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Top 5 Healthy Ways To Free Yourself From Money Anxiety

Increasing your financial knowledge reduces anxiety, but the key is to take action now!

  • Feeling anxious about money? You're not alone.
  • Studies show that a higher level of financial literacy leads to less financial anxiety or stress. In addition, they show that financially anxious adults are more likely to worsen their financial situation with costly financial behaviour, making them even more stressed!
  • Taking action is the best way to help combat financial anxiety. You can take proactive measures such as regularly checking your finances, establishing an emergency fund and keeping a financial journal.

Everyone experiences financial stress from time to time, but money anxiety is different. If you feel a constant unease and worry about money, you may suffer from dysfunctional and often obsessive concerns about your finances. 

Money anxiety can feel like a prison of anguish, fear, and stress over how much money is in your bank account. If left untreated, this type of anxiety is unrelenting and doesn’t give you much time to recover. 

Anxiety over finances can be brought on for other reasons, though. It’s not always due to a lack of income. You may feel consistently stressed over your credit score, investment losses, insufficient insurance coverage, debt, or spending habits. 

If this sounds like you, you’re not alone. There are healthy ways to manage money anxiety, and we’re here to help. 

Let’s talk about 5 ways to manage anxiety around your finances to live a happier, healthier life. 

Why is money anxiety so harmful?

Any type of anxiety is harmful to our overall well-being. When it comes to financial anxiety, these round-the-clock thoughts can trigger feelings of panic or fear, causing an extensive list of mental health problems. Money anxiety can be a toxic cycle, as many people overspend to feel brief happiness on the inside.  

Long term stress has been linked to sleep problems, depression, headaches, heart disease, hypertension, or stroke. Stress can affect your body, but it also affects your mind if left untreated. You may feel overwhelmed, unfocused, or irritable with others. If not appropriately addressed, money anxiety can lead to broken relationships, homes, and marriages. 

So, how do you overcome it?

5 tips for overcoming money anxiety:

5 tips for overcoming money anxiety 

1. Open the envelopes! Don’t ignore your financial problems.

When we experience anxiety, our bodies throw us into either fight, flight, or freeze mode. This can often cause people to either ignore our finances completely or obsessively worry about them. 

Money matters are simply too important and influential to ignore. Ignoring your debt, bank balance, or credit score can significantly impact your life. When you are blind to your finances out of fear, you allow them to run the show - no matter what happens. 

Being ignorant of your finances has been strongly linked with debt. Debt has, in turn, been correlated with lower self-esteem, fatigue, and depression. So, as you can see, understanding your money can affect every aspect of your life - not just your bank account!

If you’re experiencing money anxiety, you may feel temporary relief from not checking your bank account or credit score often. Or maybe even from pretending that an unwelcome bill isn't sitting there waiting to be opened and paid! This relief is short-lived as it almost always comes back to bite, causing even more feelings of shame, stress, and fear. 

2. Set aside time regularly to look at your finances:

This can go hand in hand with our first tip. Set aside time regularly to look where your money is going and how often it’s coming in. When you take time to assess your money each day or week, you’re no longer spending time in the dark. 

Not only are you setting yourself up for success when you set aside time to look at your finances, but you also retrain your brain’s relationship with money. If you’re only checking your bank account when you’re stressed, you’re subconsciously reinforcing the idea that money is something to be afraid of. 

Taking a look at your account regularly can prevent you from overspending in areas you simply don’t have the means to and can establish healthier ideas about your finances. 

Do this now: Put a reminder for a specific day and time to check your accounts in the calendar app on your phone, and set it to a weekly repeat with no end date!

Orange post it with the phrase "Do NOT Forget!" paste on a grey wall
Photo by Dianne Clifford.

3. Keep an emergency fund:

If you, like most other people, fear the unknown when it comes to your finances, establishing an emergency fund can be a great solution for calming those worries. It is usually recommended to have an emergency fund of three to six months of income. However, starting with an achievable target of $500, for example, is an excellent first step.

