Have you ever sat there, staring at your bills, and just felt utterly overwhelmed and stressed out, even though you know you have plenty of money in the bank to pay them?
Or perhaps you feel incredibly guilty for spending money on anything “extra” that you don’t absolutely need to survive because your parents taught you to save every last penny.
Maybe you even avoid looking at your bank and credit card statements because doing so makes you feel sick, regardless of how good or bad your financial situation may be.
All of these are indicators of financial anxiety.
This is a problem lots of people, mostly women, suffer from. And many of them are people who have plenty of money, more than enough to cover all of their expenses. In fact, one of the biggest myths about financial anxiety is that it only affects people who don’t have enough money. But more often than not, the exact opposite is true.
And the real problem with financial anxiety is that it can trap you in unhealthy patterns that harm your financial security, if you don’t address them.
Financial Anxiety Traps So Many People
Full disclosure, I suffer from financial anxiety.
Even though I’m a CPA, a trained financial professional who has worked for major accounting firms and helped hundreds of people with their own financial issues.
I have freaked out when my kid ended up in the emergency room because I was worried about how I would pay the bills.
I have felt gut-wrenchingly sick when I’ve opened my credit card bills.
Currently, with the injury I’ve suffered and the disability I’m dealing with, I am regularly terrified that I will lose everything. My house, my pets, my car, all of it.
This is despite the fact that I know I have enough to pay for everything and will not end up out on the street or having to rehome my dogs.
I am very lucky. I was smart enough to get long-term care insurance, so at least some of what I’m spending on care right now will be reimbursed (at some point). I have a financial cushion and a retirement nest egg.
But anxiety doesn’t care about any of that. It doesn’t deal with reality.
And once it starts spiraling, all you can think about are the worst possible outcomes. To top it off, financial anxiety doesn’t need a crisis to kick in. I live with it all the time, and so do countless others. It just gets worse when a bigger financial trigger looms over our heads.
The Financial Anxiety Spiral
Here’s the real problem with financial anxiety.
As I mentioned earlier, it can trap you into unhealthy patterns that harm your current and future financial security.
Even if you can step back and realize that your feelings don’t match reality, financial anxiety can cause you to make – or not make – decisions that damage your financial situation. Which then causes more anxiety, which causes more damage…. And so on… and so on…
Those swirling thoughts that freak you out can end up causing the harm they’ve envisioned.
Before I go any further, I want to reassure you there is a way out of this spiral. Keep reading, I’ll talk about that later in this blog post.
But first, I want to address the ways financial anxiety can inadvertently trap you in this cycle and cause you to create the very problems it makes you worry about in the first place.
Trap #1 – Not Spending Money On Yourself
Financial anxiety will make you feel like you don’t deserve to spend money on yourself. Even for the things you need.
Now, you might be thinking, “But I don’t really need that latte or that manicure.” And sure, that may be true. But taking care of yourself is important, even if it involves indulging in little luxuries like this.
More importantly, you do need to spend money on things you actually need. Sometimes that may be a haircut or a new toothbrush. Other times it could be more crucial issues like going to the doctor when you’re sick or getting preventative check-ups that could identify serious medical issues before they develop into critical conditions that land you in the hospital.
If your financial anxiety is holding you back from investing in your own health and well-being, you can unknowingly cause a whole new set of problems, physically, mentally, and financially.
The reality: You need to take care of yourself, whether that means buying new pants that fit better… going to the dentist every six months… or grabbing a latte when you really want one.
Trap #2 – Ignoring Your Bills
A common issue among financial anxiety sufferers is ignoring bills as they come in. Whether it’s just too stressful to look at them or you’re worried you won’t be able to pay them, your anxiety stops you from even seeing what’s there.
The stress of seeing how much you owe is just too much to deal with. So maybe you have a pile of unopened envelopes. Maybe it’s unread emails or other reminders.
But here’s the thing: If you don’t look, you won’t have any idea how much you owe. And that’s even more stressful.
And the longer you ignore those bills, the more they’ll pile up.
