Everyone worries about money from time to time, but financial anxiety is different. Financial anxiety is an obsessive fear of things related to money that can often be debilitating.
Financial anxiety can be triggered by any number of things, not just a lack of money. Those who suffer from financial anxiety are continually worrying about bills and might be afraid to look at their bank account or cope with anything to do with personal finances. And like other forms of anxiety, financial anxiety is unhealthy. It can have an impact on your physical health causing insomnia, loss of appetite, or an inability to focus.
It’s only natural that financial hardship and loss of income will create worry. When that worry escalates to obsession, it can become a true anxiety disorder.
Watch for symptoms of financial anxiety
- Overspending: You would think that money worries would cause you to save your money, but shopping provides temporary relief from money anxieties. It becomes a vicious cycle where you keep spending to get relief, which makes the problem worse.
- Hoarding: Overspending can lead to hoarding; taking comfort in material items to relieve the anxiety from money challenges.
- Fear of spending: 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. People who overwork or work obsessively to earn more may also suffer from this type of anxiety.
- Uncontrollable finances: People with financial anxiety often are uncomfortable accumulating wealth. This can make it difficult to budget or prioritize household spending, and it can have a disastrous impact on retirement planning.
- Depression: Feeling depressed about the world around you can stem from a financial anxiety disorder.
- Obsessive behavior: Money anxiety can cause obsessive behavior as well, such as an inability to sleep or continually checking your online bank account.
These are just some of the symptoms, but there are ways you can tackle financial anxiety head-on.
Dealing with financial anxiety
Rather than remaining frozen in fear, consider ways you can alleviate financial stress and take control of your personal finances. Here are some suggestions to help you cope with financial anxiety:
- Schedule a money check-in: Set a financial goal for yourself to save a set amount by a specific date. Then start putting money aside.
- Create a household budget: Putting your income and expenses on paper will show you exactly where your money is going so you can take control of your spending.
- Manage your debt: Debt is one of the biggest factors that creates financial stress. Having a financial plan can help you avoid debt. If you are carrying debt, developing a strategy to pay it down will help put you in control of your debt.
- Create an emergency fund: Having an emergency fund can give you peace of mind because you know you have enough money set aside to pay your bills if you become sick or lose your job.
- Discard financial shame: Comparing your lifestyle or spending to others, especially on social media, only feeds money anxieties. Spending and accumulating wealth is not a contest.
- 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 cannot control.
Get help
With the help of 1st United Credit Union, you can take control of your finances. We have financial advisors and counselors available to help you. We also offer a wide range of financial tools that will make managing money easier. Here are some ways you can get started:
- Start with a savings account. No matter what your financial situation is, you can always find money to put aside. Saving can help you build your emergency fund as well as prepare you for retirement.
- Use online money management tools. These tools make it easier to set and keep goals, track spending, automate savings, and stick to a household budget.
The more you know about how to manage your money, the more control you will have over your finances. Feeling in control of your money will alleviate stress.
Talk to a 1st United service specialist about opening a checking account and setting up your online money management tools. Members can also get support from a professional financial counselor who can provide you with a personalized financial strategy. With a little help, you can better handle your finances and, hopefully, alleviate financial anxiety before it takes control of you.
FAQs
Anxiety about money frequently stems from the fear of not having enough to provide for these needs, the uncertainty of the future, or past experiences of financial instability, such as debt, job loss, or poverty. This anxiety can also be fueled by societal pressures to achieve a certain standard of living.
How do I stop being struggling financially? ›
How We Make Money
- Prioritize what you can control on discretionary spending.
- Find ways to earn more money.
- Pay essential bills.
- Save money during trying times.
- Track your money-saving progress.
- Talk to your lenders.
- Consult with an expert financial advisor.
How to reduce financial anxiety and money stress
- Develop a spending and saving plan. ...
- Track your money-management progress. ...
- Realize not everything is in your control. ...
- Improve your financial literacy. ...
- Practice self-care.
