Financial anxiety: Why we experience it and how to cope
Finances are a main source of stress and anxiety for many people. A 2020 financial literacy survey by the National Foundation for Credit Counseling found that 69 percent of Americans 18 and older reported that they have financial worries. Of the 69 percent, 25 percent were worried about not having enough money saved. People of color are also disproportionally affected—a 2020 survey by NEFE found 78 percent of Hispanic Americans and 76 percent of Black Americans experienced financial difficulties last year compared to their white counterparts (63 percent).
Financial anxiety may also affect women more. Studies show that women report higher levels of money stress than men due to a historically (and arbitrarily) gendered approach to financial education. "We often teach women about the importance of saving money. Saving money on groceries, clothes, shoes," explains social worker and financial therapist Lindsay Bryan-Podvin. "For boys, we tend to teach them more about feeling comfortable and confident and powerful with their money. Things like negotiating for a raise and asking for more."
Where has this gotten us? "We have a history that has boxed women out of finances for years," Bryan-Podvin says. "It wasn't until the 1960s and 1970s that women could have their own bank accounts without their husband or dad signing off on them...or get their own credit cards. There are some real systemic reasons that women haven't been able to access the same type of means and education and resources to money that men have."
Despite the systemic barriers that prevent financial literacy and empowerment for many, there are ways to get over your fear of money. And turns out, acknowledging that anxiety and finding ways to cope goes a long way in helping with financial stress. Here is what experts have to say on how you can build a more positive relationship with money and find support to manage financial anxiety.
Acknowledge that you have financial anxiety, and notice how it shows up for you
Financial anxiety can manifest in many ways—just like traditional anxiety. Tonya Rapley, millennial money expert and founder of financial education and lifestyle blog My Fab Finance, says financial anxiety is "discomfort around having to deal with money in any capacity."
"Financial anxiety is just the emotional response you have to any major financial decision, the state of your current finances, and the role that money plays in your life," says Rapley. She says emails, bank statements, and conversations with friends and family about your money are all things that can trigger financial anxiety. And the response is not just an emotional one—it can be physical, too. Bryan-Podvin says this can look like tightness in your chest, difficulty breathing, and sweaty palms, among other physical symptoms.
Knowing your triggers, acknowledging the anxiety, and noting your physical response to money can help you dial it down, just like you would with any other difficult emotion. Another important thing to note: Anyone can experience financial anxiety. "You don't cure it by having a certain number in the bank or certain income. You cope with it by dialing down those nervous thoughts and feelings and behaviors and dialing up the support and education so you can have a healthy relationship with money," says Bryan-Podvin.
Stop trying to be perfect with your money
Bryan-Podvin says one of the main behaviors she sees associated with financial anxiety is perfectionism. Telling yourself you're bad with money any time you make a mistake contributes to financial anxiety. "We aren't really taught the importance of financial or emotional resilience," explains Bryan-Podvin. "If we mess up our budget, we have a tendency of saying, 'Oh, I'm just not good at budgeting' instead of, 'Maybe I was a little ambitious in thinking I could cut down my dining-out expenses; maybe I could give myself more grace next month.'"
Realizing that nobody is perfect with their money and that mistakes happen can help you navigate your finances better. "Stop and realize it happens to everybody. It even happens to me, as a financial educator," says Rapley. "Then, figure out your course of action."
This could be giving yourself some wiggle room and setting a more realistic budget, or moving some money around. The good news is, if you make a mistake with your money, there is almost always a way to solve it. "There are very few financial scenarios where there is not a solution for it," says Rapley. "There is always something you can do about it."
Get to know your finances
Another way financial anxiety shows up is through procrastination caused by not knowing where to start—and just being too overwhelmed by your money to confront it. But getting real about your financial situation can really help calm some of your worries.
Tara Unverzagt, financial therapist and president of California-based South Bay Financial Partners, recommends sitting down with your money at least once a week. She suggests looking at your credit card accounts once or twice a week to make sure you know what the charges are. Doing this will remind you of any recurring charges like subscriptions services you may no longer use that are still charging you every month.
"If you're a couple, we really recommend having a money date. Pour a glass of wine, put on nice music, and look at your finances. Make it something you look forward to, even though it might not be your most favorite thing to talk about," suggests Unverzagt.
She also says having anxiety about your finances is not necessarily a bad thing. "That's your brain telling you there is something that you need to pay attention to. Your brain is telling you that you should be looking at this, and by not looking at it you're basically just stressing yourself out."
Most worries about money are because of the unknown. Having a true picture of your finances will make you feel more confident about your money so you know what you can spend it on and when you should save. "When you address your finances, you know the situation you're in, and you know what your options are. And that gives you more clarity on how to move forward," says Rapley.
Unverzagt says she has her clients think about what they would do in case of unexpected financial setbacks. Knowing you have a plan in case of a money emergency will give you some peace of mind.
Another thing you can do is preplan your budget before you go out to spend. If you know you're going to go out to dinner with some friends, plan your budget before instead of trying to decide in the moment, which can be stressful. "When you are in a high-anxiety mode, your decision-making process narrows. You don't really see all the choices that you have, so you end up making bad financial decisions," says Unverzagt.
Another step? Making wiser purchases and thinking about where you are investing your money. "What is the long-term play for this?" Rapley suggests you ask yourself. "Is this going to allow my money to grow? Is this going to allow my money to work for me? Asking yourself that is a really helpful tool in ensuring that you are using your money wisely."
Find the right resources to help you with your finances. There are tons of apps, podcasts, coaches, and blogs out there, and it can be hard to pick just one. Rapley's advice is to use multiple tools, and choose the one(s) that resonate best with you and fit your learning style.
Therapy is another great way to ease your financial anxiety and explore some of the messages you may have internalized about money. "A therapist can help you to find the words and the ways in which you can talk about money in a calm and collaborative way. If you try to do things on your own and cannot stick to them or are having trouble getting started, then a therapist could be a great idea," says Bryan-Podvin.
Financial anxiety, just like other forms of anxiety, is real and more common than you think. Facing your money, getting comfortable having candid conversations with friends or romantic partners, and seeking therapy are all ways to remind yourself that you are not alone—and to get the support you need. Take small steps weekly or monthly to build better money habits.