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What is Financial Anxiety?

Jonathan Riley

“A day of worry is more exhausting than a week of work.” ― John Lubbock

Everyone worries about money from time to time, but financial anxiety is different. Financial anxiety is an obsessive fear of things related to money that can often be debilitating. Financial anxiety is defined by psychologists and financial experts as an uneasy and unhealthy attitude towards managing personal finances. It can have a significant impact on your mental and physical health, relationships, and overall quality of life.

Those who suffer from financial anxiety are constantly concerned about bills, falling into debt, or coping with any aspect of personal finances. Financial anxiety, like any other source of anxiety, is unhealthy. According to Relationships Australia, 70% of couples report that money is a source of conflict in their relationships, with disagreements over money being a stronger predictor of divorce than other sources of marital conflict.
Symptoms of financial anxiety

There are numerous symptoms associated with financial anxiety, some of which are obvious, while others may surprise you. Here are just a few:

Overspending: You would think that people who are worried about money would save their money, but for some people, compulsive spending provides temporary relief from their financial worries. As a result, it becomes a vicious cycle in which people keep spending in order to get relief, exacerbating the problem.

Hoarding: Hoarders have a difficult time parting with the money and possessions they have accumulated. A person may feel as if they never have enough money and may develop workaholic tendencies in their quest for ever-increasing wealth. This can result in less time spent with family and friends and more time spent in isolation, which can have a negative impact on mental health.

Fear of spending: The other side of hoarding is being frugal beyond reason. People who overwork or work obsessively may experience the fear of not having enough. Obsessive saving can prevent people from taking vacations, living in a comfortable home, and spending money on essentials like home repairs or healthcare.

Shame around finances: People with financial anxiety often are uncomfortable accumulating wealth. They frequently experience feelings of guilt, inadequacy, or embarrassment as a result of having too much or too little money. This can make budgeting and prioritising household expenses difficult and negatively impact retirement planning.

Obsessive behaviour: Financial anxiety can lead to obsessive behaviours like checking bank accounts, credit card statements, stock portfolios, and cryptocurrencies constantly.

Dysfunctional family finances: Financial anxiety can be reflected or caused by how a family manages money. A family member may lavishly spend money on himself or herself while depriving the rest of the family. As a result, couples may blame one another for their inability to manage their finances. They may then deny other family members access to their money and exert control over how it is spent, including withholding funds for basic needs and care.

Financial anxiety can affect any income level. For example, someone in a lower income bracket may experience financial stress because they’re not sure how they’re going to put food on the table for their family. Whereas a person in a more middle-income bracket can experience the same level of stress worrying about how they’re going to pay for their child’s education. Very different circumstances, but both cause similar levels of anxiety. This holds true for those in higher income brackets as well. Although their concerns typically aren’t nearly as dire as providing food for their family, they can still experience the same financial stress as keeping up the facade of being wealthy.

If you’re dealing with debt, you’re not alone. Studies show that half of all adults who are in debt also have mental health problems related to worrying about money. When you worry about money, it can feel like a burden that you’re dealing with alone. Unfortunately, this loneliness only makes things worse. If financial anxiety is not addressed, people may engage in unhealthy behaviours ranging from avoidance, overeating, alcohol, and drug use, all of which can deteriorate mental health. Understanding the link between financial anxiety and your mental and physical health can help you start to reduce financial anxiety.

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.