This results in late fees, which costs you even more money.
Even worse, you could end up with creditors calling to harass you… your utilities being shut off… or your credit cards canceled. And then self-blame and shame and guilt can start to kick in, making your financial anxiety even worse.
As scary as it is, looking at your bills is a good thing. But it’s easier if you don’t have to do it alone.
Trap #3 – Not Doing Your Taxes
I’m the first to tell you that our tax system is screwed up. I rant about it all the time.
It’s overwhelming and frequently impossible to understand, even for those of us who are trained to deal with it.
Still, the government does expect you to pay your taxes and file a tax return every year. If you don’t, you’ll get hit with IRS penalties and interest on the amount you owe. That can really add up over time. And knowing this can send your tax anxiety even higher.
So the thought of sitting down, getting all of your financial records together, and tackling your tax returns can feel like an insurmountable and terrifying task.
So you keep putting it off. And the anxiety builds. And you feel like you can’t bring it all to someone because they’ll judge you and berate you. Not to mention all the money you’re afraid you’ll have to pay.
But hear this: It’s almost never as bad as you think it is. Sometimes… you’re missing out on refunds. And getting it done will take a huge weight off of you, freeing up your mental and emotional energy for something better.
Trap #4 – Avoiding Your Bank and Investment Account Statements
Along with the dread of opening your bills, you may equally dread looking at your bank and investment account statements.
When you have financial anxiety, even thinking about looking at the numbers can make you shut down, panic, or cry.
But when you avoid these statements, you may miss an important signal that something is wrong with your account. Maybe the bank charged fees when it shouldn’t have. Or maybe there’s fraudulent activity in your investment account.
If you don’t pay attention to your bank balance, you risk not having the money you need in the right account to cover a payment. Or you might not realize your account is low on cash when you go to make a payment with your debit card.
And when it comes to your investments – especially if someone else is managing them – you want to know when there’s activity rather than be surprised by it. And that’s just partly because many transactions trigger tax bills… and you really don’t want to be surprised by those.
Believe it or not, paying attention to these numbers can feel empowering instead of overwhelming, and actually build your financial confidence and security.
Trap #5 – Leaving Your Money In a Low or No-Interest Savings Account
As strange as this sounds, keeping too much money in a savings account can be very bad for your finances.
Regardless of when you need access to your money, you want it to be working for you at all times. Keeping most of it in a low or no-interest savings account means your money isn’t serving you as well as it could be. It’s just sitting there doing nothing for you
It’s not something people really think about. You open a savings account and you stick money in it. You never really think about putting it in a better savings account. But if a financial advisor recommended putting this money into a higher-yield savings account, most people would probably do it.
It’s different for people with financial anxiety because it’s something they actively avoid thinking about.
If anyone, a financial professional or a friend, advised them to move their money into a higher yield savings account, they just wouldn’t do it because it involves thinking about money, which is overwhelming. Not to mention deciding which high-yield savings accounts to choose, how much money to move, and several other choices that can quickly overload the anxiety brain.
Over time, leaving a big chunk of your money in low or no-interest savings account can damage your finances. You’d be losing out on bigger interest payments, which pile up and add quite a bit to your bank balance. And because of inflation, your “safe” money can lose purchasing power.
So you can miss out on a lot of extra money because financial anxiety got in the way.
Taking steps like moving some cash to a high-yield savings account can increase your financial stability… a critical piece of self-care. And while more financial security won’t cure financial anxiety, it will set you up for a brighter financial future.
Trap #6 – Not Creating and Funding Your Retirement Savings
When you suffer from financial anxiety, your brain makes it very easy to ignore retirement savings. After all, you may need that money right now.
Unfortunately, this means when “later” arrives, you may not have what you need to live comfortably then either.
Luckily there are ways to save for later that don’t make it hard and expensive to access your money if you need it. Because you will absolutely need a nest egg in the future. I mean even if Social Security benefits were guaranteed, the monthly payouts aren’t nearly enough to live on comfortably.
