How to Cope with Financial Anxiety

You need to learn to read your body's responses to conversations about money. Most importantly, you need to learn how to set regular money check-ins to keep financial anxiety under control.
How to Cope with Financial Anxiety

Last update: 19 July, 2021

Financial anxiety is also known as financial stress and money anxiety. Unfortunately, this monetary monster haunts many Americans, worrying people of all income levels, races, and genders. “Financial anxiety can be debilitating, and it can cause significant distress in one’s daily life,” says Kristy Archuleta. Kristy is an associate professor of personal finance planning at Kansas State University, and an editor of the famous Journal of Financial Therapy.

Financial services company Northwestern Mutual conducted an eye-opening study in 2016. According to this study, 85 percent of Americans reported feeling some level of anxiety around money. Most said that there were negative impacts on many aspects of their lives, such as health, social lives, and careers. Although everyone worries about money from time to time, financial anxiety is different. It’s an obsessive fear of things related to money that can often debilitate you. Furthermore, financial stress can be triggered by many things, not just a lack of money. Those who suffer from financial anxiety are continuously worrying about bills.

They might be afraid to look at their bank account, and they may also be afraid to cope with anything to do with personal finances. Like other forms of anxiety, financial stress is unhealthy. It can have an impact on your physical health and cause insomnia, loss of appetite, or an inability to focus. Although financial anxiety is common, it isn’t insurmountable. Therefore, recognizing what triggers your anxiety can truly help you cope with it. Are you ready to keep financial stress under control?

Money is like love; it kills slowly and painfully the one who withholds it, and it enlivens the other who turns it upon his fellow man.”

-Kahlil Gibran-

An image of an anxious man.

Financial anxiety is another side effect of COVID-19

Do you suffer from financial anxiety? You’re certainly not alone. Believe it or not, many people out there now suffer from financial stress. With the economic environment that accompanied the coronavirus outbreak, more Americans are having to learn to cope with financial anxiety.

According to a survey, nine out of ten Americans are experiencing financial stress due to the pandemic. This interesting survey was conducted by the National Endowment for Financial Education. Additionally, a Pew Research study shows that one in five Americans are having a physical reaction to stress brought on by the COVID-19 crisis.

According to the same research, 30 percent of Americans indicate they’re experiencing a high degree of financial stress. It’s only natural that financial hardship and loss of income will create worry. However, when that worry escalates to obsession, it can become an anxiety disorder. Financial anxiety shares many of the diagnostic criteria of generalized anxiety disorder, such as excessive worry, irritability, and difficulty concentrating. Nevertheless, the American Psychiatric Association doesn’t recognize it as an official disorder.

What causes money anxiety?

A childhood spent seeing your parents overspend or worrying about bills plays a role, as could your own experiences. Thus, think about seeing your retirement savings plunge or having to shut down a business. Life’s traumas, such as losing your job or going through a foreclosure, can lead to financial anxiety. Trauma doesn’t have to be something so major that it causes post-traumatic stress disorder.

Watch for symptoms of this type of anxiety

Many symptoms are related to financial anxiety disorder. Some of them seem obvious, while others may be surprising. Here are just a few:

  • Overspending. Surely, you’d think that money worries would cause you to save money. However, shopping provides temporary relief from money anxiety. It becomes a vicious cycle where you keep spending to get relief, which worsens the problem.
  • Hoarding and an inability to change financial behaviors. Overspending can lead to hoarding. In other words, taking comfort in material items relieves the anxiety from money challenges.
  • Fear of spending. Are you obsessed with being frugal? The other side of hoarding is being frugal beyond reason. Obsessive saving could prevent you from enjoying vacations or living in a comfortable home. It can also lead to avoiding home repairs and healthcare. Similarly, people who overwork or work obsessively to earn more may also suffer from this type of anxiety.

More symptoms

  • Uncontrollable finances. Does accumulating wealth discomfort you? Sadly, people with financial anxiety are often uncomfortable with accumulating wealth. This can make it difficult to budget or prioritize household spending, as it can have a disastrous impact on retirement planning.
  • Depression and anxiety. Are you feeling depressed or anxious about finances? In fact, feeling depressed about the world around you can stem from a financial anxiety disorder.
  • Obsessive behavior. Money anxiety can cause obsessive behaviors as well, such as an inability to sleep or continuously checking your online bank account. Likewise, relying entirely on others to handle finances is another obsessive behavior.
  • Repeatedly giving money to adult children or other relatives. According to Jeff Shinal, this is the most common reason financial advisors contact him for help with clients. Jeff is a renowned expert financial therapist and coach.

