Money anxiety is also called financial anxiety. Financial stress is one of the primary sources of anxiety. As the cost of living continues to rise, it impacts more people than ever.
Currently, 40% of Americans share that they are worried about money. This problem has become so common that worrying about money in excess is now referred to as money anxiety disorder or (MAD).
Some underlying issues contribute to this trend. The 2022 Stress in America Survey conducted by the American Psychological Association found that 87 percent of participants cited inflation as a source of significant stress.
The researchers shared that money stress is the most significant stress seen since the survey began in 2007. Rising prices from basic food essentials to fuel impact all wealth levels. Anyone paying attention is aware of this issue, and many are concerned about it.
For many, their relationship with money is a source of stress.
Continued financial worries and stress in your life can lead to feelings of anxiety and, in turn, hurt your quality of life.
Summary: Wealth Inside and Out® Podcast – 3 Steps to Manage Anxiety About Money
Today, you will learn:
>>6:00: What is money or financial anxiety
>>8:24: How anxiety often manifests in your life
>>9:30: How social media impacts money stress
>>13:53: Understanding rigidity and rumination about income and expenses
>>21:25: Recap of anxiety regarding finances
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I’m a Certified Financial Planner™ and founder of The Millionaire Insider®.
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Money-related anxiety can manifest in various ways, impacting both mental and physical well-being.
In this episode, we will explore:
- What money-related anxiety is,
- Root causes of financial anxiety, and
- Effective strategies to cope with it.
Understanding Money-Related Anxiety
Anxiety about money, also known as financial anxiety, is an emotional response to financial stressors. It goes beyond the normal concerns associated with managing one’s finances. It can negatively affect a person’s overall quality of life.
This type of anxiety can arise from various factors, such as:
Uncertainty about the Future
The uncertainty of life and the future can trigger anxiety. Economic downturns, job instability, and unexpected expenses contribute to their worries.
Excessive debt for you or your loved ones can be a significant source of financial anxiety. For many, concerns about their kid’s financial future cause them stress.
The culture of comparison, fueled by social media, can lead to feelings of inadequacy and anxiety.
Lack of Financial Literacy
Insufficient knowledge about personal finance can create anxiety. Feeling unprepared or uninformed about managing money can contribute to helplessness.
When Should You Become Concerned?
Money anxiety includes worry about finances, including your income and ability to pay your bills.
It includes an emotional reaction to your financial situation.
Having anxiety about money doesn’t mean you don’t have money. For many, it is a concern that their children aren’t saving enough for retirement.
The Impact of Money Anxiety
Financial-related anxiety can increase mental health concerns and make it difficult to enjoy your life.
Common challenges include:
1. Family conflict and marital discord
Worrying about paying the bills can increase irritably and reduce patience. And you may avoid discussing it.
2. Physical ailments
These can include aches and pains or depression and other illnesses.
3. Substance abuse
While a drink may temporarily distract you from your money stressor, it is a temporary fix. It won’t fix the underlying money problem. Learning to process your emotions is critical.
You avoid dealing with your finances. This can include ignoring bills or not balancing your checkbook.
This includes budgeting your money down to the last dollar. When you need to make a minor adjustment, it turns your life upside down.
Some people can’t stop thinking about their 401k or investment accounts. They check the stock market multiple times daily, increasing their stress.
7. Sleep Problems
Some people lie awake thinking about the next unexpected expense or whether they can ever afford to retire.
Over time, lack of sleep can negatively impact your health, memory, and mood. It can also cause several other health problems.
Strategies to Cope with Money-Related Anxiety
Anxiety about money is as much, if not more, about mental health as it is about financial health.
Balancing your checking account when you’re worried about your financial future is challenging. Luckily, these strategies can help you cope and build a better future.
Mindfulness and Exercise
Mindfulness is the practice of being present and can provide calm and reduce anxiety. Focused breathing exercises are a great place to begin. Similarly, exercise has been shown to reduce stress and anxiety. Find an activity you enjoy, whether walking, hiking, yoga, or jogging, and incorporate it into your life.
Create a Plan
Planning for your future is a critical step. This includes having a financial plan and a spending plan along with a retirement, tax, and estate plan.
Budgets should outline how you will spend money and pay off credit card debt. Having a plan should help reduce your stress and feeling of overwhelm.
Establish an Emergency Fund
An emergency fund can provide a financial safety net and reduce the fear of not having cash for unexpected expenses. Experts recommend 3 to 12 months of cash equivalents.
Seek Professional Guidance
Hiring a financial advisor to help you develop a customized plan can dramatically reduce stress. They have the experience to help you manage debt, invest, and achieve your financial goals.
Hire a Money Coach
If you need help with your money mindset, a financial counselor, coach, or therapist may be your best option. Talking therapy and CBT (Cognitive Behavioral Therapy) have proven successful for some people struggling with money issues. Talking about money issues with supportive family and friends can also help alleviate worry and anxiety.
Set realistic expectations for yourself and celebrate progress along the way. Give yourself rewards for hitting your goals. Start with 70% success and then increase until you hit 80-85%.
Conclusion – 3 Steps to Manage Anxiety About Money
Over time, you may become overwhelmed by your financial situation.
Fortunately, individuals can regain control of their financial well-being by understanding the root causes of financial anxiety and implementing proactive coping strategies.
Several practices can help you stop worrying about money so you can enjoy your life. Examples include:
- Hiring a financial advisor or money coach,
- Practicing mindfulness, and
- Creating a plan including a budget.
Until our next episode, take one action that will help you create a secure financial future and retirement you love.
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3 Steps to Manage Anxiety About Money
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