What Are the Keys to Lowering Financial Stress?

MARK RIEPE: I'm Mark Riepe. I head up the Schwab Center for Financial Research, and this is Financial Decoder, an original podcast from Charles Schwab. It's a show about financial decision-making and the cognitive and emotional biases that can cloud our judgment.

In today's episode, we're going to talk about how to lower your stress level when it comes to your finances. In a recent episode, we talked about portfolios, and if you've listened, you might remember that one reason we're not good at evaluating our portfolios is because money is so emotional, and for that reason, it can cause a lot of stress. Stress can be all consuming. It can have negative effects on our physical health as well as our mental health.

In our episode at the beginning of July, I quoted several of Ben Franklin's sage advice about financial matters. One that I didn't use in the show though was about money: "The more of it one has, the more one wants." So if you feel like you don't have enough money, that sure can cause stress. And we see this in the data. For example, a 2018 study showed how happiness and life satisfaction tend to increase as annual income rises, using data across one 164 countries. But it isn't a cure all.

Some make the point that as income goes up and we spend more, we get used to that spending, and it doesn't provide as much emotional lift as it used to. And that's why that study found that happiness and income levels were less correlated as income rose. Now that study was from 2018, and this issue has been studied to death since then in all sorts of different ways. One study I like is from the Federal Reserve. It looked at this issue in 2025 and, not surprisingly, focused on the United States.

They asked a cross section of Americans a series of questions that were all related to financial stress in some way. They then broke down the results by all kinds of different variables, including income level. Not surprisingly, as income rose, the financial stress indicators dropped, but they didn't drop as far as you might think. For example, one of the questions was, "Are you doing OK financially?" For those earning over $100,000 per year, 9% said no.

Another question was, "How often do you have money left over at the end of the month?" Again, for those earning over $100,000 per year, 15% said rarely or never. Another question was, "Did you pay all your bills in full in the prior month?" For those earning over $100,000 a year, 7% said no. The bottom line is that just because your income is well above average, that doesn't guarantee that financial stress is a thing of the past.

Not surprisingly, money stress can play a huge part in divorce. In 2026, two studies were published looking at the impact of money on marital stability. In one study, 41% of divorcing couples cited financial issues as the primary cause of the divorce.  The other study got similar results, reporting that about 20 to 40% of divorces involve significant conflicts over money.

Those statistics are a little depressing, but all is not lost. My guest today is Cindy Scott, and she has some ideas about how we can alleviate our stress about money. Cindy has been helping Schwab clients build personalized wealth management strategies that address topics including retirement planning, distribution and income strategies, education planning, risk management, and estate planning. She has 25 years of experience and is a CERTIFIED FINANCIAL PLANNER® certificant, a Chartered Financial Consultant®, and a Chartered Retirement Planning Counselor^SM. She's also one of our featured columnists on our Schwab Money Talk series. You can see her work at schwab.com/MoneyTalk, and again you can see some of her great work there.

Cindy, welcome back to the show.

CINDY SCOTT: Thanks, Mark. Thanks for having me here. I'm excited about this conversation today.

MARK: It's pretty consistent that financial stress, money stress, that's a consistent source of angst in people's lives. And that sort of pops up irrespective of income level. So why does money have this kind of powerful effect on our overall sense of well-being?

CINDY: Yeah. Wow, that's a great question. I think one of the reasons is because money touches almost every aspect of our lives, our health, relationships, our careers, our dreams, and even our identity. So it permeates multiple areas of life simultaneously. So when people worry about money, they're rarely worried, I found, about the money itself. They're worried about what the money represents.

Things like, this is what I've heard from clients, "Will my family be OK if something happens to me? Or will I ever be able to retire? Or what happens if the next emergency comes before I've recovered from the last emergency?" And sometimes, whether we realize it or not, we wonder, "Am I falling behind everyone else?" Money becomes a measure of how we're doing in our lives. So it has a deep impact on our identity and sense of success and achievement in life. 

These are some of the reasons money has such a powerful effect on our well-being. It's also why stress shows up at every income level, Mark. One person over here may be worried about making rent or worried about the rising cost of gas and groceries, where another client may be worried about the impact that a sizable inheritance will have on their kids and grandkids. They're worried if it'll help them, or will it harm them? So the amount of money in each of these situations may be different, but the emotions are the same. Both of these people are experiencing the same underlying fear about the future. The big question is always, "Will I be OK? Will my family be OK tomorrow?" 

