Small Money Moves that Can Help Your Mental Health

If you're feeling stressed, anxious, or overwhelmed about your finances, you're not alone. A 2024 study by TIAA finds that 42% of adults report that their money situation can take a mental toll. And when you're stressed, it can lead to feelings of scarcity.

There's psychological backing behind this. The report also indicated that when your mental health isn't in great shape, it can affect your cognitive capacity for assessing options and making important financial decisions. In turn, it can lead to impulsive spending, poor financial planning – which, unfortunately, can lead to more stress.

Here's the thing: You may need to have something major happen to improve your money situation. Small habits could make a big difference – and ultimately improve your mental health. We'll go over simple money moves to create space and potentially give a greater feeling of control:

1. Reassess your budget

We get it. It's not exactly the most exciting thing to do. But do an inventory of both your fixed expenses – which are monthly expenses that don't change; and variable expenses, which are ones that do change month-to-month.

Examples of fixed expenses include housing, insurance premiums, and personal loan and auto loan payments. Variable expenses include groceries, eating out, household items, and entertainment. You can use a budgeting app, pen and paper, or a spreadsheet to track your expenses.

From there, see what you can cut back on. If you're stressed, start with something that's relatively easy and doesn't require a lot of mental effort. For instance, canceling a subscription you don't really use. Or, if you want larger wins, shop for insurance. See if there are any discounts available, or consider making slight changes to your policy can net substantial savings. A phone call or two could lead to big savings.

2. Make adjustments to your debt payoff plan

Carve out some time to look at all your debt– this may include credit card debt, student loans, personal loans, or medical debt.

Look at the payment due date, outstanding balance, amount owed, and interest rate. From there, you might see some tweaks you can make. For instance, a simpler change could be changing the payment due date so it's more in step with when you can get paid. For example, if payday is every two weeks, you might want to change the date of one of your bills so it falls shortly after your second paycheck of the month.

Other options are to call the lender or creditor and explain that you're financially stretched. Then, see if they're willing to lower the interest rate or monthly payment amount. Note that if you lower the amount you pay each month, this stretches out your repayments, so you'll be paying more in the way of interest.

3. Pay yourself first

Setting aside a bit from each paycheck before it goes to your expenses could feel like a tough thing to ask of yourself. But even when it feels like there's zero wiggle room in your budget, aim to save just $10 or 1% of each paycheck. Or, think of that subscription you canceled and turn it into savings. Each little bit counts, and when you see your savings slowly grow, you'll feel more motivated to keep going.

To set things on autopilot, automate your savings. That's one less thing to worry about – and overtime might be pleasantly surprised to find how much you've saved.

4. Bolster your financial know-how

There's a lot to learn – understanding credit basics like credit scores, ways to make improvements to your budget, the home buying process, planning ahead for the holiday season, or retirement planning.

To avoid feeling overwhelmed, commit to spending, say 15 minutes each week to improve your financial literacy. That way, you can absorb and digest information in smaller chunks – and you'll have a greater likelihood of getting around to building your knowledge. These small incremental learnings can help make things feel more manageable.

5. Set a regular financial housekeeping schedule

Just like our laundry or dishes can pile up, so can our financial housekeeping. Tend to certain tasks regularly, such as each week or each month. Some examples include:

• Committing to making small tweaks to your budget
• Taking stock of your subscriptions and canceling ones you don't need or use
• Checking your credit score
• Ordering and reviewing your credit report
• Reviewing insurance policies
• Tracking your cash flow

When working on tasks, if you start to feel anxious, stressed or fatigued, take a pause. That way, you won't push yourself to a point where you won't feel good about tackling items off your money to-do list. In turn, you'll be able to keep a steady rhythm.

6. Stack money habits

You might have heard of the idea of "habit stacking." That's where you stack current habits with new ones. Our brains work off of established routines and patterns. This works because you're building on existing, well-formed habits and its connectedness – think brushing your teeth each morning.

You can try this with financial habits. For example, each morning when you enjoy your cup of coffee, check your bank account balance. Or, when you are doing your evening wind-down routine, double-check what bills need to be paid.

7. Seek financial guidance

You might've seen ads on social media for money coaching programs or financial advisors that cost a pretty penny. Low cost or free resources might be under your nose. Check to see if your workplace has free financial wellness one-on-one coaching. You can also request "lunch and learn" workshops on the topic of money.

Another place you can look for solid financial support is from the Financial Planning Associations (FPA)'s pro bono program. If you are seeking credit counseling, you can scour the National Foundation for Credit Counseling (NFCC's) directory of organizations that offer free or affordable financial counseling services.

Remember: the key is baby steps. Start by setting aside some time to do your research, then set up an introductory call or sign up for an info session.

Improve your money and mood, step-by-step

Climbing your way out from a place of financial stress and scarcity to one of balance and wellness is not an overnight process. Nor does it require a massive overnight overhaul. To make things manageable and keep up the momentum, you can build sound financial and mental health by devoting small chunks toward one financial task at a time.

About the author

A personal finance writer for over 8 years, Jackie Lam covers money management, lending, insurance, investing, and banking, and personal stories. An AFC® accredited financial coach, she is passionate about helping freelance creatives design money systems on irregular income, gain greater awareness of their money narratives, and overcome mental and emotional blocks.

Her work has appeared in publications such as Bankrate, Time's NextAdvisor, CNET, Forbes, Salon.com, and BuzzFeed. She is the 2022 recipient of Money Management International's Financial Literacy and Education in Communities (FLEC) Award, and a two-time Plutus Awards nominee for Best Freelancer in Personal Finance Media. She lives in Los Angeles where she spends her free time swimming, drumming, and daydreaming about stickers.

Editorial policy

Our goal at Self is to provide readers with current and unbiased information on credit, financial health, and related topics. This content is based on research and other related articles from trusted sources. All content at Self is written by experienced contributors in the finance industry and reviewed by an accredited person(s).