Posted by Carmen Garcia

How Tax Problems Can Cause Stress and Affect One’s Life

How Tax Problems Can Cause Stress and Affect One’s Life

Do you have a hard time sleeping at night thinking of your financial problems? Does your money problems trigger your anxiety? Don't ignore that because financial problems could affect your health badly and possibly cause you psychological problems. Read the steps below that will give you a positive perspective for your future and to minimize your financial stress.

These days everything seems to increase that highly impact how the Americans think. It gives them financial stress. Cost of living, personal debts on an installment basis, inflation rates are all increasing while your salary doesn't, really seem to be a source of burden in all parts of the country.

On a national scale, there is about 73 percent of Americans who will never get out of their debts and nearly one in four Americans don't have an emergency fund and this is an indication of the overall economy of the state. Also, policymakers can use this to direct efforts as needed with regard to corrective measures. 

These issues are disturbing on a personal level. It will bring you financial stress that will affect your everyday life and your long-term decisions. A released report by the American Psychological Association (APA) year 2017 says that 62 percent of Americans are troubled about money whether on how they can have enough money to cover expenses or clear out their debts.

Individuals subsisting paycheck to paycheck are at great risk making on-time payment. The more debts you have, the more difficult it is for you to be granted a mortgage or a loan.

The Impact of Financial Stress on Your Life

Demographics and all ages are affected by financial stress. Baby boomers realized that they do not have enough funds for their retirement while millennial are engaged in excessive student loans.

Inadequate funds and multiple loans will surely affect your long-term decision making to some circumstances like the younger generations will prefer to compromise by postponing their plans to avail their own house or even marriage. Also, older generations tend to delay their retirement.

Furthermore, financial stress can lead you to depression, anxiety or other serious health issues. Anxiety has manifestations where it escalates your feeling of nervousness and a physical symptom such as panic attacks. It is synonymous with depression that will affect your daily routine. You are becoming restless and hopeless, you will experience poor eating habits and sleeping disorder or could be worse than that. 

Financial stress can cause other illnesses apart from mental and emotional disorders because of the constant nature of "flight or fight" mode.

Suffering from heart disease triggered by a long period of increased heart rate and adrenaline rush, insomnia, high blood pressure, and gastrointestinal disorder. Other alarming behaviors you can get from financial stress include eating disorders, gambling addiction, and alcohol or drug abuse.

Why don’t you create a comprehensive plan to get rid of the bad debt, save an emergency fund and establish yourself for a more stable financial future. In this way, you reduce your financial stress and make your life better. There are a few ways stated below in order to do that:

How to Manage Financial Stress


Budgets are not all about cutting down expenses. A budget is an approach where you create a plan to spend your money in line with how much your earnings is to address your expenses.

Your budget can also be adjusted depending on how much you incurred. For instance, in the month of January your utility bill increases but not in the month of July. So in excess of that, you can allocate it to other expenses or pay your debt. 

In order to generate funds, you should learn to recognize your needs and your wants. Impressing others by overspending is definitely not a way to get your financial situation under control.

Evaluate yourself. Identify your basic needs or the things that you cannot live without. Food, shelter, healthcare, and utilities are those that are included in the list. The minimum payment on your debt might be for a credit card or student loans will be considered as needs so anything in excess of that can be spent on your wants or savings.

There are ways to reduce your spending. You can cut down the subscription that you don't use. Instead of paying a membership fee to the gym which you don't go too often, you can do home exercises e as an alternative.

You can also share the expenses with your family or friends for streaming services that cost as much as $40 monthly or look for cheaper options such as Netflix or Hulu. 


The U.S. median household income is $57,617 while the average U.S. household has $137,063 worth of debt on an installment basis. Usually, the sources of debts are credit cards, student loans, mortgages and auto loans. If your debt is too big already then might as well consider steps to eliminate it. 

Not all debts are bad. There is also a good debt generated from an investment such as education or real estate which in the future produces cash flow. 

Bad debts can't generate cash which means you will not get anything in return and for sure will not sustain your life in any way. Other forms of bad debts could be a vacation that is too costly, excessively use of credit card just to pay your designer clothes or riding an Uber wherever you go.

You should learn what is bad debts and good debts and make a wise decision whenever you want to have a loan or borrow money.


There are options for investing you can opt to like the 401k, IRA or Roth IRA but it depends on the money you afford to contribute every month, what retirement programs your employer will offer, or what tax privilege you want to be benefited with. 

If your employer offers 401k matching then take the chance to get the advantage of the "free money" by maxing out your contribution.

If you want to max out your annual contribution then elect Roth IRA's and IRA's (For both types of IRAS is $5,500 while 401k is $18,500.)

There is another advantage you can enjoy for 401k. Here there is no tax reflected in your take-home money as your paycheck is a pre-tax. You might be tempted to spend it though.

Additionally, set an amount you need to contribute to your emergency fund and automate your savings in order for the amount to be immediately transferred from checking account to savings account.


To control your financial stress is to make more money. Instead of spending it why not start a side hustle in your free time. If you have a passion for fitness then you might want to become a part-time fitness instructor or a yoga teacher for extra income.

Work as a Freelancer and use Freelancers and Upwork to associate with clients who are looking for freelance writers, web developers, graphic designers, social media managers, and more.

Side hustles are a good opportunity for your skills to be honed. If you have deep knowledge of entrepreneurship then this is a good start for you to see if you can work your own business full-time.

Whatever is your situation, no matter how young or old you are, don't ever let financial stress destroy you and put negativity on your life. You are capable of taking control of your life, finances and for whatever you want to see in your bank account.

Carmen Garcia
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