And what I've learned is that financial peace rarely comes from reaching a particular dollar amount. There's always another number, always another goal or another comparison. Financial well-being in my mind is about reducing the gap between uncertainty and confidence about the future. And I'll make this plug, Mark. When we have a financial plan, it gives us the clarity about where we're going, how we're going to get there, and a plan for contingencies for when things don't go according to plan.

That's when the gap begins to close, and you replace anxiety with confidence, and people can start to experience true financial peace.

MARK: So that makes a lot of sense. I think one of the things, one of the difficulties that people have is that when they're under financial pressure, they're trying to diagnose what's that one thing that's at the root cause of the problem. But as you pointed out, money's kind of interconnected to so many different aspects of our financial life. So how do you get the conversation going? How do you get people to get started to make sense of what they're experiencing? 

CINDY: I think we just … in the past we've already started with being curious and asking questions because I always tell clients that financial pressure is often a symptom; it's not the problem itself. Think about financial pressure like being a messenger, not the disease. So we need to ask the question "What is the pressure trying to tell me? What financial decisions might I be avoiding? When do I most feel anxious about money?"

I've worked with clients throughout the years who experience pressure from a variety of sources. For some, it comes from a lack of control. They just don't know where their money's going. For others, it may be a lack of confidence. They're constantly asking, "Am I doing the right things? Am I making the right decisions?" And then I've encountered clients who experience pressure due to lack of planning and preparation. Some people know that an emergency would throw everything off track, and yet they're not doing anything to be prepared for that unexpected event. Or sometimes it's a conflict between what they spend money on and what they say matters most in life. Right? This is the future they want for their family, but they're spending on things that's not moving them closer to the future they're trying to build. 

But here's the encouraging part. Once they identify the real source of stress, they often realize that it's much more manageable than they imagine. I've seen clients spend years believing they had a money problem when in reality they had a planning problem or a communication problem with their spouse or an expectations problem because they're comparing themselves to everyone else. So we have to ask questions to understand what the pressure as a messenger is trying to tell us. And one of my favorite questions that I've been asking clients for years is this: If we were sitting here a year from today and you said, "I finally feel at peace about my finances," what would have changed? This question starts to shift the conversation away from dollars and cents and towards what they're really trying to accomplish.

And as I said a moment ago, financial planning, it's not just about building wealth, it's about creating clarity. And clarity about what's really causing the pressure allows you to make decisions and take actions that move you closer toward what you really want in life. And guess what happens then? Well, the pressure starts to diminish.

MARK: So Cindy, a couple of times you mentioned sort of the future and getting people focused on the future. I want to turn that around a little bit and talk about the past of people. To a certain extent, we all have financial habits, and we weren't born with those habits. They kind of developed over time. Could you talk a little bit about the importance of examining those and how that helps get people to a point of clarity going forward?

CINDY: The interesting thing, Mark, is every one of us has a money story. And the interesting part is, most of us, we're living out a money story that we didn't even write. Somebody else wrote it. Think about it like this. Long before we earned our first paycheck, we were learning about money. We watched how our parents handled it. We may have heard comments like, "Money doesn't grow on trees" or "We can't afford it." Or maybe money was a source of arguments in our household. Maybe it was never discussed at all. Those experiences in our formative years become beliefs. And over time, those beliefs become behaviors. 

I've worked with incredibly successful people who were still making decisions out of fear that they experienced as children. On the one hand, they would save every penny because they were worried about being poor. Others would spend every penny freely because they never had much growing up, and they wanted to enjoy what they've earned. Neither behavior is inherently right or wrong, but both deserve to be examined. Because if we don't understand the beliefs that drive our financial decisions, we'll keep repeating the same patterns, even if our income doubles. 

So the goal isn't to blame the past; it's to understand it. Awareness gives us the power to decide which money habits we want to keep, which ones we want to let go of, and which new ones will better serve the life we're trying to build for ourselves and our families.

