How to Tackle Financial Anxiety: Proven Steps to Calm Money Worries

Admin in Others Jul 21 • 15 min read

Financial anxiety is a very real and common challenge that impacts people from all walks of life.

Money consistently ranks as one of the top stressors in annual surveys by the American Psychological Association (APA), highlighting just how pervasive the issue is. From worrying about inflation and market dips to life changes like marriage, children, or homeownership, financial uncertainty can feel overwhelming. This anxiety stems not from current financial hardships but from the fear of the unknown.

The good news? Financial anxiety doesn’t have to control you. By focusing on building confidence in your ability to face financial uncertainties, you can take proactive steps to reduce fear and worry. Below are practical tips on how to anxiety-proof yourself from financial freak-outs, empowering you to approach your finances with clarity, peace of mind, and control.

Understanding Financial Anxiety: It’s Not About Hardships, It’s About Fear

First, let’s clarify what financial anxiety is. While financial stress is often triggered by real-life issues such as job loss, medical bills, or other hardships, financial anxiety is more anticipatory. It’s the fear of what could happen—the unknowns of future economic downturns, unexpected expenses, or major life changes like buying a home or starting a family. This anxiety is rooted in uncertainty rather than actual financial difficulties.

Women, in particular, often don’t give themselves enough credit for handling financial matters, which can exacerbate this anxiety. Breaking through requires confidence, support, and the right tools.

Tip 1: Find Trusted Sources of Information

Financial anxiety is often fueled by misinformation or conflicting opinions. News headlines about market crashes or recessions can easily make you panic. Instead of getting swept up in fear, arm yourself with reliable information from trusted sources. This could mean seeking advice from accredited financial planners, counselors, or fact-based websites like Investopedia. These sources provide factual, balanced perspectives that help cut through the noise, allowing you to build a solid foundation of knowledge and trust in your financial decisions.

Additionally, a good therapist can also be invaluable in addressing the emotional side of financial anxiety, especially those who specialize in the relationship between money and mental health.

Tip 2: Focus on What You Can Control

One of the most effective ways to overcome financial anxiety is to focus on the aspects of your finances that you can control. While you can’t predict inflation rates or stock market swings, you can control your spending, savings, and budgeting habits.

Start by tracking your spending and reviewing your finances regularly. Creating a budget and savings plan gives you a clear, tangible roadmap to follow, which helps alleviate feelings of helplessness. Rather than stressing over macroeconomic factors, focus on your personal financial goals—whether that’s building an emergency fund, saving for a vacation, or paying down debt.

Tip 3: Start Money Journaling

Money journaling can be a powerful tool for combating financial anxiety. By tracking your spending, feelings, and goals in a journal, you can identify patterns that may be triggering your anxiety. Perhaps you notice that you feel more anxious after checking social media and seeing friends make big purchases, or maybe you experience stress around bill payment deadlines.

Write down what you’re proud of in your financial decisions as well. Celebrating your small wins, like saving money on groceries or paying off a small credit card balance, can go a long way in building confidence.

Tip 4: Create Speed Bumps for Impulsive Spending

Impulse spending is a common pitfall, especially in moments of financial anxiety. A quick online purchase may provide a temporary sense of relief, but it often leads to guilt and stress later. To curb these impulses, create “speed bumps” that make you pause before spending.

For example, set up credit card alerts that notify you when your balance reaches a certain amount. Practice mindfulness exercises before purchasing non-essential items, asking yourself, “Do I really need this, or am I buying it to soothe anxiety?” This moment of reflection can make all the difference.

Tip 5: Customize a Reassuring Money Mantra

Anxiety can be a noisy, repetitive voice in your head telling you that you’re not doing enough or that disaster is around the corner. To quiet that voice, try creating a personalized money mantra—something simple and reassuring you can repeat when you start to feel overwhelmed.

For example, “I have control over my financial choices” or “I am taking steps to secure my financial future” can serve as positive affirmations during anxious moments. This mantra can act as a mental anchor, keeping you grounded when uncertainty starts to creep in.