And retirement doesn’t have to mean you stop working at age 65. It really means having the ability to not have to work if you don’t want to. That gives you more flexibility and freedom… and lets you get out of a toxic work situation without worrying about where the next paycheck is coming from.
Retirement savings – really long-term savings – gives your money a lot of time to grow on its own. So, the sooner you start, the more money your money will earn – and the less you’ll have to stash away. And you’ll never have more time on your side than you do right now.
Preparing for your future can give you a greater sense of control over your finances… and make your life so much easier further down the line.
Trap #7 – Having a Hard Time Making Any Decision that Involves Money
One of the biggest problems that comes along with financial anxiety is decision paralysis. You have such a hard time making any financial decisions that you end up not making them at all. This can lead you straight into many of the traps I’ve talked about here.
Decision paralysis happens when you’re so overwhelmed by choices that you’re literally frozen in place, unable to figure out what to do. I hate that this happens to me – but it does. Just yesterday I had to ask my sister to help me choose a pair of non-skid socks (my Physical Therapist insists on them) and I got overwhelmed when I Googled it.
And this can happen with everything from buying a new laptop or ordering furniture to paying your bills, choosing health insurance coverage, or making decisions for funding your retirement.
Not making decisions can keep you stuck in a financial anxiety spiral and do serious damage to your finances. That’s why it’s so important to get help when you need it…
Because having someone support you as you work to overcome financial anxiety makes all the difference.
The Honest Truth About Financial Anxiety
I want to be absolutely clear. You are not doing anything wrong. You are coping with anxiety in the best ways you can – and that often means shutting down.
Your brain is just wired differently, probably because of some early trauma connected to money. And that can cause panic when it comes to all things financial. As bad as that feels, it’s even worse when you actually start having money problems caused by your financial anxiety. That can take the shape of:
- An IRS audit
- Overdrawn bank accounts
- Not-invested investment accounts
- Undiscovered fraud or identity theft
- Untreated health issues
- Loss of purchasing power (when a dollar buys less and less every year)
- Harassment by bill collectors
- And so much more…
And here’s the thing: It is virtually impossible to deal with financial anxiety on your own.
I work with my therapist to deal with my financial anxiety. Together, we focus on the facts, figure out the steps, and start taking smart actions to help me move forward. I turn to my family and friends when decision paralysis strikes hard or I need a reality check about the financial panic I’m feeling.
Working through financial anxiety is so important that I offer dedicated financial coaching services to my clients.
And I have a few spaces open for new coaching clients right now.
If you’d like to work with me to learn ways to manage your own financial anxiety, I’m here for you. No matter how bad it may be emotionally or financially.
Here’s How It Works
You and I will meet regularly to break down the issues you’re facing and build up your confidence and security.
We’ll move forward at a pace that’s comfortable for you and tackle your priorities one at a time in a way that feels safe for you.
We’ll break everything down into small steps that you can easily wrap your brain around, so nothing ever feels too overwhelming.
Together we’ll create a custom plan to help you feel more confident about your finances. That could include things like:
- Identifying and overcoming your unique money demons.
- Increasing your comfort when making major purchases.
- Investing in self-care that’s right for you.
- Taking practical steps like getting caught up on your taxes, paying off bills, setting up retirement accounts, and increasing your credit score.
- Developing the confidence to start investing so you can build sustainable wealth
Every time we meet, you will see concrete results. We’ll keep racking up accomplishments and building on success until you feel more confident and comfortable with your finances and your money management skills.
I know how hard it is to take this first step. Especially because it involves spending money to help you overcome your anxiety about money. That’s why I’m going to make it as easy as possible for you.
Our first meeting will be a free no-pressure 30-minute conversation. We’ll get to know each other and make sure we’re a good fit. And we’ll figure out the best way to start moving forward together.
All you have to do is click on the button below and fill out a short questionnaire to let me know that you are struggling with financial anxiety and how I can help.
Once you do that, I’ll be in touch and help will be on the way.
In the meantime, congratulate yourself on taking the first step of recognizing the problem and at least being willing to do something about it.
Don’t worry, together, we’ve got this.