MARK: One of the interesting things about financial matters is, at the end of the day, a lot of it can be quantified. I mean, we're balancing our checkbook and we see more money going out than coming in. We see the value of our portfolio. Maybe it takes a big dip, or we see that it's uncomfortably away from our goal that we were trying to achieve for retirement. So quantifying things like that, I think that creates a sense of urgency in a lot of people, and that urgency can lead to stress. And we know that making decisions in a stressful environment is not always the best thing to do. So how do you get people to slow down a little bit to think through the problem and not try to just jump in and try to solve it instantaneously?

CINDY: Yeah, that's good. Let let's talk a little bit about the ideal environment for making sound decisions. When people are under financial stress or really any stress, the brain shifts into survival mode. And the part of our brain that's responsible for thoughtful planning and good judgment has, as one of my colleagues likes to describe it, gone offline. It's been hijacked, and our survival instincts take over.

But the survival brain is not asking what the best long-term decision is. It's wired to ask one question: How do I make this uncomfortable feeling stop? When this brain is in control, that's when we see people cash out of their investments, raid their retirement accounts, or make purchases they can't afford, all because they're looking for a moment of relief.

So when we encounter clients who are in this place of heightened emotion, we try to create a pause between the action and the emotion. As I said earlier, our goal here is to try to identify the cause of the stress so that we know how best to proceed. And once the thinking brain re-engages, that's when people can respond thoughtfully instead of reacting impulsively.

And creating that moment of pause, I've seen it save people from countless financial regrets.

MARK: Yep. Yeah. Makes all the sense in the world. I want to turn the conversation a little bit towards something that I think is creating a lot of stress and is on people's minds right now, which is inflation. And people are experiencing higher rates of inflation. Even people who are well off are seeing the prices of kind of everyday items going up to levels that they haven't experienced in the past. So how does that influence how people are thinking about how they're feeling about their finances?

CINDY: Yeah, I think it creates a sense of uncertainty in people. People who have always felt in control of their money may suddenly feel like they're falling behind, even though they're making many of the same responsible decisions they've always made. The money just isn't going as far because more of it is required on things like necessities. The important thing to remember is that financial planning isn't about setting a budget once and never changing it. Life changes, the economy changes, our spending needs change also. And so we should think about our spending plan, think about our budgets, as a GPS system. When conditions change, you adjust your route without losing sight of your final destination. Adjustments should be expected in our lives because it's simply a part of life. There will be seasons when it will make sense to reduce spending on our wants and wishes because more money is required for our necessities. There'll also be seasons when we'll have flexibility to spend more on the wants and wishes, the things we enjoy. But the key is to expect those adjustments along the way because they will happen.

MARK: Cindy has, as always, some great advice, and we'll get back to her in a moment. But I want to talk about another psychological challenge when it comes to financial stress, and that is the hedonic treadmill, also known as hedonic adaptation. It's the idea that we adjust our level of happiness based on a recent experience that makes us happier. But we get used to that initial burst of joy, and our happiness drifts back down to where it was before. 

For example, let's say you got a great new job, you're super happy—for a while, but then you get used to it. The newness fades, you adjust your level of expectation to the new status quo, and then you desire even more to maintain the same level of happiness. You stop appreciating the positive aspects of the new job, and maybe over more time you find yourself looking for another job to make yourself happy again. But it's not all bad news. Luckily, the same thing happens with negative emotions. After a negative experience, you might feel down for a while.

But the good news is you'll bounce back. It's a double-edged sword, and it can help to explain why having more money won't necessarily reduce your stress level in the long run. Researchers have found that there are ways to reduce hedonic adaptation. One is to avoid repeating the same experiences. Mix it up. Looking at the same vista every day can get old. Try a different hiking trail. Try a new restaurant. You can also try to appreciate experiences more by paying attention and savoring what's good about them while they're happening.

In addition, try to get others involved in your new experiences. Spending on experiences increases happiness on average, but the effect weakens if the experience is done alone. In a financial context, if you get a raise or come into some money from, say, an inheritance, think hard about what you'll do with that extra income. Don't just get used to it. Also, remember that consumption isn't everything. It seems that more money is most likely to produce lasting gains in our psychological health when we use it to reduce our financial vulnerability. In other words, don't forget about putting some of the money in savings and investing the rest to increase the stability of your financial situation. And of course, listen to the rest of the show and let Cindy Scott help you because the solution to money stress isn't as simple as just having more money.