Seeking Help: Financial and Mental Wellbeing Go Hand-in-Hand

Financial anxiety isn’t something you have to face alone. Professional help is available, and often more accessible than you might think. Accredited financial planners can provide you with clear strategies to manage your finances, while mental health counselors or therapists can help you navigate the emotional aspects of money management. Many counselors now specialize in the intersection of finance and mental health, offering valuable insights and support.

If you’re concerned about costs, remember that pro bono options are often available through nonprofit organizations or financial planning associations. Seeking help is a sign of strength, not weakness, and can be the first step toward feeling more in control of your financial life.

Avoiding Common Budgeting Mistakes

While budgeting is an essential tool for financial control, it’s important to avoid common pitfalls that can lead to unnecessary stress. Let’s explore some budgeting mistakes that people often make and how to correct them.

Mistake 1: Not Budgeting for All Expenses

It’s easy to forget about smaller recurring bills or one-time costs, like birthday gifts or car repairs. These little expenses can add up quickly, causing you to go over budget. To avoid this, make sure your budget accounts for all potential costs, no matter how small.

Mistake 2: Living Paycheck to Paycheck

Living without a financial buffer is one of the biggest contributors to financial anxiety. Having even a small emergency fund set aside for unexpected expenses can provide peace of mind. Aim to save at least three to six months' worth of living expenses for emergencies.

Mistake 3: Failing to Track Spending

You can’t improve what you don’t track. If you’re not monitoring where your money is going each month, it’s hard to create an effective budget. Make it a habit to track every purchase, whether by using a budgeting app or writing down expenses manually.

Mistake 4: Creating Unrealistic Budgets

Setting unrealistic expectations for your spending or savings can set you up for failure. Be honest about your true expenses, and give yourself some breathing room. It’s better to create a flexible, attainable budget than to restrict yourself too tightly, only to overspend later.

Mistake 5: Not Accounting for Lifestyle Inflation

As your income increases, it can be tempting to spend more. However, failing to account for lifestyle inflation can sabotage long-term savings goals. Be mindful of lifestyle changes that lead to higher spending and consider sticking to your previous spending habits as much as possible.

Mistake 6: Not Adjusting for Seasonality

Some expenses, like utilities, fluctuate with the seasons. Failing to account for these variable costs can cause budget shortfalls. To prevent this, adjust your budget for seasonal changes by setting aside extra money for higher utility bills in winter or summer.

Mistake 7: Not Involving Your Partner

If you share finances with a partner, it’s crucial to involve them in budgeting discussions. Joint financial cooperation not only helps with budgeting but also prevents conflicts down the road. Open communication is key to aligning financial goals.

Mistake 8: Ignoring Debt Payments

Debt can quickly eat into your disposable income if not properly accounted for in your budget. Prioritize debt payments alongside regular expenses to ensure you’re paying down balances consistently.

Mistake 9: Not Having a Savings Plan

Savings should not be an afterthought. Automate your savings contributions so that a portion of your income goes directly toward your short-term and long-term goals. This can help you build financial security without having to think about it.

Mistake 10: Being Inflexible

Life happens, and your budget needs to reflect that. Being overly rigid with your financial plan can lead to frustration when unexpected expenses arise. Review and adjust your budget monthly based on actual cash flow and expenses.

Mistake 11: No Reviews or Updates

Your budget is a living document and should evolve with your changing financial circumstances. Set aside time regularly to review and tweak your budget to ensure it continues to serve your goals effectively.

Confidence is Key to Overcoming Financial Anxiety

In summary, the best way to overcome financial anxiety is to face your worries head-on with trusted sources, sound financial strategies, and a focus on what you can control. By tracking your spending, setting tangible goals, and creating a personalized approach to managing your money, you can reduce the stress and uncertainty that fuel financial freak-outs.

Seek help when needed, whether from financial professionals or mental health experts. Above all, remember that confidence is key—when you trust yourself to make informed decisions, the fear of the unknown starts to fade. With the right tools, mindset, and support, you can anxiety-proof yourself from financial stress and start living with greater peace of mind.