How to Cope with Money Anxiety

Just about everyone experiences money anxiety from time to time, whether they’re about how to pay an unexpected bill or — when things are going well financially — how to best invest your money for optimal returns.

While it’s normal to feel some degree of financial anxiety at certain times in life, if you spend a lot of your time worrying about your finances, it could be a sign of money anxiety.

Money anxiety can occur at any level of wealth, and it can have a major impact on your mental and physical health. In some cases, it can have a negative effect on your behavior.

The good news is that money anxiety is treatable with changes to your habits and, if necessary, help from a financial professional and/or licensed mental health provider. 

Below, we’ve explained what money anxiety is, as well as the symptoms you may notice if you experience this common issue.

We’ve also explained what you can do to cope with money anxiety, from simple habits to people you can turn to for trusted, high-quality financial and mental health advice. 

“Money anxiety” is a term that’s used to refer to feelings of stress and worry that are related to your income, savings, investments and other aspects of your financial life. 

Unlike other types of anxiety, money anxiety isn’t a clinically recognized disorder that you’ll find listed in the Diagnostic and Stastistical Manual of Mental Disorders (DSM-5). However, it’s a real, well-known problem that can affect people at different times in life. 

According to the American Psychological Association’s 2020 Stress in America survey, around 64 percent of Americans report feeling stressed about money.

Money anxiety can take different forms. If you feel anxious about something financial, you might notice that you: 

• Feel anxious or depressed about your finances. You might feel like you don’t have enough money, or that you’re falling behind financially. These feelings may occur even when you have enough money to maintain a normal daily life. 

• Worry about debt. If you have a mortgage, student loan or credit card debt, you might spend a lot of your time worrying about it. Things like repayments might dominate your thoughts and affect your wellbeing.

• Obsess about being frugal. Sometimes, anxiety over money can have certain effects on your behavior. You might notice that you’re extremely frugal and unwilling to spend money, even when you can afford to do so.

• Spend money recklessly. On the other hand, you might spend money excessively or on things that you don’t need in order to deal with feelings of anxiety.

• Feel anxious about losing your source of income. You might feel anxious about the prospect of losing your job or having an investment fail. These thoughts might continue even if you’re aware that they’re irrational and/or unlikely.

• Struggle to sleep. Anxiety and stress, including stress about money, may cause you to struggle to fall asleep. Research suggests that people with lower incomes are at risk of developing insomnia.

• Find it difficult to change your financial behavior. If you have financial issues, such as overspending, you might find it difficult to change your behavior and make progress towards improving your financial situation.

• Engage in negative, harmful behaviors. Research suggests that people are more at risk of engaging in negative behaviors, such as excessive alcohol consumption, when they have financial difficulties.

When severe, financial anxiety may cause you to feel stressed. Chronic stress can affect your health in numerous ways. Over the longterm, feeling stressed can increase your risk of:

• Hypertension (high blood pressure)

• Cardiovascular disease

• Acne, eczema and other skin problems

• Depression

• Anxiety

• Obesity

• Diabetes

If you have an existing medical condition, the long-term stress associated with financial worries may make it worse.

Financial anxiety can take a significant toll on your wellbeing. What’s worse is that it may lead to a vicious cycle in which financial issues affect your mental health, making it more difficult for you to manage your money and overcome your financial issues.

Luckily, financial anxiety is something you can successfully deal with through a combination of good money habits and professional help. Learn how, below, with actionable and effective strategies that you can use to improve your finances and your mental health. 

Identify the Sources of Your Financial Stress

One of the most important steps you can take to deal with anxiety around money is to take stock of your current financial situation, as well as your major financial stressors.

Start by making a note of where you are financially. Try to identify the main sources of negative feelings about money in your life. Common sources of financial stress include:

• Non-discretionary expenses, such as rent, mortgage payments, utility bills, groceries, car payments and other things you need to pay.

• Debt. Most people have some amount of debt, whether it’s in the form of a mortgage, a car loan, a student loan or credit card debt. Without a debt pay-off plan, even a modest amount of debt can potentially contribute to stress and anxiety.

• Excessive and/or impulsive spending, such as spending too much of your money on non-essential consumer goods, items on sale or other discretionary or non-discretionary expenses.

• Investments, especially volatile investments that fluctuate in value or involve significant risks. 

