Financial anxiety is a natural reaction to the uncertainty we’ve all experienced during the Covid-19 pandemic. If you’re feeling it, you’re not alone. Some of the most obvious symptoms are fear, lack of control, depression, and obsessive behavior. In extreme cases, anxiety could lead to overspending or hoarding. Don’t despair. There are ways to treat those symptoms.
This is not a treatise on how to pay off debt. That might alleviate your financial problems in the moment, but it doesn’t address the underlying causes behind your stress. Financial anxiety can cause physical health problems. If you’re feeling overwhelmed, seek professional help. If you feel you can handle it on your own, we have some tips that might help.
Tips to Overcome Financial Anxiety
Reaching a place in life where you can claim you’re financially secure requires a change in behaviors and attitudes about your finances. The following tips can help you even if you’re not feeling the stress of an uncertain economic environment. Use these as a roadmap to get you to where you truly want to be, a place where you no longer need to worry about money.
- Take an Honest Look at Your Finances: Identifying your financial situation is the first step towards reducing financial anxiety. Uncertainty creates stress. Eliminate the uncertainty by gathering all of your statements, paystubs, debts, etc., so you can see a complete picture of your situation and the areas where you need to focus.
- Start Saving Money: Save $10 a week and you’ll have over $500 in your savings account at the end of the year. Make it $50 a week and you’ll have enough to pay a month’s worth of bills. The amount doesn’t matter. It’s the habit of savings you want to cultivate.
- Track Your Income and Expenses: Creating a budget is another way to take the uncertainty out of your personal finances. Know how much you have coming in and what’s going out. That should alleviate some of your fears, especially if any of them are irrational.
- Avoid Impulse Spending: Buying something on impulse can give you feelings of guilt and buyer’s remorse. Avoid this by giving yourself time to think before making any purchase. That could mean a five-minute pause, a good night’s sleep, or even waiting a week.
- Monitor Your Credit Score and Reports: Your credit score can tell you how well you’re managing your spending and debts. Your credit report gives you the particulars on areas you need to improve. Knowledge is power, so use these to take control of your credit.
- Ask for Help: We’ve listed this last, but it might be the most important suggestion on this list. If you need help, ask for it. That could include financial coaching, counseling to help treat anxiety, or a combination of both. Address the problem. Don’t ignore it.
The Bottom Line: Don’t Minimize Financial Anxiety
According to a study conducted by Northwestern Mutual in 2016, four years before the pandemic, 85% of Americans experienced financial anxiety. Most of them reported a negative impact on their social lives, physical health, and careers. It’s a serious problem, so don’t minimize it. Recognize the symptoms early and take action where you can.
Financial security cannot be achieved without first addressing the anxiety you may feel around money. These six steps are a good place to start. Become aware of your situation, save money, track your income and expenses, avoid impulse spending, monitor your credit score, and most importantly, ask for help if you need it.
