3 Tips To Get Over Financial Anxiety & Budget Better From Financial Experts
When you think about the things that stand in the way of you and your financial goals, the first thing to come to mind are likely the practical hurdles. From surprise expenses to income changes, there's no shortage of roadblocks that can inhibit our ability to plan for our financial day-to-day lives and futures. But we should also be mindful of the mental health barriers that may be limiting our relationships with our personal finances.
And the most common emotion people have around money is anxiety. According to recent surveys, one-third of Americans say they're more anxious about their personal finances for 2022 than they were in 2021. Another one-third says that they're just as anxious about this year as they were last. That's two-thirds of Americans who feel anxious when they think about money.
And other than anxiety just being an unpleasant feeling to experience (no matter the cause), it can also hinder smart money decisions. "Unfortunately, neither financial literacy nor emotional literacy are taught, so when these feelings come up, we don't know how to deal with it," Bari Tessler, a financial therapist, tells us about financial anxiety.
That's why we have to get clarity about our own financial situations before we can move forward in a more thoughtful manner. Here, three steps you can take to ease your financial worries and gain confidence with your budgeting choices.
Understand the root of anxiety, and learn to embrace it.
It's so common to avoid what you're anxious about. We all do it. But you won't be able to deal with your financial concerns until you address these uncomfortable feelings. Whether you realize it or not, that anxiety is influencing the decisions you make.
"When it comes to making decisions, we essentially have two different brains that think very differently: a thinking brain, which is driven by reason and logic, and a feeling brain that is driven by emotion. [Roughly] 90% of our decisions can be made at a subconscious level within the feeling part of the brain. Guess what activates this part of the brain? That's right, anxiety," says Brent Weiss, who is a founding member of Facet Wealth and a Certified Financial Planner™ professional. "And money is the No. 1 cause of anxiety and stress. The simple thought of it can trigger anxiety, which triggers the feeling brain, which can lead to unhealthy behaviors. It's a terrible domino effect."
Weiss notes that the trigger of anxiety is different for every person—but is often shaped around our childhoods, how our parents' dealt with money, any money-related trauma we've experienced in the past, and so on.
"Not everyone feels all of this, but we all feel some of it, and these feelings are driving the decisions we make every single day," Weiss explains. "And overcoming anxiety isn't about eliminating it entirely. Rather, it's about controlling it and channeling its power to make better, healthier decisions."
So if the first step is acknowledgment, what follows? How can we actually take those poor feelings and turn them into prosperity? So glad you asked.
Find your unique financial clarity.
"When money triggers anxiety, it can push us into a subconscious state of chaos where our feeling brain overrides the decision-making process. We still think we are making smart decisions when, in fact, we aren't really in control," Weiss says. "When we control the trigger, we control the anxiety."
And controlling the trigger comes with clarity. Specifically, three areas: Clarity around our money mindset, what meaning it has in our lives, and our financial landscape:
- Mindset: A fair warning: Understanding your money mindset requires some introspection. "Every one of us has a unique story that we tell ourselves about money, and these beliefs, both healthy and unhealthy, are influencing the decisions we make every day," he says. "Exploring our history with money, the stories, and feelings can help us identify the unhealthy beliefs that are holding us back." If it helps, consider making it part of a larger journaling practice.
- Meaning: Finding financial meaning comes down to identifying what you consider important in life generally. Money is a tool that should serve you and your needs: So you need to identify what those are in the first place. "I often find that people are starting from the wrong point with their money. We often ask, 'What should I do with my money?" he says. "The better place to start is to explore what really matters to us, what we want to achieve, the person or partner or parent that we want to be, and then to figure out how money can be used as a tool to support the life we want to live."
- Landscape: Raise your hand if you avoid checking your bank account and bills when you're stressed out! But in fact, taking time to check in those is exactly what you should be doing. "Getting financially organized is the most underrated step we can take to gain greater clarity with our finances," he says, noting the place to start is looking at your budget (or what he calls "money flow"), what you currently own (assets), and what you owe (such as credit card debts or student loans). "The simple act of getting organized can reduce our anxiety, create peace of mind, and help us remain calm when making life and financial decisions."
Recalibrate, recalibrate, recalibrate.
Listen, doing the above takes work. Getting the root of anxiety, critically thinking about your priorities, and taking stock of your current situation isn't easy. So once you've done it once, you may be tempted to, uh, never do it again.
But being financially and emotionally intelligent is a lifelong journey. Whether you realize it or not, you have a relationship with money—and relationships require work if you want them to be healthy.
"Every chapter in life or every life milestone requires a recalibration. A lot of people think their decisions in the past will continue to work in the future. It's the idea that we create a plan and put our financial lives on autopilot," Weiss says. "Life and the world around us are ever-changing, so we need an ongoing and dynamic financial plan that can evolve with us, help us navigate life with greater clarity and confidence, and achieve that next level of growth."
And at any point when you're on this journey, don't be afraid to ask for help. "Many people are waiting for the right moment to seek professional financial advice," he says. "Our financial health is just as essential to living well as is our emotional, occupational, and spiritual health, and the best time to invest in our financial lives is today."