Automate Your Savings
Don't just save when you think about it. Automate your savings so you don't have to think about it. Set up an automatic savings plan to place the same amount of money into your savings account on a regular basis, whether it's once a week, once every two weeks, once a month, etc.
What is the 50 30 20 rule? ›
The 50-30-20 budget rule states that you should spend up to 50% of your after-tax income on needs and obligations that you must have or must do. The remaining half should dedicate 20% to savings, leaving 30% to be spent on things you want but don't necessarily need.
What is money dysmorphia? ›
Money dysmorphia is a negative but unrealistic assessment of your personal finance position. Symptoms of money dysmorphia include obsessive earning, money hoarding and negative shopping habits. Younger people are most at risk of money dysmorphia, but traumatic events can also trigger it.
Is the average American struggling financially? ›
Key Findings. 48.6% of Americans consider themselves to be “broke,” and 66.2% feel they are “living paycheck to paycheck.” There is a gender gap in the results: Females are more likely to consider themselves “broke” at 55.8%, compared to males at 41.1%.
What is the main cause of financial stress? ›
Financial stress can be defined as difficulty meeting basic financial commitments due to a shortage of money. Financial stress increases the risk of homelessness and can negatively impact an individual's health and psychological well-being. Not surprisingly, low income is a significant cause of financial stress.
Why am I struggling with money so much? ›
It may be that you have too much credit card debt, not enough income, or you overspend on unnecessary purchases when you feel stressed or anxious. Or perhaps, it's a combination of problems. Make a separate plan for each one.
How to retrain your brain to be less anxious about money? ›
Shifting to an “abundant” mindset starts with intentionally changing the thoughts and beliefs that shape your world view. It starts with questioning and unlearning the thoughts of scarcity. As you do this, you'll start to notice subtle changes in your reactions and decisions. Maybe you feel less scared to invest.
Educate yourself on ways you can manage your financial stress through breathing exercises, working out, meditation, drinking lots of water, sleeping more, spending more time doing the things you love, and being with people who make you happy.
How much money to not worry about money? ›
“On average, Americans believe it takes approximately an additional $284,000 above feeling wealthy to really be 'worry-free. ' This 'wealth delta' depends greatly on where you are in life, with the difference being highest for those in their 30s and 40s — peaking at nearly $1 million.
How do you cure fear of money? ›
Having an emergency fund can do wonders to ease your fear of money, but it can take time to build. Rather than pressuring yourself to build your entire emergency fund all at once, set the goal of saving just a small amount per week—even $5 is better than nothing.
How do I fix my money mindset? ›
Six Steps to Creating a Positive Money Mindset
- Forgive Your Past Financial Mistakes. No one is perfect. ...
- Understand Your Thoughts and Emotions Surrounding Money. ...
- Realize That Comparing Yourself to Others is a Losing Game. ...
- Work on Forming Good Habits. ...
- Create a Budget That Brings You Joy. ...
- Remember to be Thankful.
Create a budget or money plan
A budget is a plan for balancing money coming in and going out, which can help us feel more in control and help to ease anxiety or stress over money. Aim to set a regular time to look at your costs, so you can work out what you can spend each week or month.
Is financial stress a mental health issue? ›
Like any source of overwhelming stress, financial problems can take a huge toll on your mental and physical health, your relationships, and your overall quality of life. Feeling beaten down by money worries can adversely impact your sleep, self-esteem, and energy levels.
What is financial trauma? ›
Financial trauma refers to the distress associated with chronic money-related stress, lack of resources, or financial abuse. These difficulties can overwhelm the ability to cope with stress, thus leaving many stuck in a state of heightened anxiety, fear, or anger.
Why am I scared to spend money on myself? ›
People struggle to spend money for many different reasons. They may include financial anxiety or a history of financial trauma, transitioning from accumulation to decumulation into a new phase of life, or through identity and emotional connection to assets.
What is the fear of personal finances? ›
Steps to overcome your fear of money and get ahead with your finances include starting with the basics, educating yourself, and identifying your financial goals. It's important to address your fears to prevent them from hampering your ability to provide for yourself and your future.
