Episode #36: How To Overcome Financial Anxiety
today I wanted to touch on something I myself just recently learned a lot about from a tiktok video I made that went viral. This video was just supposed to be a silly commentary about how most of us don’t receive any form of financial education and then we’re just supposed to know all this stuff as soon as we step out into the adult world on our own. But it struck a chord with so many people, AND it also exposed me to a completely different point of view on talking about finances with your parents. Of course lots of people agreed with the video that they were shut down at home anytime they tried to ask about money and subsequently didn’t have the opportunity to learn about their finances and now experience financial anxiety, BUT a whole other group of people commented that their parents talked about money too much and expressed their fears about debts and overspending and lack of income to their kids so that those kids now feel a crippling anxiety around money that they feel that wouldn’t have if their parents hadn’t burdened the with this information.
SO, for today’s episode I thought it would be helpful to talk about how to work on overcoming your financial anxieties. Whether you feel them come from not learning enough about your finances, to hearing too much fear based messaging around finances, I did a lot of research and it turn out the top 3 recommended techniques for dealing with financial anxiety are almost always the same no matter what the source of your anxieties are. So, if you feel a sense of fear, or worry, or distrust every time you think about your financial situation, stick around for 3 methods to start tackling your financial anxiety head on and taking back your power over your money.
Financial anxiety is a completely normal feeling to have, and basically every single person will feel some form of this over the course of their lives BUT it’s not something you need to be living with day in and day out, all day every day. So if this feels like you, no matter where your financial fears are coming from, there are ways that you can work on addressing them and dealing with them.
Tip #1 To Reduce Financial Anxiety: Schedule in regular times to review your finances.
Chances are you currently look at your finances more often when you’re feeling stressed about something. Whether that’s seeing if you have enough money in your spending account to buy something, if you’ve maxed out your visa card, if you’re worries about how a stock market correction has affected your accounts. If you’re only looking at your financial situation when you’re forced to due to some financial stressors then you’re going to be reinforcing this feeling of anxiety every time you have to look at, talk about, or make decisions around your money.
The best way to change this damaging habit is to set aside time in your calendar to regularly review your finances. Choose a time that works for you, when you can take the necessary amount of time and review everything calmly and logically. I recommend reviewing your finances at least once a month, or more often if you need to. The key here is to schedule that time in for yourself. That time is sacred, and that time should be calm and collected, so try not to make it coincide with the last day of your payday cycle when you consistently feel low on funds or anything like that.
When you review your finances there are some basic steps you want to take, if you want to learn this in more detail make sure you go check out episode #20 all about how to manage your finances monthly in 7 easy steps . To give you a quick recap, the basic things you want to take care of are:
- Making sure the money your were expecting to be paid has in fact all made it’s way into your bank account
- Tracking your spending and expenses that month to make sure you’re on track
-Reviewing your credit card and bank statements to make sure there are no accidental or double charges on there
-Paying your credit card bills off, as well as any other bills and expenses like rent or mortgage payments that you need to make each month
-Making sure that your automatic transfers to things like your savings accounts are still working properly.
Creating the habit of consciously reviewing your finances with the mindset of being pro-active and can-do about it all will do wonders to improve how you feel when you think about your money. It will also start to help make your money make more sense to you, which is where a lot of people’s fears stem from.
The first time you review your finances like this it’ll probably still feel scary, maybe you’ll discover some things you’d rather not, but after a few months of actively practicing this you’ll start to get a good understanding if your income to expense ratio meaning how much you make and most importantly how much you spend, and from there you start to take back your power to make conscious spending decisions which will also help reduce your fear about money because you know exactly what you should be spending and exactly how much you have to spend on different items.
Tip #2 To Reduce Your Financial Anxiety: Work on Improving Your Relationship With Money.
I’m talking money mindset work, this is one of the few times you’ll actually see me talk about and recommend money mindset work. There are times when it is valuable to work on improving your mindset, I just feel like it really needs to be made clear that money mindset work can help but you NEED to pair it with learning financial management skills and being diligent about your finances. You can’t get better at money just by making a vision board and repeating mantras to yourself. BUT, if you’re experiencing financial anxiety, that’s rooted somewhere in your psyche and there are things you can do to address that and to do the work to change your mindset around it.
Maybe your fears are based in not knowing enough and feeling out of control, maybe they stem from a sense of lack instilled in your childhood, maybe money always means fighting with your partner to you so it makes you anxious, whatever it is, doing money mindset work will help.
There are loads of people teaching money mindset work out there. I would advise being careful about who you work with if you want to go this route though, and stay away from anyone who promises results without talking about how you can learn to actually handle and manage money. If you’re just looking to dip your toes in the water then there are a lot of great books on this topic too. I’ve read a number of them as research, and my favourite one so far is ‘You Are A Badass At Making Money’ by Jen Sincero.
You can probably start by learning this yourself then if you’re still having trouble you can source out a real personal educator or counselor on this topic. You’re going to have to do the work, even if it seems a little ‘woo woo’ to you, which, hey, me too to be honest, but committing to getting a better understanding of why you feel the way you do and how you can work on fixing that feeling, is going to help you move slowly out of the cycle of financial anxiety if you’re also following these other two active financial management tips.
Tip #3 To Reduce Financial Anxiety: Create an Emergency Fund.
Creating an emergency fund for yourself will start to help you feel more secure in your finances no matter where your anxiety is coming from. To give you a quick overview, an emergency fund is a financial safety net that you can create for yourself in the form of a set amount of liquid cash that you keep available to yourself in a separate bank account that you can access, but not be tempted by on a daily basis.
Having an emergency fund is one of the best ways to reshape your relationship with money because it helps you get out of that mode of fear of lack AND it creates a level of freedom and autonomy for you individually so you’re never stuck in a situation because of money. Getting yourself out of that place of fear when it comes to money will improve your cognitive function. Your logic and decision making skills around your finances will likely improve once you’re no longer motivated by fear. Whether this helps you break out of the paycheck to paycheck cycle, gets you out of a bad situation whether that’s a personal relationship or a work relationship, or allows you to let go of one of your side gigs and take a risk starting your own business, an emergency fund is a must-have for everyone and will especially benefit you if you’re struggling with financial anxiety.
So, hopefully after listening all the way through this episode you’re feeling motivated and can-do about changing your relationship around money and your financial situation. If you’ve been struggling with anxieties around money for what feels like forever, I want you to take away from this that there are ways to mitigate this fear and this feeling for yourself because you don’t always have to feel like puking when you think about your bank account or credit card bill.
- First, you want to create a financial management routine for yourself to stop the habit of only looking at your bank account when you’re stressed as well as to gain control over what you know comes into your bank account and what goes out.
-Second there are ways that you can work on improving your relationship with money through money mindset work and practices. Don’t fall into the trap of only using money mindset work to try and improve your financial situation, but it can be a useful skill to add to your tool box.
-Third, build an emergency fund for yourself. I truly believe that every single adult should have their own emergency fund themselves, not just some extra cash in your joint bank account, but a slush fund that will give you power and autonomy over your own life and financial situation. Once you’ve achieved your emergency fund goal you’re actually going to be amazed by how the way you feel about your money changes almost overnight.
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