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Wealth Wellness: Understanding Financial Anxiety

Updated: Jan 19

Does thinking about money make you want to put your head in the sand? Or maybe hide under your desk (aka the kitchen table)? 


woman hiding her face with her hands

You’re not alone.


To support the fact that you’re not alone, the American Psychological Association’s 2022 Stress in America survey noted that 65% of people surveyed were stressed about money. 


Society may assume that hitting a certain income milestone (e.g., $100k) means all your financial woes melt away. Reality shows us that financial anxiety is prevalent across the board. Yes, everyone worries about money from time to time–even billionaires. That may sound ridiculous, but it’s true. So, if you have an occasional thought that gives you pause, there's no need to overanalyze that; it’s normal. If there’s more to the story, keep reading.


[Note: If you have severe anxiety that is harming your work, relationships, or financial responsibilities, please seek professional help from a physician, psychiatrist, or therapist.]


What is Financial Anxiety?

Nailing down one perfect definition of financial (or money) anxiety is a harder task than it may seem, but here’s a collection of some of the descriptors that made the most sense to me.


Financial anxiety might show up as:


It boils down to whether or not your finances are having a negative impact on your life.


Common Causes of Financial Stress

  • Feeling like you don’t have enough money

  • Not understanding where your money is going

  • Math anxiety

  • Feeling unprepared

  • Not understanding financial terms or numbers


Typical Coping Mechanism

The most common reaction to financial stress is avoidance. If you can’t see your finances, it’s impossible to feel bad about them, right?! That’s a sabotaging thought. That small voice telling you… “Just don’t look; if you do look, negative feelings will follow.”


But let’s get into our Sage mind for a moment. Our Sage mind is where we take clear and loving action. 


When we avoid things, it causes the stress to compound. It’s a vicious cycle that will gladly continue to repeat itself until we step in with action. So, our Sage mind would say… “What’s the smallest action you can take today to break the cycle?”


chain breaking in half

We’ll talk about small steps you can take in a bit. So stay tuned.


The Toll of Financial Anxiety

Here’s a robust list of symptoms from Choosing Therapy:

  • Sleep disturbances: difficulty falling asleep, staying asleep, or insomnia due to anxiety over money.

  • Appetite disturbances: lack of appetite or overeating in response to money anxiety.

  • Somatic complaints: muscle tension, tightness in the jaw, gastrointestinal problems, headaches, migraines, aches and pains.

  • Scarcity mindset: a negative perspective focused on lack of and competition over resources like money, food, and jobs. It can also involve closed-mindedness. For example, people who continually say, “That’s not going to work” or “Nothing will help.”

  • Rumination: excessive second-guessing about past decisions, choices, or actions. For example, asking, “If I stayed in that relationship, would I be better off financially?”

  • Avoidance behaviors: not opening bills or looking at account balances because you don’t want to deal with your financial reality and the associated negative emotions.

  • Panic: fear, feeling overwhelmed, panic attacks, a sense of wanting to flee from your situation.

  • Obsessive-compulsive behaviors: obsessing about finances (balances or upcoming bills) and checking behaviors (financial accounts, financial news, stocks, etc.)

  • Social isolation: resulting from shame of financial stress, as well as not wanting to spend money to go out due to money anxiety.

  • Analysis paralysis: feeling frozen when making even simple financial decisions (such as grocery purchases) as you endlessly weigh the pros and cons.

  • Reactive financial decisions: dramatically cutting expenses, miserly behavior, and selling treasured possessions in response to money anxiety disorder.

  • Depression: hopelessness, low mood, suicidal thoughts and feelings.

  • Low self-esteem: low feelings of worth and deservingness and feelings of inadequacy.

  • Difficult feelings: shame, anger, fear, grief, sadness, loss of control, regret, guilt, and more.

  • Poor work-life balance: inability to rest, overwork, and burnout.


Identifying From Where the Anxiety Stems

When we broad-label money stress, we assume anything involving money is the culprit. But that is rarely the case. When you can pinpoint the heart of the matter, it’s easier to find the first step forward. 


Make a note of how you feel when reading these statements:

  • I know the current balance of my checking account

  • I will be reviewing my credit card statements today

  • I have a plan in place to pay down my debt

  • I know how much money I have coming in each month

  • I know how much money I have going out each month

  • My retirement plan is on track, and I feel secure about my future


If you felt a twinge of any emotion other than happiness, joy, or excitement (you get the picture), there could be some financial stress in that area.


Finding the First Step to Take

In this Million Stories article, I love their first-step recommendation. “First, make a plan for when acute anxiety kicks in.”


If you feel emotions when opening your checking account, what plan can you have in place when you’re ready to log in? Maybe you take a few deep breaths before opening your laptop, meditate for a few minutes after you type in the bank’s URL, or set a timer for 2-3 minutes to log off once the timer stops.


woman with her head back taking a deep breath

By handling that initial twinge of angst, you’ve already begun to break that pattern!


Now, it’s time to think through the smallest action you can take based on your specific area of concern. 


Example One: If you don’t know how much money you have coming in each month, a small action can be to look back at last month and document each inflow in a notebook or a spreadsheet. 


Example Two: If you don’t feel secure about your retirement savings, consider calculating how much you’d like to have saved using the 25x rule. If you’d like $100,000/year in retirement, take that and multiply by 25. 100,000 x 25= 2.5 Million

[Note: This is a retirement savings rule of thumb and not official retirement savings advice. If you are looking for specific advice catered to you, I recommend reaching out to a Certified Financial Planner.]


Building a Healthier Relationship with Money

When we are anxious about money, our relationship with it isn’t healthy. Like all relationships, a little effort can go a long way. One of my ultimate favorite tips comes from Ken Honda, author of Happy Money. 

Thank Your Money. 


We thank our money as it comes in & as it goes out. This is a two-way street. 


The Bottom Line

Financial anxiety is common but conquerable by identifying when those feelings arise, making a plan, committing to small actions, and fostering a healthy relationship with money.


You Don’t Have to do it Alone

If you are struggling to figure out the best place to begin, there are many financial professionals, such as myself, who are trained in financial plan development. We’re only one email away. If you’d like to learn more about the services I provide as an Accredited Financial Counselor® or would like recommendations to a Financial Therapist, you can book a 15-minute chat here.  


Here's to you,

Melissa Mittelstaedt

Money Coach | Accredited Financial Counselor®

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