How to Reduce Financial Stress

In a recent study, Manila was hailed as one of the most expensive cities to live in the Southeast Asian region. Ironically, the Philippines is one of the countries that has a low average income. Hence, it is common to see Filipino families having some form of debt. It may be a home loan, car loan, credit card debt, tuition loans, or the usual loan sharks (locally known as 5-6). My husband and I, and other families I know have experienced financial stress especially now during the pandemic. Debts have piled up and the income flow is not consistent at this season.

An increase in financial stress can decline our health and it is important for us to carry out actions that can help manage our debt and reduce our financial stress.

What is Financial Stress?

The Financial Health Institute describes financial stress as a state that resulted from financial events that may create anxieties or a sense of deficiency. It is our body’s response to the problems that occur in our finances. 

In a Social Weather survey made in 2020, 9 out of 10 Filipinos are stressed due to the pandemic. A lot of companies have closed at that time and at least 2.3 million Filipinos lost their jobs or are under a “no work, no pay” scheme. The uncertainty of the pandemic has increased the financial stress that Filipinos were already dealing with.

Managing our financial stress is directly proportionate to how we manage our finances. Minimizing our debts can significantly reduce our financial stress. Whether you are single, a breadwinner, or head of the family, these tips can help you manage your finances and reduce financial stress.

Tips to Manage Our Finances and Financial Stress

Identify your stressors

Check your current financial situation and identify which debts or situations cause you stress. Recognizing which triggers your anxiety can help you plan out your finances better. 

Track your spending

Keep a daily list of what you spend on. Bring out all your loan statements, bills, receipts, and list them. Categorizing your expenses also helps you pinpoint the things that are eating most of your budget, and which you can let go of when you plan your budget.

Develop a budget

A budget simply shows how much money comes in and how much is going out. Creating a financial plan will help you check and balance your income against your expenses with the aim of analyzing spending and meeting goals. 

Pay Your Bills in Full

When you pay your bills in full and on time, you avoid paying higher interest and late fees. If you can’t pay your bill in full, make sure to pay more than the minimum amount required by your creditor.

Pay Off Your Debt Starting with the Smallest

If you have multiple debts, make sure to pay off first the one that has the smallest value. If you begin paying off the biggest one, it will take a toll on your finances and may make you quit because of the long time it takes to tick it off your list. By paying off first the debt that has a smaller value, you will be more motivated to continue in your plan to be debt-free since you see faster results.

Consolidate Your Debts

If you have more than one credit card or have multiple debts, you may also opt to consolidate your debts. By obtaining a consolidated loan, you will better manage your debts since you will be paying to only one creditor instead of several. Consider getting the one with the lowest interest rate. Learn more at

Increase Your Income

If your current cash flow is not enough for your expenses and to pay off your debts, look for different ways to increase your income. You may consider selling some of the things that you no longer use. Getting a part-time job or a side hustle is also a good plan to make more money in your household.

Take Care of Yourself

An important aspect in managing your finances and financial stress is maintaining a good and proper mindset. Safeguard your finances and mental health by making sure that you have enough rest, exercise, and healthy food. We sometimes forget that in order to care for our mental health, we need to provide the best food and rest to our bodies. Take those morning/afternoon strolls, do yoga or meditation, do things that make you alive. Develop the habit of gratefulness and write down the things you are thankful for and happy for. When we practice the habit of gratefulness, we attract positive energies that help us maintain a good disposition in life and in turn is reflected in our finances.


  1. Thank you for sharing this tips po mommy Kat how to manage the financial stress. Isa sa nga gusto ko po na tips eh alagaan pa rin ang sarili at wag magpaka stress. Gumawa ng mga way at manalangin po sa Diyos na gabayan.


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