8 Ways to Reduce Financial Anxiety for Single-Income Families

Money causes stress for all types of people, but especially families working to get by on a single income. Here's how to conquer the anxiety.

An image of a woman holding money.
Photo: Getty Images.

Managing the anxiety and emotions related to money can be challenging for any parent. But for single-income families surviving on just one stream of cash, that anxiety is multiplied.

Juggling bills, balancing a monthly budget, setting aside money for unexpected expenses, saving for retirement, and paying for all of the extras associated with child-rearing...all of it can seem like an impossible task (or at the very least a task that requires a great deal of constant and thoughtful planning) when there's just one breadwinner. But as many families in this situation have learned, it can be done—you just need to find tools and tactics to help reduce the stress along the way.

"Quite often, feelings of fear and anxiety stem from…simply perceiving that we're out of control of our circumstances and these sentiments can be particularly prevalent when it comes to single-income families," Carrie Casden, financial wellness coach and president of Summit Financial Management, tells Parents. "When a family's livelihood is dependent on one person, these anxieties are compounded by what is perceived as a heightened level of pressure on that sole earner."

The first step in reducing financial anxiety is really understanding the basic financial, and emotional, concepts that will set a family up for success, both in the present and the future.

Here are some of the ways experts say you can reduce anxiety when living on a single income.

Make a list of priorities and values

By simply putting your goals on paper, you can ensure that dollars are being spent (and saved) in ways that will maximize your family's joy and vitality, says Casden.

"Are you saving to buy a house? Paying down debt? Hoping to allocate more towards investments?" says Casden. "Families usually have quite a few financial goals they're aiming for, but if there isn't enough income to cover the list of expenses, that's perfectly fine—you can make adjustments to the categories lowest on the list and continue to reassess over time."

Knowing this list is intentionally fluid is important, too, adds Casden, because money ebbs and flows, and should be consistently evaluated to make sure that the priorities are in alignment with income levels and the family's needs at a given time.

Understand your money patterns

Do you tend to be overzealous with spending? Are you cripplingly frugal? Or do you tend to avoid finances because they make you anxious? Do you have a "spend too much" or a "don't make enough" problem? These are all important questions to ask yourself as you begin to re-assess your financial life, continues Casden.

"There are different ways to reduce anxiety based on the actual issues at hand, which is why I work with clients to help them identify their specific money archetypes to understand the origin of their anxieties and behaviors around money."

Emotionally, it's also important to "check your ego," so to speak, adds Casden.

"Comparison and scarcity mentality are quite common when it comes to our financial lives but should never be a part of any financial plan," she explains. Acknowledging this is a crucially important step in approaching a family's money map."

Develop a family financial plan

This is where you actually lay the numbers out. You can use a simple spreadsheet that details your expenses versus your income in order to create a realistic and prudent financial plan and budget, says Casden.

And in order to minimize anxiety surrounding money, you'll want to keep a few essential guiding principles in mind when developing the family's financial plan:

  • Spend less than you earn. This helps to establish realistic budgets that help you reach your goals as a family.
  • Maintain savings and rainy-day funds for security and future planning.
  • Patience is key. Waiting for investments to compound and grow over time is the secret sauce.
  • Auto-pay saves the day. Knowing your bills are being paid automatically and on-time is a great way to alleviate anxiety (and costly late-fees).

"When there's only one source of income, establishing a personal spending plan allows individuals to regain control over their spending thus decreasing feelings of frustration and fear of the unknown," Ann James, an accredited financial counselor and CEO of Financial Freedom Battle Buddies, tells Parents.

Track how your spending makes you feel

We're all familiar with the idea of keeping track of your spending to see where you can cut back. But Dr. Elizabeth Dunn, Ph.D., happiness researcher and Chief Science Officer at Happy Money, encourages people to look at it this task from a different perspective and track the way their spends make them feel.

"Pay attention to how purchases make you and your family feel," Dunn tells Parents. "What purchases bring your family joy and which lead to feelings of regret or sadness? Maybe a long and expensive dinner out did not end up saving anyone time, and the regret over spending all of that money on one meal was not worth the spend. But your Hulu or Netflix subscription means the entire family can have a movie night together once a week, and that brings joy to the entire family."

Identifying these 'happy spends' and 'sad spends' can help you shift your spending toward purchases that reduce financial stress and bring joy to the entire family.

Treat money as a tool

Related to the concept of happy spends and sad spends, single-income families can benefit from realizing the amount of money they have matters less than what they do with it. The key is figuring out how to use money as a tool to boost mental health and happiness—whether you have a little or a lot of it.

"For instance, we know from research that people tend to get more satisfaction from purchasing experiences rather than things. So don't get caught up in purchasing expensive things; instead, find ways to provide meaningful family experiences," says Dunn. "Try to get the whole family involved in the anticipation and planning for an experience, vacation, or staycation to maximize the joy it provides. Even an excursion to a local attraction, like the zoo or county fair, can provide kids with something to look forward to and enjoy."

Create an emergency fund

For single-income families, having money set aside specifically for unexpected expenses is a must in order to reduce financial stress. Doing this does not require a large amount of money. Just get started with whatever you have, and work from there.

"Having an emergency fund in place prepares you for curveballs that may arise. Knowing you have extra money in the bank provides a peace of mind that is priceless," says James, who recommends eventually setting aside enough to cover three to six months of expenses.

Take time to deal with your feelings about money

Taking the time to reflect on your feelings about money will allow you to begin feeling less stress and anxiety about your finances, suggests Dunn. It's important to build skills for addressing your financial stress and start to create more positive thoughts and actions related to personal finances.

"For example, instead of dedicating so much time worrying about how far your budget will go this month and what you cannot afford, think about the small actions you can take to save money this month and begin to build up your savings account," explains Dunn.

Need a little help getting started with this task? The Happy Money Science team recently developed a program to make it easier to reduce stress around finances and establish money mindfulness. Peace is free for any family and utilizes principles from cognitive behavioral therapy and psychology to help people understand and reduce the impact of financial stress on their lives.

Those who sign up can also receive simple exercises via email that are broken down into small digestible bites. As an added bonus, everything is personalized to you and designed to build skills for addressing stress levels and promoting more positive thoughts and actions.

"It's been especially meaningful to see how Peace has helped people dealing with the financial and social impacts of the pandemic," says Dunn.

Talk it out

Often, discussing money can feel embarrassing or even seem taboo, but don't let those feelings stop you from seeking the assistance of a financial professional who may be able to help with your situation, says James.

"Seeking assistance from accredited financial counselors, credit or housing counselors, or financial therapists can help alleviate feelings of shame and ultimately reframe an individual's thoughts and relationships with money," says James.

Was this page helpful?
Related Articles