How To Keep Financial Stress From Turning Into Financial Anxiety
Money can't buy happiness, but it sure can buy peace of mind.
When the American Psychological Association conducts its annual survey on the most common stressors in the United States, finances consistently rank toward the top, and a recent study on 1,000 American adults found that 85 percent of them feel stressed about money sometimes. Thirty percent of them are stressed about their bank accounts consistently. We worry about money so much that it starts to just feel like a necessary and defining part of adulthood—and that's a problem. Financial stress is far from benign, and if left unchecked it can fester into a threat to our health.
The difference between financial stress and financial anxiety.
"It's important to differentiate financial anxiety from financial stress. They're so closely related, but stress is more focused," says Megan McCoy, a financial therapist.
She explains that financial stress is pegged to one specific thing, such as a credit card bill that just came in. "Anxiety is stress on steroids," she continues. "It becomes so generalized when you feel so sick and worried for no specific reason—it becomes a lack of mindfulness."
This is the kind of money response that can become debilitating. According to a report from Will Towers Watson, a major insurance company, 34 percent of people polled said that financial concerns were negatively affecting their lives.
Anxiety of any kind is bad for the body, capable of doing everything from raising our cortisol levels and putting a wedge in our relationships to leading to panic attacks and dizzy spells. It's uncomfortable and impossible to rationalize. "There's a reason it started, but it spiraled out of control, and now there's not a reason—there's just a feeling."
How can you keep stress from becoming anxiety?
When McCoy meets with a client who has this kind of constant and convoluted reaction to money, the first thing she does is ask them to name what exactly it is they're worried about. Trying to put your concerns into words can help you start to get over them, she explains: "I think money anxiety is something that festers in your brain when it's left alone. It needs to be let out and talked about."
It matters less who you're talking to and more that you're talking. This is especially true if you're in a relationship since she says that money often drives a silent wedge between couples that can disappear once people get honest—no matter how uncomfortable the conversation might be.
Once you nail down the tangible "worst-case scenario" you are worried about, you can start to take baby steps to prevent it. If you're worried you won't be able to pay an unexpected bill, start a new routine of putting a certain amount of your paycheck every month into an emergency fund. If your bank account keeps disappearing before your eyes, take an hour to print out your bank statements and highlight the payments you could have lived without.
"A lot of anxiety is a sense of powerlessness and not having control. So even if your financial situation isn't perfect, if you have a plan, all of a sudden you have control over your financial situation and you'll feel happier," McCoy explains.
She's seen people have success with budgeting apps like Mint, but you should be careful with those if you're prone to anxiety since they can trigger you to compulsively check in. If you find yourself obsessively opening the money management app on your phone, consider getting rid of it and just checking in online on set days of the month.
By talking it out, creating a plan, and monitoring your inner dialogue around money, you can stop financial stress in its tracks and save yourself a lot of headaches.