If you asked 10 people to list the top three things that are likely to cause anxiety, the chances are every one of them would mention money worries. Financial stress is the great leveller, and it affects people from every background, regardless of age, sex or background.
The effect of financial anxiety should not be underestimated. Kristy Archuleta, a professor at Kansas State University and an editor of the Journal of Financial Therapy says: “Financial anxiety can be debilitating, and it can cause significant distress in one’s daily life.” Archuleta mentions a study carried out in 2016, which showed that 85 percent of Americans worry about money. It is fair to assume that the same holds true on this side of the Atlantic.
Financial anxiety might be commonplace, but that does not mean there is nothing we can do about it.
Who is at risk?
You might think anyone who is anxious about money will already know about it. But it is important to recognise that there is a difference between being short of money and having financial anxiety. It’s possible to have little or no wealth and not to be anxious about it, or to have millions in the bank and to still lie awake worrying.
Financial anxiety shares common factors with more generalised anxiety disorders, such as irritability, worry and an inability to concentrate. It can be brought on by many things that go beyond simply being overwhelmed by bills or losing your job. For example, a childhood spent seeing your parents worry about money, or spend too much of it, can lead to anxiety down the line.
Recognise the signs
Classic signs of financial anxiety include the following:
- Feeling depressed
- Being obsessed with frugality
- Relying on others to handle finances
- Discomfort over accumulating wealth
- Being stuck in a vicious circle of unhealthy financial behaviour
How do you react when you have to discuss finance or make financial decisions? Start making a conscious effort to observe your physical and psychological reactions when you check your account balance or settle a bill.
If there is a physical reaction, such as elevated heart rate or sweaty palms, the first step towards addressing it as to acknowledge it. Also assess your emotional reactions. Are you feeling guilty? Ashamed? Just plain frightened?
This kind of body check-in is a great tool to help you work in tune with your emotions instead of simply being driven by them.
Getting to the bottom of financial anxiety is not as straightforward as simply sitting down with a financial advisor and “getting your finances in order,” although that might certainly help. It is also vital to understand the internal triggers, whether these are physical, for example due to serotonin deficiency that can be easily addressed, or psychological.
Relieving yourself of financial anxiety involves more than just dealing with the numbers on a spreadsheet. But if you are honest with yourself and acknowledge both the internal and external factors, it is something that can be achieved.