What Are the Keys to Lowering Financial Stress?

**Mark Riepe** (0:10)
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. Quote, 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 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 okay 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 20-40% of divorces involved 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 certificate, a chartered financial consultant, and a chartered retirement planning counselor. She's also one of our featured columnists on our Schwab Money Talk series. You can see her work at schwab.com/moneytalk.
Again, you can see some of her great work there.
Cindy, welcome back to the show.

**Cindy Scott** (4:05)
Thanks Mark. Thanks for having me here. I'm excited about this conversation today.

**Mark Riepe** (4:09)
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 Scott** (4:27)
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 okay 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?