There are ways to tackle financial stress head-on.

Clever ways to cope with it

Chances are your financial situation won’t kill you. However, your financial stress can. As such, it’s important to manage it effectively. There are many ways to help you cope with financial anxiety. Check out these two clever tips:

Schedule regular money check-ins

“A lot of people practice self-care,” says Bari Tessler. Bari is a financial therapist and author of the book The Art of Money: A Life-Changing Guide to Financial Happiness. “Hence, we need to relate to money the same way,” she adds. Set a money date with yourself or with your partner to address your finances. She also recommends scheduling time to address finances.

The idea is to set a “money date” with yourself or with your partner. Money dates with yourself can focus on immediate actions, such as contacting an accountant or learning about a new bookkeeping system. Money dates with your partner can be more personal. It involves sharing money stories while discussing how you can save or invest.

Explore how your mind and body react

Start paying attention to your emotions. Similarly, how your body reacts when you discuss money or make financial decisions. How do you feel when you check account balances online? What about when you share your fee structure with a new client? “Try to bring more awareness to what the emotions and patterns are in your body and mind,” Bari says. 

However, if you have a physical reaction to money conversations, including sweaty palms or racing heartbeat, acknowledge it. Consider what’s triggering these feelings. Is it how you communicate with your partner or do you feel guilty or ashamed? A body check-in teaches people how to step to the side, while observing and witnessing what’s going on. It teaches you to work with your emotions instead of being your emotions.

More tips to help cope with it

Rather than remaining frozen in fear, consider ways to relieve financial stress to take control of your personal finances. Here are some more suggestions to help you cope with it:

  • Consider creating a household budget. Putting your income and expenses on paper will show you exactly where your money is going. This way, you can take control of your spending.
  • Try to manage your debt. Debt is one of the biggest factors that create financial stress. 
  • Have a smart financial plan. This can truly help you avoid debt. If you carry debt, develop a strategy. This will help put you in control of your debt.
  • Create an emergency fund. Having an emergency fund can give you peace of mind. This strategy lets you know that you have enough money set aside to pay your bills for emergencies.

Dealing with anxiety

  • Discard financial shame. Don’t compare your lifestyle or spending with other people, especially on social media. This only feeds money anxiety. Spending and accumulating wealth isn’t a contest.
  • Take a hard look at the worst-case scenario. This tip has the paradoxical impact of lowering your anxiety. It’s a form of exposure therapy that can help you keep things in perspective. Most importantly, this exercise helps you face your fears straight on. While your financial situation isn’t life-threatening, your financial stress can be.
  • Take a time out. When you’re anxious, your mind can spin out of control, and it’s vital to take a break or clear your mind. Doing some activities to initiate a relaxation response is important for your mental health. For instance, taking a walk, listening to music, or reading a book.
  • Practice mindfulness. How do you physically react to things associated with money? If your heart rate spikes, you begin perspiring or your mind starts racing. Try to relax with deep breathing exercises. You also can try to restructure your thinking by reminding yourself that there are things you can’t control.

An image of woman with neck pain.

Seek help

As you can see, addressing financial anxiety includes both exterior and interior actions. Exterior actions involve taking the necessary steps in order to create a budget or decrease debt. Another important action could be hiring financial professionals. Interior factors can be more elusive. You should benefit from visiting a financial therapist or to help you find the root of your financial issues. You can also dedicate a money date to examining your relationship with money.

Achieving financial goals isn’t just about the numbers on a spreadsheet. The numbers on the spreadsheet are clients’ behaviors and the emotions, attitudes, and thoughts that drive those behaviors.

Are you still feeling worried about money? Consider calling your bank. Many banks offer financial advisors and counselors to help you take control of your finances. They also offer a wide range of financial tools that’ll make managing money easier. The more you know about how to manage your money, the more control you’ll have over your finances. Feeling in control of your money will help relieve your stress.

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  • Tomasina, F. (2012). Los problemas en el mundo del trabajo y su impacto en salud. Crisis financiera actual. Revista de Salud Pública, 14, 56-67.