It's summer while we're recording this, and I don't know about you, but it seems as if summer is a perfect environment for some big one-time expenses, whether it's vacations or events for kids because they're home and they need something to do. How do you go about planning for these kind of shorter-term, one-off things versus your longer-term financial goals?

CINDY: I have two words for you, Mark. Prior planning. Because we can't plan for both. Think about this. Summer isn't a surprise. It comes every year. Vacations, camps, family activities, back-to-school expenses, these are all things we can anticipate and plan for while continuing to make progress towards longer-term goals like building an emergency fund or investing for retirement.

And as we're putting those plans together, I just want to make sure people understand that they need to be ready to make some trade-offs. Most families we work with have more goals than they have money. So we make some trade-offs. That's required. Perhaps it's planning for a staycation one summer instead of a more expensive vacation out of state or having the kids play on local community sporting teams versus paying for a select team. So the goal here is you plan for the summer fun activities ahead of time without sacrificing the long-term goals that are also important. It's all about prior planning.

MARK: You're exactly right about trade-offs being an inevitability, right? You're exactly right about that. And I think most people get that at some, you know, once you remind them of it, I think they're going to come around to that. But how do you get people to then make smart trade-offs or have a good process for evaluating the trade-offs and deciding what path to go down?

CINDY: The first thing is I think it helps to remember that every financial decision involves a trade-off. When we have more goals than money, we simply can't do everything all at once. And that's OK. That doesn't mean we're giving something up forever. Trade-offs aren't about choosing between good and bad. It's about choosing between two good things when you can't do both of them at the same time. Maybe you choose a less expensive vacation this year so you can continue saving for retirement. Or maybe you scale back other expenses because spending time with your family is a priority. Neither of those choices are good or bad. So the goal is to make decisions that reflect your values. And when your spending aligns with what's most important to you, trade-offs feel less like sacrifices and more like a choice you've been empowered to make. 

Think about it like this: Trade-offs are less about math and more about mindset. When people hear the word "sacrifice," they tend to think about loss. I want them to switch the mindset and think about trade-offs as alignment. They're not sacrifices; they're choices in service to something you value even more. You're making decisions that are best aligned with the goals you're trying to accomplish, and the trade-off is simply you saying yes to that goal.

MARK: Earlier you said something that I wrote down was kind of a knee-jerk reaction that some people might have is to raid the retirement accounts, you know, for some short-term need. So I wanted to talk a little bit about how do you make sure those longer-term goals don't fall by the wayside, don't get forgotten when they're going through that trade-off discussion you were just describing.

CINDY: I mentioned this a little bit earlier. I'd encourage listeners to pause before making a major change. Ask yourself, "Has my situation changed, or has my stress level changed?" When things like market volatility or financial stress hits us, the urge to do something is incredibly powerful. Human nature tells us that action equals safety. But when it comes to financial planning, reacting to stress by disrupting a long-term strategy is often the most expensive mistake a person can make. 

If you've lost a job, you experienced a health issue, or had another significant life event, it may absolutely make sense to revisit your plan. But if the primary reason for wanting to take action or make a change is fear or anxiety, unsettling headlines, or the need to just go and purchase something, it's worth taking a step back before making that decision. As I mentioned a moment ago, some of the most expensive financial mistakes happen when people make permanent decisions based on temporary feelings and emotions. Adjusting our strategy thoughtfully can be wise. I want to make that clear.

But walking away from a long-term strategy because the present moment feels uncomfortable can have consequences that last for years. We've seen it. So before making a major change, I would encourage listeners to give yourself a chance to think beyond today's stress and reconnect with the reason you made some of those decisions in the first place.

MARK: Yeah, I think decisions plural is really important because I suspect when you're working with clients, and you start to kind of analyze their situation, that financial health to-do list is probably several different items on that list and several different decisions that need to be made. And the more those decisions pack up or line up, I can see people getting into … I can imagine people getting frozen, right? And they just get a little bit paralyzed. So how do you move from that analytical situation to getting people to have the confidence to kind of get going and generate some momentum to fix the problem that's causing the stress in the first place?

