Managing financial stress during a pandemic

Shelly Gigante

By Shelly Gigante
Shelly Gigante specializes in personal finance issues. Her work has appeared in a variety of publications and news websites.
Posted on Jul 27, 2020

Whether you worry about contracting COVID-19 or not, chances are you share in the financial stress felt by millions during the last few months.

Many who have taken a pay cut or lost their job during the pandemic are worried about what will happen when the federal unemployment checks may come to a halt. In other cases:

  • Pre-retirees have been forced into early retirement, ready or not.
  • Consumers have racked up credit card bills to make ends meet.
  • Small-business owners are struggling to stay afloat.
  • Investors have discovered (amid market volatility) that they weren’t as tolerant of risk as they thought.

“We have clients who spent their entire careers building up sweat equity so they could purchase the restaurant or small business of their dreams, only to see that business have to shut its doors for months on end as a result of the virus,” said Daniel Drabinski, a MassMutual financial professional in Dallas-Fort Worth, Texas. “Other clients purchased real estate with the plan of converting the property to rental income, only to see that opportunity dry up when shelter-in-place orders took effect.“

While many of his clients found some relief through government aid or Paycheck Protection Program (PPP) loans, he said, in most cases that has proven to be a temporary fix. As lawmakers debate additional relief measures for families that have suffered a financial setback since the pandemic began, there are steps you can take today to help put some of your fears to rest. But first, a look at why controlling stress is important.

The stress effect

During an infectious disease outbreak, the Centers for Disease Control and Prevention reports that the following physiological and emotional symptoms are most common:

  • Fear and worry about your own health.
  • Changes in sleep or eating patterns.
  • Difficulty sleeping or concentrating.
  • Worsening of chronic health problems.
  • Worsening of mental health conditions.
  • Increased use of tobacco, alcohol, and/or other substances.

Financial stress, in particular, is also associated with relationship problems. Psychology Today notes on its website that money plays a vital role in the quality of life and “those who have it are generally happier, have better health, greater longevity, and enhanced status.1

In relationships, it reports, money can be used to show affection and support, and provide a reason to become or stay married, while a lack of resources can strain a relationship to its breaking point. When money is tight, arguments regarding how much money is earned and how it is spent become hard to avoid.

Some divorce lawyers are predicting an increase in divorce filings once the pandemic crisis eases and the courts reopen. (Learn more: Thinking about a divorce? Take a breath before preparing )

“The global pandemic, which dominated much of the first and second quarters of 2020, has decimated lives and uprooted the financial security which so many had previously felt,” said Drabinski. “Many of us have friends and loved ones fighting the virus from the front line, and for these heroes the emotional toll has been immense. But as our country begins the process of recovery, the financial toll on society has been unprecedented and is only now starting to be understood. “

Tips to manage stress

One of the keys to managing stress — financial or otherwise — is to control what you can.

In the case of the COVID-19 pandemic, the CDC suggests a number of strategies for relieving stress, which include meditating, volunteering within your community, maintaining social connections via phone and teleconferencing technology, taking breaks from reading the news, eating well, exercising, and using counseling or therapy services as needed.

Those experiencing financial stress, however, may be more inclined to suffer in silence. HelpGuide, a nonprofit mental health and wellness group, tells readers on its website: “When you’re facing money problems, there’s often a strong temptation to bottle everything up and try to go it alone. Many of us even consider money a taboo subject, one not to be discussed with others.”

According to HelpGuide, talking face to face with a trusted friend or financial professional not only relieves stress, but can also help put things in perspective. It adds that “keeping money worries to yourself only amplifies them until they seem insurmountable.” (Related: 3 times when you probably need financial guidance)

Because financial problems tend to affect the whole family, HelpGuide also suggests:

  • Inviting your immediate family (children included) to talk openly about their concerns and offer suggestions on how to resolve the financial problems you are facing.
  • Making time for (inexpensive) family fun to enjoy each other’s company, let off steam, and forget about your financial worries. (Think walks in the park, bike rides, or planting a garden).

If you are currently experiencing cash flow challenges and you have not done so already, Chad Tourin, associate managing director with Coastal Wealth in Fort Lauderdale, Florida, also recommends reaching out to your creditors, lenders, and any other financial institution with which you do business to discuss payment leniency.

“Most would be pleasantly surprised to find that relief is being offered across all industries and sectors,” he said. “Mortgages, student loans, auto insurance, and car payments, are just a few of the many I have seen offering relief.”

The financial checkup

Your next move is to review the money that comes in every month and the money that goes out.

“Far too often people avoid going through the process of a financial checkup because of a perceived lack of time, but now is as good a time as any with most people at home,” said Tourin. “The cash flow analysis that occurs during the process is one of the best tools to reduce financial stress because it can quickly identify areas where money is dripping off your balance sheet.”

That may include subscription-based memberships that you pay for but never use and overspending on meal deliveries.

Investors, on the other hand, should ensure that their portfolios (including brokerage and retirement accounts) are well-balanced across all sectors and asset classes — and reflect their financial goals, time horizon, and risk tolerance, said Drabinski. Diversified asset allocation can help ensure that a portion of your portfolio zigs while the other zags, regardless of market conditions. Many investors rely on guidance from a financial professional.

“The experiences of the past few months really drive home the harsh reality that you can never fully prepare for every potential circumstance, but you can strategically position yourself to better absorb unsystematic risk,” said Drabinski. “We like to tell our clients that the term ‘retirement’ is really just an adjective for ‘financially independent’.”

Retirees, he said, can create multiple income streams (including annuities, pensions, Social Security, and brokerage account withdrawals) to help shelter themselves from financial shock, while those in the accumulation phase of their careers can establish an emergency fund of three to six months' worth of living expenses held in cash or liquid securities. Both provide a financial cushion, which ensures that you will not have to liquidate underperforming investments when the market is down. ( Related: How life insurance can help you in retirement)

“We also stress to clients that they should review their financial position in addition to their protection and estate planning needs, and attempt to identify any insufficiency before the problem becomes untenable,” said Drabinski.

That includes disability income insurance to protect a portion of your income in the event that you become too ill or injured to work, and life insurance to protect the ones you love if you should pass away prematurely. It also includes updating the beneficiary designations on your retirement accounts, especially after a major life event like a death, birth, marriage, or divorce. (Learn more: What is estate planning? And why does it matter?)

Being proactive with your finances puts you back in the driver’s seat, which may not solve all your immediate challenges, but can reveal a path forward to restoring financial wellness.

“We certainly cannot control everything within our financial universe, and without question much of the global pandemic has been beyond our collective control,” said Tourin. “But we can control how we prepare, how we approach financial planning, and how we react to changing circumstances.”

Learn more from MassMutual…

7 steps to restoring financial wellness after the COVID-19 crisis

Estate planning: 6 big mistakes you might be making

Need financial advice? Contact us



Psychology Today, “Sometimes Lack of Money Is the Root of Relationship Evil,” May 16, 2018.

The information provided is not written or intended as specific tax or legal advice. MassMutual and its subsidiaries, employees, and representatives are not authorized to give tax or legal advice. You are encouraged to seek advice from your own tax or legal counsel. Opinions expressed by those interviewed are their own and do not necessarily represent the views of MassMutual.