4 tips for coping with money anxiety, from a financial planner who understands

4 tips for coping with money anxiety, from a financial planner who understands

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  • A lot of people suffer from financial anxiety – myself included, and I’m a financial planner.
  • I find that if I can stop myself from catastrophizing, it makes a big difference.
  • Being aware of my money also helps, as does learning from the mistakes I inevitably make.

You may be wondering how to pay your bills, save for emergencies, or manage your debts. Financial stress can quickly turn into financial anxiety, which can leave you feeling helpless about your situation and unable to make changes.

If you are suffering from financial anxiety, you are not alone. More than three in four Americans report feeling anxious about their financial situation, and nearly 60% feel their finances are in control of their lives.

Part of the reason I became a financial planner was to help people understand their financial anxiety and empower them through education to make smarter, more sustainable financial decisions.

But that doesn’t mean I’m immune to money-related stress — in fact, I have the same feelings of financial anxiety that many of my friends and family tell me about.

What is Financial Anxiety?

Financial anxiety is usually centered around uncertainty, instability, and fear of the unknown. In most cases, anxious thoughts are about the future and what may (and may not) happen.

Financial anxiety can range from feeling stressed about your overall financial situation to more specific concerns, such as savings, retirement, buying a home, or the cost of your child’s education. This can manifest itself in many different ways, such as avoiding checking your credit card balances, saving obsessively, monitoring your accounts, or worrying about money all the time. In short, financial anxiety is difficult to manage. Left unchecked, it can quickly overwhelm you and affect your daily life.

For me, financial anxiety manifests itself in many ways. These can be short-term factors, like if I feel like I’m spending too much in a given month or if an unexpected expense comes up that I’m worried about having to dip into my savings to cover it. Or it’s focused on achieving my long-term goals, like saving for retirement or buying a new home.

Fortunately, years of financial planning have helped me deal with financial anxiety and not let it derail my day (or week). Here’s how I handle it.

4 Strategies for Dealing with Financial Anxiety

Ignore catastrophism and focus on the present

In the past, when I felt anxious, I imagined the worst possible scenario in an effort to feel more in control of the situation. If I prepared for the worst, I would never be caught off guard, would I? Unfortunately, catastrophizing only fuels your existing anxiety (and may even reveal other areas of concern!).

So now, whenever I feel stressed about money, I try to remind myself that statistically only 8% of the things people worry about actually come true. In other words, nine times out of 10 your concerns are unfounded.

Don’t underestimate the power of mindfulness here, especially when it comes to financial worries. If I start to worry about the future, I will gently try to bring myself back to the present and ask myself if this is something I can control right now. Most of the time, my stress is based on a hypothetical situation that hasn’t happened yet. There is certainly some truth in saying “we will cross that bridge when we get there”.

Stay in touch with your money

The less you know or understand about your financial situation, the easier it is for financial anxiety to set in. Little things like checking your account balances, filling out your budget, or creating a plan to pay off your debts can all put you in control of your financial situation and allow you to take steps to improve your finances. It also limits the uncontrollable feelings that financial anxiety can produce.

Creating a financial plan is key to building self-confidence and overcoming financial anxiety. While reviewing your finances can be stressful at first, your anxiety will only increase the longer you wait. For many people, ripping the bandage off is the hardest part – once you get started, you’ll find that it’s usually not as bad as you thought.

Create your “why”

What do you want to accomplish in your life? For me, it’s a combination of long-term goals — retiring early and buying a house — and short-term goals, like taking a long-awaited vacation to Japan. It’s easy to want to take action and start sorting through all your bank statements. But creating some kind of “why” behind what you do can keep you calm, positive, and focused.

I also make it a point to openly share my financial goals with my family and friends. Not only does this keep me accountable and motivated to stay on track, but it also makes me feel more comfortable reaching out to them if I feel like I’ve gotten off track. Talking to someone about your financial situation can reduce overall stress, and loved ones can often help and encourage you to create a plan for improvement.

live and learn

Everyone makes money mistakes – and I’m definitely one of those people. Whenever I have financial problems (whether it’s an overpriced purchase or a bad investment), I try to take a second to assess the situation and learn from what I have. hurt.

While it can be uncomfortable to admit you messed up, facing up to your mistake can help you prevent it from happening again and move on — and reduce your anxiety and stress.

For me, the best way to control my financial anxiety is to not let it control me. We cannot predict the future, but we can control our actions and how we react to events or circumstances.

I am a strong believer in a flexible financial plan and the power to act. Some of my worst times of financial stress resulted in some of my smartest financial decisions, simply because my financial anxiety forced me to review my financial plan and take action.

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