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How to Cope with Financial Anxiety

Jonathan Riley

A big part of financial freedom is having your heart and mind free from worry about the what-ifs of life.” ~ Suze Orman

Living with financial stress is an unfortunate reality for most of us. People who have a lot of debt, few assets, or a limited income have always been more vulnerable to financial anxiety. Financial anxiety can be constant and debilitating in some cases. In the worst cases, it can become all-consuming, affecting many aspects of your life, leaving you feeling constantly on edge and unable to relax or make sound decisions. If left untreated, financial anxiety can have a negative impact on both your mental and physical health.

  1. Avoid catastrophic thinking. When our financial situation appears to be out of our control, we can easily fall into catastrophic thinking, dwelling on the worst-case scenario and becoming consumed by self-doubt. Keep things in perspective to reduce the negative effects of irrational worries.
  2. Think about the worst-case scenario. While your financial situation is most likely not life-threatening, your financial stress can be. Face your fears head-on. Taking a hard look at the worst-case scenario can help you keep things in perspective while also lowering your anxiety.
  3. Discard financial shame. Comparing your lifestyle or spending habits to those of others, especially on social media, only adds to your financial anxiety. Spending and accumulating wealth is not a competition, so avoiding social media can help reduce comparisons.
  4. Be grateful for the good things in your life. When you are dealing with financial anxiety, it is all too easy to focus on the negatives. You do not need to ignore reality and pretend everything’s fine, but you can appreciate what you do have. Making a list of five or ten things you are grateful for can help you gain perspective.
  5. Identify your financial stressors and make a plan. Examine your financial situation and the areas of your life where money causes you anxiety. Make a list of ways you can cut costs or manage your money more effectively, then commit to a plan and review it on a regular basis.
  6. Create an emergency fund. If you know that you have enough money saved up to pay your bills in the event that you become ill or lose your job, having an emergency fund can provide you with a sense of security and peace of mind.
  7. Avoid temptation. While you can’t avoid shopping centres and online shopping entirely, limiting your time there can help you manage your spending. Choose an alternative social activity over shopping. Leave your credit and debit cards at home and carry only the cash you can afford to spend to avoid impulsive spending.
  8. Make a budget. A budget can assist you in planning where your money will be spent each month. Instead of crossing your fingers and hoping you do not overspend, set a firm limit to stick to while shopping. According to a 2022 study, the most effective strategy for reducing money-related anxiety was planning.
  9. Focus on yourself. It is impossible to get your finances in order if you are not in the right headspace, you first need to focus on yourself. If you can ease yourself into a more relaxed state, you will be able to assess your situation, make better-informed decisions, and see your next steps more clearly.
  10. Ask for support. Anxiety about money can cause you to withdraw socially. This leaves you alone with your anxious thoughts, worsening the problem. Having a support system can help you reach your goals, so surround yourself with people who care about your success.

Today, many people are worried about money, and these lingering feelings of financial anxiety can make people feel overwhelmed. Over time, they could also contribute to serious mental health concerns, including depression and chronic anxiety. Long-standing financial issues can take time to resolve, but you do not have to face your fears and concerns alone. A counsellor can assist you in developing effective self-care strategies and techniques for dealing with anxiety and stress.

My Practice provides affordable counselling and all profits are reinvested into the organisation to continue providing low-cost counselling and mental health services to our community. If you’re interested in scheduling a free 15-minute consultation with us, book online today.