BY THE OPTIMIST DAILY EDITORIAL TEAM

Losing a job can shake more than just your budget. It can rattle your health—mentally, physically, emotionally, and socially. While the economic impact of unemployment is widely understood, what often goes overlooked is how deeply financial stress can influence well-being. As Assistant Professor Jeffrey Anvari-Clark, an expert in financial social work at the University of North Dakota, emphasizes, “Losing your job can seriously harm your physical and mental health, especially when you see the situation as a catastrophe rather than a temporary setback.”

Why your financial perspective matters

Of course, losing a source of income brings real challenges. Rent, mortgage payments, groceries, and everyday living costs do not pause for unemployment. But research shows that how a person perceives a financial setback can often have a greater impact on their health than the loss itself.

In a 2023 study co-authored with social work scholar Theda Rose, Anvari-Clark found that the emotional impact of a drop in income matters significantly more than the actual amount lost. In fact, “how a person felt about a decline in income mattered 20 times more than the actual financial change itself,” he explains. Their analysis of over 27,000 American adults, drawn from the 2018 National Financial Capability Study, explored factors like financial confidence, strain, and satisfaction.

In short, someone who sees a job loss as temporary may bounce back emotionally, while another person with the same financial loss may spiral into stress, anxiety, or depression. That perception—whether grounded or catastrophic—can shape outcomes in very different ways.

The physical effects of financial stress

Financial precarity, or the sense of not having enough money to get by, can affect the body as well as the mind. Chronic stress caused by money worries can lead to elevated blood pressure, weakened immune response, and sleep disturbances. Debt, in particular, has been associated with back pain, obesity, and even headaches.

One reason is that the body’s stress response kicks in when financial strain feels overwhelming. Over time, these stress hormones take a toll. Additionally, health care becomes harder to access. People may delay or skip doctor visits and prescriptions, especially when high deductibles or copays make medical care feel out of reach.

“When choosing between paying for rent, food, and health care, people often put their medical needs last,” says Anvari-Clark. This can lead to worsening conditions, preventable complications, or chronic illness.

Mental health and emotional resilience

The emotional toll of financial hardship is substantial. Job loss is frequently linked to depression, anxiety, and reduced self-esteem. And, according to a systematic review of 65 studies, there are clear connections between debt and mental health issues, including suicidal ideation.

Yet, the nuance lies in how individuals interpret their circumstances. People who maintain a sense of calm or focus despite financial strain often fare better mentally than those who internalize stress. Resilience plays a powerful role.

Unfortunately, not everyone turns to positive coping strategies. Some may resort to substance use, excessive shopping, or gambling to dull the discomfort of uncertainty. These behaviors can worsen financial instability and further impact emotional health.

Relationships under pressure

Money stress doesn’t only affect the individual. It can ripple into relationships with partners, family, and friends. Snapping at loved ones, withdrawing emotionally, or borrowing money repeatedly can weaken bonds. Financial strain can also complicate shared decision-making, fueling tension in households and among support networks.

Understanding financial interdependence—the way people make money decisions while considering their relationships—is key to avoiding these pitfalls. As Anvari-Clark notes, people often engage with money as an expression of mutuality, and managing this dynamic with care can protect personal connections during tough times.

Healthy ways to cope and rebuild

While financial distress is difficult, it doesn’t have to define the future. There are constructive, empowering steps that can support recovery:

• Reach out for support. Talk to friends and family. Emotional support is a powerful buffer against stress.
• Keep applying and networking. Maintain momentum in job searching and connect with professional networks or former colleagues.
• Volunteer. Giving time to others can enhance purpose, build skills, and expand job opportunities.
• Start or grow a side hustle. Freelancing, selling handmade goods, tutoring, or driving for a delivery service can help generate income and provide a sense of control.
• Stick to wellness routines. Regular movement, quality sleep, and social engagement all help reduce stress hormones and promote resilience.

Anvari-Clark encourages a balanced, hopeful approach: “Keeping healthy habits is always important. But they could protect your mental and physical health during challenging times. Losing a paycheck is hard enough. Losing your health over it is even worse.”

By shifting perspective, nurturing relationships, and focusing on proactive coping strategies, it is possible to weather financial storms with greater strength—and health—intact.