But there is what we call financial anxiety which is different from the typical money stress.
The psychological definition of financial anxiety is “a psychosocial syndrome whereby individuals have an uneasy and unhealthy attitude toward engaging with and administering their personal finances in an effective way.”
While there is no test to diagnose financial anxiety, there are common signs to watch out for.
Do you tend to excessively stress about spending money?
Do you constantly worry about slipping into debt even if it is manageable?
Do you overspend often? Or are you obsessed with being frugal?
Do you overwork and underspend because of the fear of not earning and saving enough?
Do you rely entirely on others to handle your finances?
Or do you not talk about finances with your family and friends because you do not want to look weak?
If you answer yes to most of these questions, then read the tips below to reduce the financial anxiety.
1. Be aware of how your body and mind react
Like in any problem, acknowledging it is the first step in solving it. Start paying attention to your emotions and how your body reacts when you think of money matters or make financial decisions. Do you experience sweaty palms or racing heartbeat? Do you feel agitated, ashamed, or guilty? Acknowledge these emotions so that you may eventually be able to control it.
2. Look at the positive
Instead of focusing on the negative, look at the positive aspects of your finances. Think of the positive aspects of your finances- like you have stable work, or you have more than one source of income, you regularly set aside a percentage of your money for savings, or you have started building your emergency fund. It will not miraculously solve financial challenges but it can help calm your fears. It can also help you think clearly and logically.
3. Move on from financial shame
Perhaps you mismanaged your money before, or you did not save money early enough. Accept that mistake and move on. Do not let your past mistakes hinder you from correcting your present and future. Think of ways so as not to repeat the same mismanagement.
4. Stop comparing yourself
It is easy to compare ourselves with others especially with social media. With just one click, one can easily browse the lives of other people. This can make us wonder why they seem wealthy while you are not. But remember, do not fall into that trap. There are a lot of stories behind every post- you do not know the hard work and sacrifices behind one person’s success, or the true status of their bank accounts.
So instead of comparing yourself with others, focus on how you can improve your finances. Do not stress yourself over wishing that you live a life like theirs as this will just add to the anxiety. If all else fails, turn off your social media for some time.
5. Review your budget
Regular budget check-ups should be done to ensure that you are still on the right track of managing your finances. Go over your bills and expenses versus your budget. If expenses are piling up, check where you can reduce bills or add budget. Make sure that you regularly set aside for your emergency fund. Repeat this as needed to feel more in control of your finances.
6. Have money conversations with your partner
Do you manage money with someone else- such as your spouse or partner? If yes, then a clear division of financial responsibility can help lessen the anxiety, especially if you are shouldering too much. Set aside a time to talk to your partner about your financial worries. Be honest and open. This can lead up to you being relieved or better yet, both of you creating a better plan for your shared spending and saving.
7. Seek help
Talk to a financial advisor to help calm your fears and give you sound advice on how to save for retirement, or start investing, or simply define your financial goals. Make sure to choose a financial advisor you can trust and build a long- term relationship with.
8. Educate yourself
Oftentimes, the cause of financial anxiety is te fear of the unknown. In this scenario, knowledge can be our tool to calm the fear. Information is rich and abundant. You may enroll in a financial literacy program, research retirement options online, take a short online course on Accounting, or read up on blogs on finances. By learning more about money, the more it becomes something we understand and can control.
In these trying times, there are a lot of reasons to be anxious about our finances. But there are a lot of ways also to reduce this anxiety. As long as we educate ourselves, be disciplined and focused, these fear of money matters will eventually turn into confidence.