Association found money to be the leading source of stress in America, affecting over 72% of adults?

Whether it's deadlines at work, money woes, or just trying to manage all the demands of modern life, we've all been there. But have you stopped to think about just how much that stress could be affecting your career and finances?

It's a vicious cycle. Stress makes it hard to focus and be productive at work. And when it comes to your finances, well, money struggles just pile on even more stress, making it tough to make smart money decisions.

This guide will help you by breaking down exactly how stress affects your work life and bank account. More importantly, you will read practical tips for getting that stress under control once and for all. Let's get started!

Effects of stress on work

  • Decreased productivity

Stress reduces workplace productivity. A study by the Anxiety and Depression Association of America (ADAA) found that stress decreases efficiency and lowers output, which affects job performance.

Oboreh et al. (2016) conducted a study to examine the effect of stress on employee productivity in the Nigerian banking industry. The study found that stress hinders the effective performance of employees.

  • Poor decision-making

Stress impairs decision-making processes by affecting the prefrontal cortex, the part of the brain responsible for cognitive behavior and decision-making. Research published in the Journal of Neuroscience indicates that stress leads to impulsive and poor decisions, which impact personal and professional lives.

Anthony J. Porcelli and Mauricio R. Delgado (2009) conducted a study at Rutgers University, USA, to investigate the effect of acute stress on financial decision-making. The research involved participants who were subjected to stressful conditions before making financial decisions to understand how stress influenced their risk-taking behaviors.

The researchers used a combination of experimental stress induction and control phases to observe the changes in decision-making. According to the findings, participants' decisions were more influenced by gains and losses when stressed compared to when they were not stressed. This suggests that acute stress modulates risk-taking behavior, exacerbating biases in financial decision-making.


  • Increased absenteeism

A report by the European Agency for Safety and Health at Work (EU-OSHA) shows that work-related stress costs European employers an estimated €730 million annually. Employees under stress are more likely to experience health issues, leading to higher absenteeism rates and lower productivity.

  • Burnout

A report by the World Health Organization (WHO) classifies burnout as an "occupational phenomenon" resulting from chronic workplace stress that has not been successfully managed. It is characterized by three dimensions – feelings of energy depletion or exhaustion, increased mental distance from one's job or feelings of negativism or cynicism related to one's job, and reduced professional efficacy.

  • Interpersonal relationships

Stress affects relationships with colleagues and supervisors. It leads to poor communication, increased conflicts, and a negative workplace atmosphere.


  • Job satisfaction

Chronic stress is strongly linked to decreased job satisfaction. Naser Hoboubi et al. (2017) conducted a study at Shiraz University of Medical Sciences in Iran to understand how job stress and job satisfaction impact productivity in a petrochemical company. They surveyed 125 employees, asking about their stress levels, job satisfaction, and how productive they felt at work.

The results showed that employees experienced moderate to high levels of job stress, had moderate job satisfaction, and were moderately productive. They found that when employees were more satisfied with their jobs, they tended to be more productive. However, high job stress did not directly affect productivity.

The study highlighted that having clear job roles, supportive supervisors, and better work schedules could help reduce stress and improve both job satisfaction and productivity. The researchers suggested that companies should focus on these areas to create a more positive and productive work environment.

Effects of stress on finances

  • Poor financial decisions

Financial stress leads to impulsive and poor financial choices. Christian E. Weller and Amy Helburn (2010) conducted a study at the University of Massachusetts Boston to understand how financial stress controls people's money decisions. They wanted to see how stress from having little financial security affects saving, borrowing, and investing.

They found that households with fewer financial assets felt more stressed and this stress led to more short-term and sometimes poor financial decisions. 


  • Increased healthcare costs

Stress-related health issues massively contribute to healthcare costs. American Institute of Stress estimates that stress-related illnesses add $300 billion annually to healthcare costs.

  • Lower earnings

Stress leads to decreased work performance and loss of income or career opportunities. Individuals under stress struggle to meet job expectations, leading to fewer promotions or raises.


  • Debt accumulation

Stress can result in poor financial management and debt accumulation. The connection between stress and debt is often cyclical, with financial stress resulting in poor management and vice versa.

Strategies to manage and mitigate stress

Here are three types of strategies to manage your work and finance-related stress.


  • Workplace strategies

    Manage your time 

    • Start your day by creating a prioritized to-do list, focusing on the most important tasks first.
    • Break larger projects into smaller, manageable tasks with realistic deadlines.
    • Use a calendar or time-tracking app to schedule your tasks and avoid overcommitting.
    • Learn to say "no" to non-essential tasks or requests that may overburden you.

