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When it comes to managing our money, we regularly face many stressors – like coping with a surprise car repair and medical bills, budgeting our paychecks to keep up with inflated prices grocery stores.
But financial anxiety isn’t just about worrying about how much money we have in the bank. Anxiety about our finances can manifest itself in all sorts of ways, and in some cases, it can lead to health issues like high blood pressure. Sometimes it can even become debilitating to the point that it’s hard to get through our day when it comes to our money.
If you think you may be feeling more stressed than usual about your finances, this article may be helpful. Below, we define different examples of financial anxiety and how it can manifest itself, then explain how you can suppress it.
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What is Financial Anxiety?
“Financial anxiety is more than just a general worry about your money or checking your budget,” says Corbin Blackwell, CFP at Betterment. “It’s a deeper, more generalized anxiety about obsessing over your finances and how everything in your life affects it, and also feeling like a failure because of where you are. “
While worrying about not having enough money is an example of financial anxiety, Blackwell wants us to know that’s not the only case where it happens. Financial anxiety can also occur when you obsess over saving every dollar, become hyper-aware of where your money is going, or imagine situations where you lose all your money. All of these examples involving your finances can cause discomfort or worry that keeps you up at night or disrupts your daily life.
What causes financial anxiety?
According to Blackwell, many triggers can cause financial anxiety. Some currents include a potential job loss, money missteps, a lack of personal finance education, or your childhood beliefs about money.
“There’s so much research on how your family unit presents your relationship with money to you, so it can definitely be a trigger for how people relate to money,” Blackwell says.
For example, if you grew up watching your parents struggle with money or go into more debt to pay for basic expenses, you may have entered adulthood with a fear of debt. Or, unexpected expenses and paying for big-ticket items can make you feel hypervigilant about spending because you worry you won’t have enough to cover other costs.
On top of that, it’s also common to experience high levels of financial stress related to your income, especially as the cost of living keeps rising.
“Things are usually very expensive, so it can be stressful to think about how much you’re earning versus the cost of living, especially in cities,” says Blackwell. “Many things that people considered ‘essentials’ are expensive and figuring out how to pay for them can cause a lot of stress.”
How to curb financial anxiety?
To start reducing your financial anxiety, first identify what is causing your stress. Here are three examples of things that cause financial anxiety and ways to fix them.
Cause: Lack of personal finance education
If much of your anxiety stems from not having learned financial literacy, your first step is to educate yourself – and know that you are certainly not alone. Personal finance education courses are often excluded from our schooling and are not a requirement until high school, though that depends on what state you live in.
Blackwell suggests that those in this common scenario start learning the fundamentals of things like budgeting and saving for the future so they can feel a little more in control. Today, there are tons of free resources you can tap into to learn more about money management, whether through books, podcasts, newsletters, or online articles.
Money Confidential, a podcast hosted by Real Simple, covers some common questions that people just starting out on their financial journey often need answers to. So Money, another podcast hosted by financial expert Farnoosh Torabi, spends a lot of time on a variety of topics — like how to make more money, when housing prices will drop, and how to build a strong investment portfolio. The show host also chats with experts in the field who can offer answers to all of these questions and more.
But if you’re not a big podcast listener and prefer to read, Ramit Sethi’s “I Will Teach You To Be Rich” and Napoleon Hill’s “Think and Grow Rich” are two Amazon bestsellers for kids. personal finances.
Plus, Select regularly talks with experts about their tips for beginners looking to create a budget, learn the ins and outs of investing, pay off debt, and more.
Cause: a money misstep
If your financial anxiety stems from a money mistake you made, try to avoid dwelling on what has already been done and instead wait to fix it.
“The first step is not to beat yourself up,” says Blackwell. “Don’t dwell on the past, because being angry about how much you spent on your credit card last month, for example, won’t get you out of debt any faster.”
Your next step, in this example, may be opening a balance transfer credit card which can buy you time to pay off your credit card balance without accruing additional and costly interest. The Citi® Diamond Preferred® Card, for example, is a credit card that lets you make payments on your transferred credit card balance for an initial APR of 21 months without interest (after, 13.74% at 23.74% Variable APR) from the date of the first transfer.
That’s almost two years of a 0% APR introductory period on balance transfers; just make sure you have a plan to pay off your balance within that time frame so you don’t start earning interest once the 21 months are up. All transfers must be completed within the first 4 months and there is a balance transfer fee of $5 or 5% of the transfer amount, whichever is greater.
Cause: your childhood beliefs about money
Sometimes it’s not so easy at first to see how our financial habits and values today are the result of how we were brought up to think about money. But if you’re not sure what caused your financial anxiety, it’s worth taking a trip down memory lane to see how your childhood played a role in how you handle your finances today.
If you discover that your “financial education” may be the reason you’re hyper-aware of getting into debt, for example, Blackwell recommends focusing on building an emergency fund. With an emergency fund, you can relax a little knowing you have a cash safety net to rely on.
Consider opening a high-yield savings account — like the Ally Online Savings Account or the Marcus by Goldman Sachs Online Savings Account — for your emergency fund needs. This way you can earn slightly higher interest and grow your balance a little faster.
At the end of the line
If you’re feeling anxious about your finances, take the time to identify what may be causing it so you can feel more in control of how to help yourself.
And don’t forget that there are always professionals, like financial advisers, who can help you manage your money so that you are never alone. The most famous Credit counseling organizations are non-profit organizations and you can take advantage of their programs for free or at an affordable flat rate. You won’t pay high fees to meet with one like you would with a financial advisor.
To get started, find an accredited counseling organization in your area on the Financial Counseling Association of America (FCAA) website or by phone at (800) 450-1794. You can also search the National Foundation for Credit Counseling (NFCC) website or call (800) 388-2227.
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Editorial note: Any opinions, analyses, criticisms or recommendations expressed in this article are those of Select’s editorial staff only and have not been reviewed, endorsed or otherwise endorsed by any third party.