Managing Anxiety When Money Feels Overwhelming

Practical Strategies to Manage Money Anxiety

Managing anxiety about money includes creating financial management systems and using coping strategies to support your mental health.

Create a Simple Budget or Tracking System

Creating a realistic plan for your finances can help ease anxiety by reducing uncertainty. In fact, one study found that planning was associated with reduced stress in gig workers. If you’re not already doing so, tracking your finances helps you see where your money goes each month, accounting for both small and large purchases. Some people do this by checking their bank accounts and credit card statements. Others use apps or spreadsheets to keep track of their spending which can give an increased sense of control over where your money is going.  

Tracking your spending can also be helpful in creating a budget, focusing on your essentials first, and then moving on to savings and extras. Tracking can also help you to decide if there are areas of spending where you can cut back. We understand that the economy is tough, and some people may be struggling to cover their essentials. If this is the case, the U.S. government does provide a list of government benefits to help. 

How you choose to budget depends on your personal situation and goals. There are several popular budgeting strategies, including the 50/20/30 budget, zero-based budget, and envelope budget.

Once you make your budget, make sure that you schedule regular financial check-ins with yourself and/or your partner. 57% of people who are married or living with their partner say financial worries affect their relationship. So, regular check-ins can help you both stay aligned and tackle financial stress before it builds up.

Practice Mindfulness and Grounding Techniques

Mindfulness and grounding techniques can reduce stress and calm racing thoughts by teaching you to focus on the present moment. Breathing exercises, meditation, and short mindfulness breaks can lower stress and anxiety. They also offer specific benefits for financial anxiety. Research has shown that mindfulness can improve financial decision-making by increasing cognitive flexibility and reducing the impact of stress on decisions.

Break Big Financial Tasks into Smaller Steps

When you have large goals—or your goals aren’t well defined—things can seem overwhelming. This can make it difficult to have the motivation to complete financial tasks, which can make things pile up. Instead, try to break things up into smaller tasks, so that you’re able to focus on one bill, one payment, or one task at a time. It can also be helpful to make a plan for each problem. For example, you could create a plan to put 5% of your monthly income into paying off credit card debt. At the same time, you could plan to save 10% of your annual income for a down payment on a home.

Reframe Your Thoughts About Money

Our thoughts about money can be closely linked to our emotions. For example, someone might think that they’ll never be able to get ahead, which can bring up feelings of inadequacy, failure, and hopelessness. Practicing self-compassion and focusing on what you can control can help remind you of the facts and your realistic goals. Some people also find it helpful to focus on what they can control and to reframe challenges as opportunities. 

• Instead of “I’ll never get ahead,” try “I don’t need to fix everything at once and can take small steps toward improving my financial health.”
• Instead of “I’m not good with money,” try “I wasn’t taught the skills needed to manage money, but I can learn them now.”
• Instead of “I should be further along than I am right now,” try “I’m responding to my circumstances with the tools I have.”
• Instead of “Other people my age are so much better off,” try “I don’t know all the details of others’ experiences, and everyone has a different timeline”.

Seek Professional Guidance

Studies show that people with better financial literacy often feel less anxious about financial planning. But not all of us were taught what we need to know, and some financial situations can be complicated. A financial advisor can help bridge this gap. They can explain confusing financial jargon to you and provide you with community resources. They can also explain efficient ways to pay off any debt and help you develop a strategy to reach your financial goals. 

Mental health professionals can also provide guidance and support in managing anxiety about money. They can help you process any past trauma that may be contributing to anxiety around finances and help you identify and change negative thinking patterns. They can also help with managing feelings of shame and guilt and identifying any underlying anxiety or depression.