How to Reduce Money Anxiety

It’s that feeling of dread or panic that comes over you when you think about your finances. It can impact your sleep, what you eat, and even how you make financial decisions. Triggered by anything from wondering how you’re going to make ends meet to worrying about retirement, anxiety is experienced by everyone from time to time. It’s a natural reaction to stress that helps us deal with challenging situations and can even help us stay motivated.

However, money anxiety is more than worrying about not having enough money. It’s a persistent, often irrational fear that can impact your life for years. It is unhealthy and can create trust issues, impact personal relationships and make everyday tasks much harder.

But the good news is there are several ways to reduce your money anxiety and improve your holistic financial well-being. Read on for valuable tips and advice on reducing financial stress and building a solid financial future.

Where does money anxiety come from? 

Money anxiety stems from the uncertainty of what the future holds. It’s a fear of having insufficient resources to cater to future needs. You are more likely to be anxious about money if you have a history of deprivation, low or unsteady income, and accumulated debt since these impact your relationship with money. The rising cost of living is also another major cause of financial stress.

What are the symptoms of financial anxiety?

Common money anxiety symptoms include:

  • Insomnia or other sleep difficulties: If you’re worrying about money, you’re more likely to have trouble falling asleep and staying asleep. And that can lead to all sorts of other problems, like feeling exhausted during the day and being less productive at work. Sleep deprivation can also impact your ability to make financial decisions. Over time, it can significantly impact your health, increasing the risk of developing conditions such as high blood pressure, heart disease, depression, and much more.
  • Weight gain (or loss): My emotional stress response is to gravitate toward comfort food. When I am stressed, I eat! Stress often affects people’s appetites in different ways, which can lead to either weight loss or weight gain.  
  • Family conflict: It’s no secret that money issues are one of the top reasons for divorce. Opposing attitudes on handling money, mismatched financial priorities, financial infidelity, and debt are some issues that can cause money anxiety. These issues can leave you feeling irritable or resentful toward your loved one leading to heated arguments.
  • Substance abuse: Some people use alcohol or drugs to cope with financial stress. While there offer temporal distraction, alcohol and drugs pose some health risks, including dependence and addiction.
  • Overspending: Ideally, money worries should keep you from overspending. However, for most people, retail therapy offers temporary relief from their fears. It provides an instant mood boost. While retail therapy is not essentially wrong, it can become a vicious cycle where you keep spending to get relief or have no control of your spending making your situation worse.
  • Hoarding and fear of spending: Hoarding involves the urge to collect unnecessary objects and the inability to throw things away. Money anxiety may lead you to hoard certain things long after expiration, including food items. Or it may manifest itself in another way – extreme frugality or fear of spending.
  • Gambling: When your debts and expenses seem too steep to conquer using typical methods, you may consider gambling an option. It also becomes easy for you to get sucked into get-rich-quick schemes, MLMs, and other con games. 

How to reduce money anxiety

No matter how bad your financial situation may seem, there is always a way out. These strategies can help you break the cycle, ease financial stress, decrease money problems, and find stability again.

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Take inventory of your finances

Are you avoiding calls from creditors? How many bills have you left unopened because you struggle to make ends meet? Denying or ignoring the reality of your situation will only make things worse in the long run. 

The first step to devising a plan to solve your money problems is a money check-in. To do this:

  • List all your sources of income and expenditure
  • List all your debts
  • Track all your expenses
  • Identify your spending patterns and triggers
  • Download a money app like it to help you get started.

Once you have done a money inventory, make a plan to overcome your money anxiety.

  • Make small changes, such as eliminating impulse buying to improve your overall spending
  • Be kind to yourself. Remember to celebrate small wins, and quickly forgive, learn, and move on from financial mistakes.

Set financial goals

Image of income and expenses in the app. Gains include income. Expenses include groceries, healthcare, restaurants, pharmacies, and unsorted.

What do you want your money to accomplish for you in the short- and long-term? Do you want to be debt-free, buy a house or a car or go on vacation? Or do you want to be debt-free? Write down everything you want to achieve and provide a timeline with the specific amount needed. For example:

Having a financial goal can help you focus your financial anxiety productively. Afterall, you willhave something to work toward.

Create a realistic budget 

A budget is just a spending plan. By planning and categorizing your spending, you’re giving yourself the best shot at achieving your goals.

For beginners, consider downloading an automated budgeting app, like Once you connect your account, you can plan where your money goes and keep track of each category.

Into using paper? Try using the 50/30/20 principles when budgeting. They allow you to allocate 50% of your income towards living expenses, 30% to wants, and 20% to savings and paying off debt.

Manage your debt to reduce your money anxiety

To effectively manage debt, start by listing all your outstanding debt, including the interest rate. There are two main strategies for paying off debt: prioritizing balance with the snowball method and avalanche method based on interest rates. The aim is to start by paying off high-interest loans to reduce the overall cost of debt. Always look for opportunities to consolidate multiple loans into one loan with a lower interest rate. If your debt is overwhelming, take an honest look into your spending to eliminate areas of wasteful spending.

Build an emergency fund

How often do you have unexpected car problems? Or how often do you get sick or your appliances need replacements and repairs? By building an emergency fund, you’re financially preparing yourself to deal with life’s unpredictability.

An emergency fund is typically 3 – 6 months’ worth of your living expenses, but when you’re thinking abouthow money makes you feel, you may have a higher or lower risk tolerance. That means a larger emergency fund may make youfeel more secure and less anxious about money.

Practice mindfulness

How do you physically react to money-related issues? Does your heart rate spike, or do you begin sweating uncontrollably? When you notice these symptoms, try to counter them with stress-reducing activities such as deep breathing exercises. You can also take a break from the situation to take a long walk, meditate or practice yoga before going back to tackle the issues with a clear mind. Try to also restructure your thinking by reminding yourself that there are things you cannot control. Practicing money mindfulness is one of the most powerful tools for managing money anxiety.

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Seek professional help

What if there was someone who could help you deal with your money anxiety? Someone who could help you make better decisions with your money, and give you the tools you need to break out of that vicious cycle?

That’s where a money coach comes in. A money coach is not a financial advisor, but rather someone who specializes in helping people deal with their relationship to money. They can help you understand your own personal money story, and work with you to create a plan to make better decisions with your money.

If you’re struggling with money anxiety, a money coach could be just what you need to help you get your finances back on track.

You can also seek support from a mental health professional or consider financial therapy if money anxiety starts to cause lasting distress and begins to intrude on your daily life. 

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Final thoughts on how to reduce money anxiety

Constantly worrying about money won’t make your money problems magically disappear. Instead, taking inventory of your current situation and taking deliberate steps to change it will go a long way in helping you manage money anxiety. As you find proactive ways to stay on top of your finances, the fear that comes when handling money issues dissipates in favor of control and confidence. 

However, if financial anxiety is causing significant distress or making it difficult to manage your life, you may benefit from help. Consider working with a mental health or financial planning professional to help you cope with your anxiety and make progress on tackling your money challenges.

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