Emergency funds create a financial buffer to keep you from sinking if your car breaks down, or your pet gets sick or injured. When you aren’t worrying about how you’ll get through an unexpected expense, you’ll have more time to focus on other areas of your finances, such as financial goals, investing, and insurance, rather than debt management. 

Man having car problems on the roadside
Photo by Paul Knut.

Before building an emergency fund, you should prioritise paying off any high-interest debt. Once paid off, think of the credit limit on your cards as your first emergency fund while you accumulate a proper one. Once the emergency fund is established, you can use it to prevent yourself from getting into further debt, perpetuating the financial anxiety cycle. This will help you avoid or at least limit the high-interest credit card transactions or loans you may need in an emergency.

4. Track your income and expenses in a journal:

Financial security and safety are linked with significantly lower rates of depression. But how do you get there? Another way to ease your anxieties regarding money is by keeping a financial journal.

A financial journal - or ‘money diary’ - can help you learn how to budget, an invaluable skill in relieving yourself of financial anxiety. When you spend time being conscious of how and where you’re spending money and how you were feeling at the time, you’re less likely to binge on things you don’t need. This can improve your entire financial, emotional and mental well-being. 

Here's all you need to put into your journal (which, if you can, would be better if it was an actual paper journal!)

  • The date
  • What you bought
  • How much it cost (and how you paid for it)
  • How you feel about it or your mood at the time 
A woman stretching her arm out to take a selfie with her friend with shopping bags around her arms. 
But am I happy on the inside? By Andrea Piacquadio.

You can also try writing out an ‘ideal’ budget for the month. Where would your finances go if you didn’t overspend or go shopping? Then, at the end of the month, compare what you spent - and where that money went. This can help you become aware of areas that need improvement. As you continue each month, you’ll be able to narrow down more ways to cut out unneeded spending habits, ultimately loosening the grip your financial anxiety has on you. 

Alternatively, use a budgeting app. These apps are a fantastic way to view all financial information in one place. However, these are only a great way of tracking your expenditure if you remember to open the app regularly! Also, most banks have improved their features, so check the app offered by your main bank.

5. Understand your credit score:

Another area of finance you may feel fear or uneasiness over is your credit score. As unfortunate as it can be, your credit score can influence how far you will go in life. 

A credit score is often used to decide how likely you'll pay the lender back as agreed. It is usually a 3 or 4 digit number based on a credit report produced by a credit bureau. A good credit score puts you in a position to be offered the following: lower interest rates, credit cards, personal, business and student loans.

A bad credit score may mean you get denied loans, and if you do get them, you may have to pay a higher interest rate and potentially a larger downpayment upfront. 

A hand holding a key in front of a pink background
Photo by Kindel Media.

Understanding your credit score and how it works is the first step in fixing it. How can you resolve this problem if you don’t know what it is originally?

Improving your credit score will open many doors of opportunity for you, such as increasing your employability! Without this type of financial literacy, you can stay stuck in the money anxiety cycle with seemingly no way out. 

The better your finances, the better you feel:

While we’ve all heard the phrase ‘money can’t buy happiness’, it’s researched and documented that people with anxiety around their finances have higher depression and chronic stress rates. For example, a UK poll discovered that nearly four in ten (39%) people with a mental health issue declared their financial situation had exacerbated their mental health issues. How can you live your life to the fullest when you constantly have overbearing negative thoughts about your money?

Financial, emotional, and physical well-being are equally crucial in self-growth and creating a healthy life. In fact, if any one of those three is worsened, the other two are likely to follow. Financial well-being can make you an overall happier, healthier person. When you aren’t dragged down by money anxiety, you free up room to enjoy the things in life you’re passionate about without fear of the unknown. When we experience this freedom and mood boost, we are much more likely to take care of our physical bodies, too. 

Arguably, help should be sought on two fronts: from a therapist if the anxiety is crippling one’s well-being and from a professional financial advisor. Data from a Royal London survey (UK) showed that 68% of people who spoke to an advisor felt better about money management than 53% who did not talk to one. 

So, if you’re ready to start your journey into a better you, don’t hesitate. The better your finances, the better you feel.



  9. Header photo from Unsplash