How to handle money stress in the family

Money stress is a common challenge faced by families everywhere. A recent Financial Stress, Anxiety, and Mental Health Survey found that 54% of the American adults polled feel stressed or anxious about their finances at least three days a week. And a whopping 87% say they experience financial stress at least once a week. So, if you ever have financial anxiety, you’re not alone!

To help families manage money stress, we’re exploring some common causes and ways to prevent stress through positive habits you can build together.

What causes money stress?

Various things can cause money stress, which can look different for every family. Some common causes of money stress include:

• Unexpected expenses. Medical bills, car repairs, or home maintenance can throw even the best budget off track.

• Debt. Credit card balances, student loans, or other debts can feel overwhelming.

• Uncertainty about the future. Concerns about job security, retirement savings, or the always-rising cost of living can cause anxious feelings.

• Living beyond your means. Spending more than you make can lead to constant financial worries.

• Lack of financial planning. Without a clear budget or savings strategy, it’s easy to lose sight of your broader goals and feel a lack of control over your financial future.  

7 practical ways to handle money stress in the family

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Pick one or two of these ideas, and you will be on your way to better money stress management. 

1. Create a family budget

It’s hard to know what you can spend when you don’t know what’s coming in and going out weekly (or daily!). This is where a family budget comes in. Your budget can take many forms: a spreadsheet, an app, or even an old-school notebook and pencil. Either way, try to involve the whole family (kids, too), so everyone feels a sense of responsibility and ownership.

Remember that budgeting requires consistent attention to work effectively. If you’re new to this, start with these basic budgeting principles. 

2. Build an emergency fund

An emergency fund is savings you set aside to cover unexpected expenses. Think of it as your family’s financial safety net when life throws you a curveball—like an unexpected car repair, medical bill, or job loss. If you’re just getting started, don’t feel pressured to save a large amount right away. Focus on starting small and building gradually over time. 

3. Set financial goals

Setting SMART goals (specific, measurable, attainable, relevant, and time-bound) helps reduce money worries, allowing a sense of purpose and control. This works for both short- and long-term goals. Set goals for an upcoming birthday or holiday, a family vacation, or a teen going off to college. Include the whole family in goal-setting so everyone feels invested and committed to reaching them.

4. Find creative ways to increase your income 

Sometimes, the most effective way to tackle money stress is by boosting your income. (We know; easier said than done!) But if you have extra time and marketable skills, picking up a side hustle or exploring new income streams can make a big difference. Think about your hobbies (can you bake and sell cookies, or create handmade crafts to sell?), skills you can turn into freelance work (writing, graphic design, tutoring), or selling unused items (clothes, furniture, maybe that bike you haven’t pulled out of the garage in 5 years!). Even a slight income boost can help reduce money stress and give you more flexibility in your budget.

5. Keep the lines of communication open 

Being open and honest about money with everyone in your family can help reduce tension. And it takes some of the pressure off you as parents if everyone in the household is on the same page. You can plan family meetings specifically to discuss finances or do it over family dinner once a week. This also gives your kids a chance to ask questions they may have in a calm environment. Openly discussing finances can foster trust and equip kids with essential know-how for the future.

6. Automate as much as possible

Make your finances as simple as possible by removing the need to remember to make payments or transfers. Set up automatic transfers to a savings account for your emergency fund or other goals, and sign up to pay your bills automatically whenever available. By not having to think about transferring money or paying monthly bills, you’ll free up mental space and spend less time worrying about day-to-day finances.

7. Get professional advice

One of the best ways to tackle financial stress is by getting help from an expert. A financial advisor helps create a plan to manage debt, save for goals, and even invest for the future. There are also community organizations, online tools, or non-profit credit counselors who can provide help if a financial advisor isn’t an option. These are all good ways to get clarity and outline actionable steps to help manage money stress.

How to prevent money stress with positive family habits

We can’t always control money stress or when it strikes. But we can incorporate some positive financial habits that will help the entire family when it does. Here are a few to try:

• Teach your kids financial literacy. Help your kids and teens understand budgeting, saving, and spending wisely.

• Give your kids a job. Let kids earn money through chores or side jobs to teach them about effort and reward.

• Plan check-ins. Have weekly or monthly family meetings to review the budget, check on progress, and adjust goals as necessary.

• Celebrate successes. Take time to acknowledge big wins like paying off a debt or meeting a savings goal to keep motivation high.

• Focus on teamwork. Emphasize that everyone’s efforts, no matter how big or small, contribute to reducing money stress.

One of the keys to managing money stress in your family is to plan and prepare for the unexpected together – while balancing healthy family relationships over financial perfection. 

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