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From student loans to Covid layoffs, here’s how to deal with the money stress keeping you up at night

Money and mental health are connected.

Financial problems can make you stressed, anxious or depressed, and those feelings, in turn, can have a big impact on your finances.

In fact, anxious or stressed adults are more likely to engage in costly financial behaviors, including withdrawing cash from retirement accounts and borrowing from high-cost financial services firms, according to a report from the Financial Industry Regulatory Authority Investor Education Foundation and the Global Financial Literacy Excellence Center.

To help combat these emotions, start talking to yourself, your partner and your family members, suggests licensed marriage and family therapist Dr. George James, chief innovation officer and senior staff therapist at the non-profit Council for Relationships.

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Otherwise, you might wind up emotionally blocked and end up doing something you might not really want to do.

"Don't try to take your emotions out of it but just be aware of how your emotions might influence it and you can actually be able to make the decision that you need to for you and those you love," said James, who participated in CNBC's Invest in You: Mind Over Money Facebook Live on Thursday, hosted by CNBC Senior Personal Finance Correspondent Sharon Epperson.

It's also important to know you aren't alone.

"If you are financially stressed, if you are not sure what you are doing, if you made financial mistakes, welcome to the club," said certified financial planner and financial psychologist Dr. Brad Klontz, who also took part in the Facebook Live.

"It is a learning process," he said. "Many of us weren't taught what we need to know.

"Just be gentle with yourself."

Here are some strategies to help ease your financial anxiety, depending on your situation.

Overwhelmed by student loans

Makayla Campbell, 21, has anxiety over how to pay her student loans in addition to her living expenses.Courtesy: Makayla Campbell

Makayla Campbell, 21, owes more than $63,000 in student debt for the three semesters she went to a performance art college in Los Angeles. After deciding it wasn't for her, Campbell moved to Phoenix and began working.

"I want to know the best way to manage my living expenses on top of my student loans kicking in at the same time, without feeling so overwhelmed each night," she said.

To deal with those feelings, try to look at it at one step at a time, said Klontz, who had $100,000 in student loans when his education was completed.

"When you see that big number, it makes you sweat," he said.

Also, remember you'll be able to pay off more as your career and income grows. To help ensure you pay your bills regularly, set aside a certain percentage of your income and automate the payments.

"What we tend to do is inflate our lifestyle as we start to make more money, and that's where that automatic payment toward that obligation can really help you," said Klontz, a member of the CNBC Invest in You Financial Wellness Council.

Getting through a layoff

Brett Dobin's wife was among the 114 million people laid off during the Covid pandemic in 2020.

The 44-year-old guidance counselor from New York is concerned about getting by with one income and a 21-month-old baby, while emotionally supporting his wife.

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