Most people have money problems. The problem might not be that they don’t have enough capital, but that they feel they don’t. And really, what’s the difference? If you go to bed at night under a cloud of debt-related anxiety, you need help dealing with the psychological aspect of money, regardless of how much you have. 

In this article, we take a close look at what role psychology plays in finance. 


More than three-quarters of all Americans feel stressed about money at least some of the time. Even when they are able to pay their bills, many people feel the idea of debt or things going wrong hanging over them like a cloud. 

Yes, things are good right now, but what if the heater clocks out? And the car has been making a strange sound on right turns. An expensive sound and—

And it’s easy for a stable financial situation to sour quickly. The anxiety comes about because there is often a degree of realism to these fears. Expensive repairs come up. Employment statuses can even shift. And when these things happen, they can have a major impact on your lifestyle. There are a few things to keep in mind if you are feeling stressed out about financials. 

It’s Not a Permanent Situation

Debt can certainly feel inescapable but remember, one way or another, relief is out there. There are many avenues that your experience with debt can take but they can be summed up in two general categories: either you pay what you owe, or you don’t. 

Loans all have a payment period. Your mortgage is usually between fifteen and thirty years. Your car is usually six years or less, and so on. Long periods of time, sure, but there are also ways to tweak them into your favor. 

For example, if you don’t want to spend the next thirty years paying off your house, you can strategize. Right now interest rates are through the roof. In a few years, they probably won’t be. When things cool down, it will be possible to refinance into a shorter loan term, often keeping your payments the same or lower than what they once were. 

Same goes for everything else. If you whittle away at debt as deliberately as you can, you’ll often find that there are many ways to knock it down a few pegs. 

Well, that sounds pretty good. Ahem. I believe you said something about not paying it off at all?

Right. The nuclear option. You don’t want to go this route if you don’t have to, but there is — and try not gasp — bankruptcy. Yes, it will tank your credit score, and change your lifestyle considerably, but it will also help dig you out of debt. 

In general, you want to be a good borrower. Paying bills on time and maintaining a great credit score makes it easier to get loans, and even get better terms when they come around.  

How you tackle debt is a very personal and (hopefully) strategic process. The point here is simply that all roads lead out of the storm eventually. 

Not Every Worst-Case Scenario Comes True

At least not right away. Cars conk out, and so do expensive home appliances, and people’s employment status changes, but these things rarely happen all at once. With the right financial planning, you can figure out how your family will process setbacks and bad situations. 

Most experts recommend having between three and six months of income set aside in case of emergency. There are ways to raise capital even when saving is hard. For example, a home equity line of credit allows you to tap into your home equity if you get in a tight spot. 

Of course, that’s in no way an official recommendation — merely a spotlight on one of your options. If you are worried about how you will pay bills it’s a good idea to speak with a professional and see what they recommend for tackling your debt issue. 

Speaking to a Professional

Financial advisors or accountants are well-positioned to look at your specific financial situation and make recommendations that make the most sense for your family. Really good experts will be able to give you a roadmap to paying off your debt — a plan that will usually help you get out faster. 

These professionals do cost money — a little ironic but natural — but the amount they will save you on interest, in the long run, is staggering. 

There are also professionals that help you deal with the emotional side of money. 

Applied Versus Clinical Psychology

Clinical psychology is what most people think of. You sit down with a psychologist and talk about what’s on your mind. They evaluate your mental health and make recommendations. In the context of dealing with financial stress, you’ll probably wind up with something that looks a little like this category —though we will talk specifics in a minute. 

Applied psychologists take a broader look at social mindsets. For example, they would look at the figure we talked about earlier in the article — more than three-quarters of Americans worry about money —and try to answer the question of why. 

Their work might not benefit you specifically as an individual, but it will research how to influence and shape cultural norms for the better. Both can play an important role in dealing with financial-related stress. 

Financial Therapy

Financial therapy is for people who need a combination of financial recommendations, and psychological support. These professionals understand finance, but they also know how to help people handle and process their emotions. 

Their services will be more like that of a clinical psychologist than an applied one. Financial therapists are good for people who feel overwhelmed by their money-related stress. Often, the worry, the anxiety, and the dread, are the hardest things to deal with when money is tight. 

These feelings not only make it difficult to function but they can also cloud your judgment, leading to more bad financial decisions down the line.