None of us are immune to anxiety about money, and money plays a crucial role in all our lives, so financial anxiety is understandable.
However, you might find that you're feeling stressed about money more often than not or that you're struggling to cope with financial stress. If so, you may have "money anxiety disorder."
The term isn't a medical diagnosis; and instead, it's a phrase that describes the complicated relationship some people have with their financial situation.
Thankfully, there are things you can do to stop your stress and anxiety from spiralling out of control. This guide will tell you what to do when you're suffering from money anxiety.
Let’s get to the most common frequently asked questions:
Financial stress is one of the primary sources of stress for Australians, and there are plenty of reasons why money concerns are so acute. Chief among them is that money can either provide security or instability, depending on how your bank statement looks.
If you don’t have much, spending money becomes a fraught activity, which can lead to negative beliefs about money, which can cause more money stress.
Other causes of stress about money include rising living costs and job insecurity. Not having a financial plan can also increase anxiety. If you’re already worried about your finances, not being prepared for the future can worsen stress.
Note: All of these issues could potentially lead to so-called money anxiety disorder. Below you’ll find out more about what that means and how to manage it.
Money anxiety disorder is typically a sign of poor financial health. You might, for example, have debts piling up and bad credit to boot. Or, a bad situation occurring, for example, a job loss could trigger your anxiety.
Whatever the reason, there are a lot of us in the same boat. According to a recent report from the Melbourne Institute, a third of Australians are just about making ends meet.
Financial stress can lead to constant worrying and compulsive buying and could even impact your relationships. When that happens, dealing with financial stress becomes a mental health issue.
The unhealthy coping mechanisms people use to manage money anxiety can sometimes impact their physical health, and they can even leave people feeling suicidal. Thankfully, there are steps you can take to stop that from happening.
This guide will prevent things like day-to-day spending or monthly auto insurance payments from becoming a danger to your wellbeing.
Money anxiety disorder most often occurs when you’re having financial difficulties.
And, it’s worth remembering that worries about your personal finance can mount regardless of your level of wealth. Here are some of the ways those concerns can manifest.
Worrying about money can cause people to start lying, including lying about spending or taking on more debt. Also known as financial infidelity, it is a symptom often seen in alcohol and drug users.
But, lying to your partner or family about your finances won’t help keep stress levels down. Eventually, it will only make matters worse.
When you find yourself tiptoeing around the truth when it comes to money, it’s probably a sign you need to do something.
When you lie to your loved ones about financial issues, chances are you’ll end up arguing about it, too. If the stress impacts your relationships, it will make a difficult time even harder to deal with the situation.
People feeling worried about their financial future might end up hoarding any items they buy. The stress of money management makes them feel like their own objects can provide a sense of security.
So, ask yourself the following questions:
Important: If the answer to either of these questions is “yes,” you likely have an unhealthy relationship with money.
If you ever spend time agonising over money worries, you’re probably keen to avoid doing so again. The following five practical tips will help you stop stressing and improve your money management.
Here’s how to avoid being stressed about money or letting that stress overwhelm you.
A monthly budget is a key to financial wellness. And, it’s an excellent way to cope with stress about money as it gives you an insight into how you’ll manage over the coming weeks.
You’re also more likely to meet financial goals with a budget, and this could include investing in real estate or saving for retirement accounts.
So, start listing your monthly outgoings, such as your pet insurance, disability insurance, or life insurance bills. You should also include regular repayments for student loans, credit card debt, and other debts.
Subtract the cost of all these essential expenses to see what you have left in your bank account. You might need to use a payoff calculator to do so.
Note: Whatever you have leftover should then be allocated to things like food shopping, entertainment, and clothes. That way, you’ll always know that you’re spending within your means.
Managing debt is an excellent way of dealing with financial anxiety. You see, you’re more likely to feel stress and experience financial worries if you have unpaid debts.
However, if you need the extra cash, consider a balance transfer credit card. These credit cards can offer you a period of interest-free spending, which could be the buffer you need to improve your financial situation.
Once you’ve paid off your outstanding debt, you can start to set aside money each month for your savings.
You should see your savings as an emergency fund. That way, if you unexpectedly require something like car repair, you won’t be left out of pocket.
When you build an emergency fund, you should aim to save six months worth of living expenses as this will help you deal with stress by giving you a safety net for when things go wrong.
Note: If you struggle to save, see if you can set up automatic savings through your bank.
Just as setting aside money can tame money anxiety, so can speaking to your partner. Chances are, your credit card bill and spending habits affect them, too. So, let them know you’re struggling and build a support system.
Talking to trusted friends can also help with reducing stress. They might have some of their advice for coping with financial stress.
If your money problems are lousy, then the above tips might not cut it. In that case, you should reach out to a financial advisor or seek financial counselling.
Getting support will show you that there is a light at the end of the tunnel. It will help you see that you’re not alone and that it is possible to get your finances back in order.
Important: Professional help is often a lifeline for people experiencing financial hardship, particularly those struggling with money anxiety disorder.
It’s essential to deal with financial difficulty sooner rather than later. If you don’t, your money troubles could quickly get out of hand and start to impact your mental and physical health.
Think of this guide as a first step towards understanding financial stress. Then, seek out resources that make managing money much more manageable.
WeMoney will help you stop feeling anxious about your finances. And, not only that, but we can help you make strides towards your long-term financial targets, too.
Whether you want to pull yourself out of debt, save for retirement, or save money for a house, WeMoney can help.
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Disclaimer: The author is not a financial advisor and the information provided is general in nature and was prepared for information purposes only. This article should not be considered to constitute financial advice. Accordingly, reliance should not be placed on this article as the basis for making an investment, financial or other decision. This information does not take into account your investment objectives, particular needs, or financial situation.