Reasons for Financial Stress and how to manage it


Most, if not all of us must have been under financial stress at some point in our lives.

As much as financial stress may seem like an insurmountable task, the devil is in the details.

It is how you manage and control what you can and how you react to things that are beyond your control that plays a deciding hand in elevating or alleviating your financial stress levels.

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As silly as this may sound, knowing what causes financial stress is the first step towards resolving and managing it.

There could be many reasons for the same like :

  1. Constantly worrying about being laid off at work.
  2. Not having planned for an upcoming expense on the higher side.
  3. Unable to cut down/manage high debts.
  4. Having a monthly battle to pay off your bills on time.

Tracking the source of the problem can help in more ways than one can imagine, you can only solve a problem if you recognize it, acknowledge it and work towards resolving it.

Even if you cannot resolve it, there is still a possibility to manage it.



Ideally one should keep an emergency fund equivalent to 6 months of fixed expenses, that is the thumb rule.

Covid has been a grim reminder how unpredictable life is, therefore it is better to have an emergency fund that will last a year. It is always better to have it and not need it than to need it and not have it.

With rising inflation annually, your emergency fund will need to reflect that with the means of an increased contribution towards your emergency fund.

If prices are on the rise then so are your fixed expenses, therefore your emergency fund should also see an increased contribution.

Having money in the kitty gives you options you otherwise would not have realized you had, for example if you have saved up enough in an emergency fund that will take care of your fixed expenses for the next 1 year, that will allow you to not take the very first job offer you come across and instead allow you the privilege to wait around for something that makes you really look forward to go to work.

Click here to read about the value of money and your relationship with it


You do not always need a strong reason to save, just save.

Often people procrastinate over long term goals like retirement planning, purchasing a house, as planning can be perceived as complicated and thereby never get to saving and investing for long term goals.

Availability of easy credit also plays a part here which is another unnecessary hassle in itself.

Imagine the number of times you have spent carelessly, like that time you bought that latest phone equivalent to 2-3 months of your salary or when you go out more times than you can financially afford to.

No matter how much you earn, if you do not save then you will always be dependent on the next salary.

If you can spend without much planning and thinking then you can save without much planning and thinking.


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Budget everything and try staying within your means.

Tracking your spending does not mean only having a mental calculation of your expenses.

Once in a while you need to write down your expenses since writing it down helps in the sense that it makes your expense feel real.

Note down unnecessary expenses and avoidable expenses, no matter how trivial they may seem cause of the accumulation of such ‘trivial’ expenses in the long run can cause a hole in your pocket.

Pay your bills on time, wherever possible try availing discount rates on paying before due date and avoid impulsive shopping and minimize dining out.

Prioritize your needs before wants and see how your expenses take a dive. 




Today we have options aplenty in newer spaces of investments like PMS, AIF, Mutual Funds, Direct Equity, etc. besides the obvious savings account and a fixed deposit.

Always keep an eye if the product is regulated, if not then stay away.

Do not venture in to any investing journey if you do not understand the basics of it nor have a qualified professional to guide you, it never ends well.

No investment should keep you awake at night nor occupy your thoughts for majority of the day, your investments are meant to make your life simpler and not complicated.

Click here to read why you should not invest based on past returns



Lifestyle inflation is the worst form of inflation since it is self-induced.

Understanding the difference between your needs and wants is a good start but implementing your understanding is what eventually makes the difference.

Peer pressure is real, you may want a fancier car, smartphone and an even more expensive holiday than the last one since the pressure to showcase you are living a luxurious life is never ending.

Stay humble, stay stress free.

Even though lifestyle inflation is self-induced, the trigger point for that is mostly external.


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When you avail the services of a qualified professional for his expertise, you pay him a price for his skills and experience.

When you invest without any expert and research backed input based on half baked information from friends, relatives, colleagues, etc. you pay the cost of it in the form of losses in various ways be it excess taxation, drop in valuation, poor investing experience, etc.

Nothing worthwhile is free and so is the case with a professional qualified and certified to manage your finances.

You will need patience, the ability to sit tight through several lull phases and volatility but keep in mind this is the price you pay for growth.

Look at it as paying fees for your rewards, growth does not come from a place of comfort.


Things will not always go as planned, that is a given.

You can always control what you can, mostly your behavior but also remember that how you manage what you cannot control will eventually decide whether your money transforms in to wealth.

Do not compare your journey with that of someone else, money may or may not bring you happiness but it definitely makes your life more comfortable.

If you do not respect your hard earned money then do not expect it to respect you back.



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Disclaimer : While due precaution has been undertaken in the preparation of this article, The Mutual Fund Guide or any of its authors will not be held liable for any investments based on the above article. The above article should not be considered financial advice and has been published only for your perusal. Due credit has been given in case wherever required, in case you feel any part violates any rights then do get in touch with us and we shall get it duly removed.  
Mutual Fund investments are subject to market risks. Please read the offer document carefully before investing

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