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5 Steps to Deal with Financial Anxiety

5 Steps to Deal with Financial Anxiety

Financial anxiety is, unfortunately, a very common experience.

If worrying about your finances keeps you up at night, you're not alone. According to a recent survey, a whopping 73% of the U.S. population rank finances as the number one source of stress in their lives.

Financial anxiety is common for a good reason. It can be incredibly challenging to save up for financial milestones like buying a home, sending kids to college and retirement while paying bills and managing current expenses. 

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As the old saying goes, worry is like a rocking chair – it gives you something to do, but it doesn't get you anywhere. This article will explore financial anxiety – what it is, why it happens and actionable steps to take control of your finances and improve your financial future. 

What is financial anxiety?

Worrying about money every now and then is common. But for those who suffer from financial anxiety, the fear can be obsessive and debilitating. People with financial anxiety are constantly stressed about paying bills. They feel fear when logging on to their bank account – even when there's nothing that should be upsetting about the recent transactions made. Those with financial anxiety may be so upset about finances that taking actionable steps toward financial planning feels too scary or stressful – to the point that they continue to ignore their finances even when they know addressing financial issues is in their best interest. 

How to Overcome Financial Anxiety

pensive woman looks out window
(Photo by Alexei Maridashvili on Unsplash)

Overcoming financial anxiety is as much about self-care and fortifying mental health as actively managing finances. Financial stress and anxiety are prevalent for many reasons. The main one is that our finances can be affected by things out of our control. Even when finances are on track and everything is stable, a job loss or stock market crash can throw off the best laid financial plans. 

Here are a few tips for overcoming financial anxiety. 

1. Learn how to manage stress. Negative events are par for the course when it comes to finances. Instead of trying to control what you can't, learn techniques for managing the stress that can come with financial uncertainty. An effective way to do this is to start taking note of the thoughts that come up around finances, then practice stress management techniques to work through these difficult feelings.

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This can be done through journaling, cultivating gratitude toward your current situation and looking toward the future with a more positive outlook. If financial anxiety has become stressful enough to exhibit physical symptoms such as insomnia, headaches or lack of appetite, it may be beneficial to find coping mechanisms that help alleviate the physical responses to financial stress. One method that can help is the 4-7-8 breathing technique, which mental health professionals often recommend to help regulate the nervous system. 

2. Focus on physical health. Prolonged periods of stress can impact our overall health and well-being. The more time you spend focusing on improving your physical health, the better your mental health will be, which can help alleviate symptoms of financial anxiety. If you've suffered from financial anxiety for a long period of time, chances are it has started to impact you physically – whether that's a compromised immune system, digestive issues or trouble sleeping. To work toward improving these symptoms, start incorporating exercise into your daily routine. This can be as simple as starting off with a walk around your neighborhood or at a local park. Exercise releases endorphins, the feel-good chemical in our brains, which can help improve mood and keep negative thoughts at bay.

3. Speak to others. When dealing with financial anxiety, it can be easy to feel that you're the only person experiencing these negative thoughts and concerns over money and future financial outlook. But worrying about finances is a common issue, and in reality, very few people feel entirely financially secure all the time. Feeling alone can actually increase our stress levels, so speaking to other people in your life about your financial anxiety can make your fears feel valid and normal. Finding support within your social circle can be a powerful way to help manage and alleviate financial anxiety – however, talking about money and finances can also be uncomfortable. If you'd rather speak with someone you don't know personally, there are resources available for people who are specifically stressed over managing debt, such as the National Foundation for Credit Counseling.

4. Create a financial plan

hands seen typing on a computer
(Photo by Christin Hume on Unsplash)

You've learned how to manage stress levels, made changes to improve your physical health and confided in others about your financial anxiety. Once you've implemented these changes, you're in the right frame of mind to start slowly evaluating your current financial state. You can work toward putting a plan together that will make you feel more financially secure now and in the future. 

The first step in creating a plan to stop financial anxiety? Creating a budget. To do this, take a look at the last three to six months of your spending history and identify superfluous costs. The trick to creating a budget you'll stick to is not to omit every expense that isn't an absolute necessity but rather to build a budget that helps you save money that can be allocated toward your financial goals that doesn't leave you feeling deprived. 

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From there, focus on building an emergency savings fund to have in case something unexpected, like a job loss, happens. Ideally, having three to six months’ worth of living expenses saved is an ideal place to start. To do so, use the money saved from your budgeting exercise, and see if there are other ways to earn additional income to help build the fund more quickly.

5. Meet with a financial advisor

There's plenty of work you can do on your own to help manage financial anxiety but meeting with a financial advisor to discuss your future financial goals and current financial stressors can help take things to the next level. Once you've managed your budget and built up a savings account, a financial advisor can help identify low-risk investing methods to slowly grow your money. This can help you feel more financially secure and help alleviate financial anxiety. 


pennies in a jar poured out
(Photo by Josh Appel on Unsplash)

Financial anxiety is, unfortunately, a very common experience. Though it can be difficult to break the cycle of negative thinking and worry associated with financial anxiety, it's possible to cultivate a positive mindset around finances by following the proper steps. Identify stressors that trigger financial anxiety, learn how to manage them and take steps to improve your physical health. Then, get to work on building a financial plan that makes you feel as secure as you can with what you can control regarding your financial future.


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