CINDY: Yeah, that's good. You hit the nail on the head here. I encourage people when they're feeling a sense of overwhelm financially to focus on one small step at a time. When they feel overwhelmed, Mark, they get stuck, right? They might believe that they need to solve their entire financial life in one weekend or something big like that. But confidence rarely shows up all at once. It grows from small wins. Every small action builds confidence for the next one. And over time, those small steps create momentum that helps people move from feeling overwhelmed to feeling in control financially. And I've seen people over the years make tremendous progress toward their goals by focusing on one small step. You don't have to figure it all out today. You just have to take the next right step. So break it down and attack it incrementally.

MARK: So I love that. Getting going one small step, but that one small step needs to have a direction, right? It needs to have a goal in mind. And I wish I had thought of this, but somebody pointed out that, hey, the perfect financial life doesn't really exist. And what we should be all trying to achieve is a life of financial resiliency. And that's a much more realistic goal to aim for. So number one, do you do you agree with that? Does that make sense to you? And then secondly, what does that even look like? That sounds like a buzzword. But what does it mean under real-world conditions?

CINDY: Yeah, great, great question. First, yes, I absolutely agree. To me, financial resilience is having the confidence that you'll be OK even when life doesn't go according to plan. Markets will decline, jobs will change, unexpected expenses will show up. Our plans will be disrupted. Life just doesn't unfold perfectly. It doesn't work that way.

To me, resilience is about having the ability to adapt when we're faced with life's inevitable challenges. I've noticed that the most financially resilient people I've worked with are people who understand their priorities, they have flexibility in their plans, and they trust their own ability to make thoughtful decisions when circumstances change. 

For a lot of those people, they seek out the guidance of an advisor to help with those decisions, but they don't panic every time something goes wrong. They recognize that setbacks are just part of the journey. In many ways, we could think about financial resilience like we think about emotional resilience. It's the ability to believe and say, "This isn't what I expected. So I'll adjust. I'll make a new plan. I'll take the next step. I'll continue making progress." It's knowing that when life changes, you can change with it.

MARK: Last question for you, Cindy, then I'll let you go. I'm sure some fraction of the listeners to this, actually they're in a good spot. They actually aren't experiencing financial stress at the moment, but I suspect they will at some point. And so what is the one key message for them that you want them to kind of keep in mind when they encounter that situation?

CINDY: I'll sum it up like this: Don't let today's emotions make tomorrow's decisions. Give yourself a moment to pause, let your rational brain re-engage, and then determine if the action you want to take moves you closer towards your goals, or does the action put your goals in jeopardy? And if you need perspective from a third party, I suggest talking to a trusted friend or a financial advisor that can help you stay focused on the most important long-term goals as you adjust to the current situation.

MARK: Cindy Scott is a CERTIFIED FINANCIAL PLANNER®. She's a senior regional manager here at Schwab with Schwab Wealth Advisory. She and her team help thousands of people all the time. Cindy, it's great to talk to you today.

CINDY: Yeah, it was great to be here, Mark. Thank you for the invitation.

MARK: That's it for this episode. If you want to read Cindy's article "5 Steps to Help Lower Your Financial Stress," we'll link to it in the show notes. We'll also link to her bio on Schwab.com, and from there you can find all her articles, most of which are about everyday financial questions and topics. That's it for this season of Financial Decoder. We'll be back in the fall with more episodes. While you're waiting for new episodes, feel free to explore our back catalog of episodes. We try to make each episode as evergreen as possible. So take a look at old episodes, and I'm sure you'll find something useful. 

If you'd like to hear more from me, you can follow me on my LinkedIn page at X @MarkRiepe. That's M-A-R-K-R-I-E-P-E. As always, we'd appreciate it if you give us a rating or review on Apple Podcasts or comment on the show if you listen to it on Spotify. We always like new listeners, so if you have a friend or two who might like the show, please tell them about us and how they can follow us for free in their favorite podcasting app. For important disclosures, see the show notes and schwab.com/FinancialDecoder.

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5. ^"Hedonic Treadmill," reviewed by Abigail Fagan on November 12, 2025, Psychology Today, accessed July 17, 2026, https://www.psychologytoday.com/us/basics/hedonic-treadmill