    Set your boundaries

    • Set specific work hours and stick to them as much as possible.
    • Avoid checking work emails or taking work calls during your personal time.
    • Communicate your boundaries clearly to colleagues and supervisors.
    • Schedule dedicated "me time" in your calendar for self-care activities.

    Get support

    • Find a trusted colleague or mentor with whom you can discuss work-related challenges.
    • Attend stress management workshops or seminars offered by your workplace.
    • Suggest starting a support group within your organization for employees to share and learn coping strategies.

    Make your work environment healthy

    • Advocate for regular team-building activities to develop positive relationships with colleagues.
    • Encourage open communication and feedback within your team or department.
    • Suggest implementing wellness initiatives, such as on-site yoga or meditation classes.
    • Lead by example by taking breaks, practicing mindfulness, and maintaining a positive attitude.

    Try to build a healthy relationship with your employer 

    Instead of letting work stress accumulate, be proactive and communicate with your employer about accommodations that promote your mental health. Here are some suggestions:

    • Schedule a meeting to discuss your needs with your manager or HR representative. Come prepared with specific requests and be ready to explain how the changes benefit your productivity and the company.
    • Ask about options for flexible work arrangements like adjusting your schedule to start/end earlier or later, working remotely a few days per week, or having a condensed workweek.
    • Inquire if the company can provide dedicated spaces for private meditation/relaxation rooms, quiet areas for breaks away from your desk, or outdoor seating areas to get fresh air.
    • Propose starting an employee wellness program with activities like on-site yoga, meditation, mindfulness classes, lunchtime walking clubs, or workshops on stress management techniques.
    • Suggest an employee assistance program (EAP) if not already offered, providing confidential counseling services, referrals to mental health professionals, and resources for managing stress and anxiety.
    • Lead by example in prioritizing self-care and work-life balance. When you model healthy habits, it encourages a culture shift.
    • Express appreciation when your employer accommodates your needs. A little gratitude improves a positive relationship.

    • Financial strategies

    Make a budget

    • Track your income and expenses for at least three months to understand your spending patterns.
    • Create a detailed budget, allocating funds for necessary expenses, savings, and debt repayment.
    • Automate your savings and bill payments to minimize the risk of missed payments or overspending.
    • Regularly review and adjust your budget as needed to align with your changing financial goals.

    Save something for emergencies

    • Set a goal to save 3-6 months' worth of living expenses for unexpected emergencies.
    • Automate transfers from your checking account to a dedicated emergency fund account each month.
    • Resist the temptation to dip into your emergency fund for non-essential expenses.
    • Replenish the fund as soon as possible if you need to use it.

    Book a financial counseling session

    • Research and select a reputable financial advisor who aligns with your goals and values.
    • Be prepared to discuss your current financial situation, future plans, and risk tolerance.
    • Implement the recommended strategies and make adjustments as needed.
    • Schedule regular check-ins with your advisor to review your progress and make necessary changes.

    Manage your debts

    • List all your debts, including balances, interest rates, and minimum payments.
    • Prioritize high-interest debt and create a plan to pay it off first.
    • Explore debt consolidation or balance transfer options to simplify payments and potentially reduce interest rates.
    • Temporarily reduce discretionary spending to allocate more funds toward debt repayment.

    • Personal strategies

    Keep your body active

    • Identify physical activities you enjoy, such as walking, cycling, or dancing.
    • Set realistic goals and gradually increase the duration and intensity of your workouts.
    • Find an exercise buddy or join a local fitness group for accountability and motivation.
    • Incorporate physical activity into your daily routine, such as taking the stairs or walking during lunch breaks.

    Mindfulness and meditation

    • Start with simple breathing exercises or guided meditations for beginners.
    • Dedicate a specific time and a quiet space with a meditation cushion for your mindfulness practice.
    • Explore different meditation apps or join a local meditation group for guidance and support.

    Eat healthy 

    • Plan and prepare nutrient-dense meals in advance to avoid unhealthy choices when stressed.
    • Limit your intake of processed foods, caffeine, and alcohol, which can exacerbate stress symptoms.
    • Stay hydrated by carrying a water bottle and drinking water throughout the day.
    • Experiment with stress-reducing foods like leafy greens, fatty fish, and fermented foods.

    Sleep on time

    • Make a consistent sleep schedule and aim for 7-9 hours of sleep each night.
    • Create a relaxing bedtime routine, such as taking a warm bath or reading a book.
    • Make sure your bedroom is cool, dark, and free from electronic distractions.
    • Avoid consuming caffeine, nicotine, or large meals close to bedtime.


    The best way to deal with stress at work and with money is to work on it from all sides. Following practical steps for your job, money situation, and personal care will help reduce stress, improve focus and decisions, avoid burnout, and build long-term financial stability.

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