You might find that you have several sources of financial stress, all of which are taking a toll on your quality of life and relationship with money. 

Create a Realistic Budget 

Once you’ve identified the key sources of your financial stress, you can make the money side of your life more predictable by preparing a budget.

A budget can help you control your spending. It’s also a great tool for working out where you’ll be financially in the future. Provided you can stick to your budget, you’ll be able to work toward achieving your goals, which may help to provide relief from money-related stress and anxiety. 

The Federal Trade Commission has a simple guide you can use to make a monthly budget and work towards your financial objectives.

Prepare an Emergency Savings Fund

One step you can take to reduce money stress is to prepare an emergency fund: a cash reserve that you keep available for emergencies and unplanned expenses. 

Having an emergency fund can make common issues such as medical bills, home repairs and loss of income less of a shock to your personal finances. Having cash available during difficult times may help to reduce your levels of stress and anxiety.

While opinions differ on the best way to build an emergency fund, most experts suggest setting a clear savings goal, managing your personal cash flow, contributing on a regular basis and, if you experience a sudden influx of cash, taking advantage of the opportunity to save.

The Consumer Financial Protection Bureau has a detailed guide to building an emergency fund that you can use to keep yourself prepared and stop money from being a source of stress.

Track Your Spending

If excessive spending or impulse buying is having a negative impact on your financial health, it may help to keep track of your spending for the next month.

Research shows that people generally underestimate the total amount they spend on infrequent purchases. Over time, these purchases can have a significant impact on the health of your bank balance and your ability to deal with regular living expenses.

Tracking your spending allows you to find out what you’re actually spending your money on and identify opportunities to cut your monthly expenses without affecting your quality of life.

You can keep track of your monthly spending with this free spending tracker from the Consumer Financial Protection Bureau.

Use Mindfulness Meditation to Cope with Stress

When you’re going through tough financial times, it’s easy to let feelings of stress get the better of you. Sometimes, simple relaxation techniques like mindfulness meditation can have a major positive impact on how you feel. 

Mindfulness meditation involves directing your attention to your breath, thoughts and sensations in the present moment, and then accepting them without judgment. Hundreds of studies have found that mindfulness meditation is an effective way to reduce stress, anxiety and depression.

One strength of meditation is that it’s something you can do at home, for free in just a few spare minutes a day. Our guide to meditation for anxiety explains more about how you can use meditation to calm your mind and improve your ability to deal with stress. 

Consider Talking to a Financial Planner

If you feel completely overwhelmed by your finances or unsure of what to do to stay in control of your money, you may want to consider meeting with a financial planner. 

A financial planner can prepare a plan for you to follow to get out of debt or achieve any of your other financial goals. Many financial planners create detailed plans that cover everything from saving to investments, taxes and personal finance planning for retirement.

You can find a financial planner by searching in your area. Look for a financial planner who has reliable credentials, such as Certified Financial Planner (CFP®) or Chartered Financial Analyst (CFA®).

The Securities and Exchange Commission has some helpful tips that you can use when looking for a financial planner or other investment professional.

Seek Help from a Mental Health Provider

If you think you might be depressed or affected by a form of anxiety such as generalized anxiety disorder (GAD), you should reach out to a mental health provider for assistance.

Depression can often develop as a result of sudden changes in your life or stress, both of which can occur with a financial setback. Some risk factors, such as physical illnesses, can increase your risk of becoming depressed or developing an anxiety disorder. 

You can get mental health help by asking your primary care provider for a referral, reaching out to a mental health provider in your city or connecting with a provider from home with our online mental health services.

To help you cope, your mental health provider may recommend making certain changes to your habits and lifestyle, taking part in psychotherapy or, if appropriate, using medication. 

It’s normal to feel anxious sometimes, and financial issues can be a common trigger for anxiety, worry and stress.

However, if you have severe, persistent feelings of anxiety related to debts, your career or your general financial life, it may be a sign that something isn’t right.

Our detailed guide to anxiety goes into more detail about the types, causes and key symptoms of anxiety disorders. It also explains what you can do to stay in control of your feelings and stop anxiety from having a negative impact on your life. 

If you think you might have an anxiety disorder, you can talk with a licensed psychiatry provider from home using our online psychiatry service. 

You can also learn more about dealing with stress, anxiety, depression and other mental health issues with our free mental health resources.