Fighting Financial Anxiety and Tips To Recover
Money and worry seem to go hand-in-hand. While the occasional financial concern is normal and expected, the chronic panic over bills and finances is problematic. Too much concern can result in sleepless nights and cognitive impairment.
Losing your job or experiencing unexpected expenses is enough to stress anyone out. Still, the goal must be to manage these crises and avoid obsession over money or a lack of it. Obsession and anxiety cloud judgment and critical thinking, making challenging situations worse.
Do not allow yourself to succumb to money anxiety. Focus on developing the necessary skills and habits to manage your money effectively and strategically.
Understanding and Diagnosing Financial Anxiety
When underwater financially, it can seem challenging to pinpoint your emotions. Many people fall into a depression where they feel like they lack emotions, but in most instances, their brains are in survival mode, limiting access to more emotional portions of the brain, especially those dealing with logic and reasoning.
According to the Consumer Financial Protection Bureau, a person is in a state of high financial stress if they feel:
- Ill-equipped for financial emergencies
- No confidence about the future
- Incapable of enjoying living in the moment
- Incapable of managing their finances
While dealing with financial stress is challenging and can feel overwhelming, you can incorporate strategies to relieve monetary burdens, build confidence over time, and reduce the risks of future anxiety. However, no process will accomplish immediate results; they all require practice and patience.
Implementing Strategies for Financial Success
In the short term, you should look to professionals for guidance or coping strategies. Depending on the severity of your anxiety, you might want to talk to a medical professional or seek treatment from a psychologist or psychiatrist. Additionally, while implementing the following strategies, focus on the smaller picture, those things you can control. There are four techniques and tools to re-establish financial control and reduce or eliminate anxiety.
1. Make Plans and Set Goals
Many people fall into financial trouble because they make purchases they are not ready to make. Instead of buying a car outright or taking a vacation on a whim, you need to plan and set aside money over time. Too many people use credit cards or other high-interest loans to pay for things that can wait. Make plans, and set goals. Limit spontaneous spending.
2. Develop an Emergency Fund
The best way to prevent future financial anxiety is to establish an emergency fund. Unfortunately, an emergency fund takes time to build. According to many experts, a fund should make up anywhere from three to six months of your regular monthly income. Having an adequate fund can reduce anxiety or stress when unexpected expenses or circumstances arise.
3. Track Earnings and Debt Obligations
Do you know your debt obligations? If you do not know where your money goes every month, it is time to create a budget. Record your regular monthly income and the bills you pay. After obligations, how much money is left? Any leftovers should go toward savings and wants.
4. Record Spending Habits
Many people find they have a problem spending their "free" cash — money not tied to any debt or responsibilities. It is easy to lose sight of spending when you do not record your purchases. Make a habit of recording all transactions, regardless of size, because even those $2 snacks or $5 beverages add up.
Financial anxiety is real but controllable. With the right process, anyone can find their way back to solvency. What techniques do you recommend to fight financial stress? Comment below.