7 Ways to Reduce Your Financial Anxieties

Kay T.

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Last week I was laying in bed, scrolling through my phone as I always do before calling it a night. After doing a final check of my social media accounts, I felt the welcomed blanket of drowsiness wash over me and knew I would soon drift off to sleep. I set my phone on my nightstand, turned off my Himalayan salt lamp, and settled onto my pillow. But just as I was about to flow into a peaceful slumber, a thought jolted me awake: my rent is due tomorrow.

Almost instantaneously, my heart rate increased and my eyes popped open. Did I have enough money in my checking account to cover rent? When would my next paycheck show up in my account? Do I have enough money to hold me over for the next few weeks? My financial anxiety kept me awake for a couple of hours. After I had checked all of my banking accounts, re-evaluated my financial plans, and travelled down the rabbit hole of reading ‘how to earn extra money’ articles, my mind finally settled enough for me to get some sleep.

I wish I could say this wasn’t a frequent occurrence, but I find myself worrying about money regularly. Not just concerns about my current financial situation, but stress about what would happen if I found myself suddenly without an income or facing a hugely unexpected expense. It’s in our nature as human beings to jump to the worst-case scenario, and if you’re anything like me I’m sure you’ve had a fair amount of restless nights caused by financial anxiety.

If the topic of money causes you to stress, you’re likely lacking a sense of control over your finances. By taking steps to put yourself in the driver’s seat of your financial plans, you can greatly reduce your anxieties around money and avoid abrupt wake-up calls in the middle of the night. Here are seven things that you can do to reduce your financial anxiety.

1. Don’t dwell on financial mistakes

The art of handling finances is a journey and everyone makes mistakes along the way. There is no sense in shaming yourself for past financial blunders; hanging onto memories of money regrets will only increase your financial anxiety. If you find yourself reliving a time when you mismanaged your money, direct your thoughts to ways that you can continue to improve your handling of finances.

The only mistakes you should be ashamed of are those you continue to repeat; if you learned from your past mistakes, you can rest assured that you are more financially savvy for having gone through that experience.

2. Review your budget

One of the first things that I do when I’m experiencing financial stress is revisit my budget. Often, tweaking my budget to allow for even just a few more dollars worth of savings eases my stress by reminding me that I am doing all I can to be smart with my money. Regularly checking in on your budget ensures that you are not missing any categories of overspending while maximizing your savings. Here is a checklist that I follow when I am assessing my budget:

  • Review: Account for every monthly expense that comes up (yes, even your $0.99 charge for extra iPhone storage needs to be included). Keep in mind that expenses are usually inconsistent and it’s likely they will fluctuate from month to month. By reviewing your spending, you may find areas that you can reduce your costs to allow a little more money to flow to your savings account.
  • Avoid the red: You must make sure you are not ending up in the red at the end of the month. In other words, your expenses cannot exceed your income. If you do find yourself in the red you need to either reduce your expenses or find additional sources of income to bring yourself back to the green.
  • Pay off debt: If you owe money, make sure your budget includes a debt pay-off plan. Knowing what you owe and a timeline of when you’ll get your debt paid off can be a major relief.

3. Contribute to an emergency fund

One of the first lines in your budget should be an emergency fund. In other words, you want to be setting aside money that will save you if you do find yourself living through a ‘worst case scenario’. Some of my greatest money stresses come from thinking about the what-if’s; will I be prepared if an unexpected event suddenly derails my income?

I’ve discussed the importance of building multiple emergency funds before and have been able to put myself in a position where I could support myself without an income for three years. Having the cushion of multiple emergency funds has given me an invaluable peace of mind knowing that I could withstand an unexpected expense or change in my income.

4. Don’t compare yourself to others

Easier said than done, I know, but comparison is the quickest path to self-destruction and is a completely unhealthy habit to fall into. Whenever I start comparing my financial status to someone else, I try to keep a few things in mind:

  • You don’t truly know what’s in their bank account. Sure, they may portray themselves as being able to afford a life of luxury, but what they put into the world is often very different from their true reality.
  • You don’t see the hard work that has gone into someone else’s success. People like to make their achievements look effortless and easy, but if they are truly successful, they’ve likely had their fair share of struggles and shortcomings.
  • Your experience is unique to you; you shouldn’t try to mirror someone else’s journey.
  • Focus on your own satisfaction, rather than measuring your success against everyone else’s. If you are happy in your life, then it doesn’t matter how you stack up against anyone else.

5. Talk to someone

This is especially true if you are managing money with a partner. You should not be the only one in the relationship feeling the weight of financial stress. Ensure that each of you has clear and distinct financial responsibilities and that your long-term financial goals align. Even if you are managing your finances solo, having someone trusted to turn to for advice can alleviate some of the burden of financial stress.

6. Educate yourself

While people often say that ignorance is bliss, this life motto does not apply to finances. If you find yourself worrying about a lot of the uncertainties of finances and money, try to find ways to turn those unknowns into knowns.

Want to start saving for retirement but don’t know where to start? The internet is your best resource for finding articles with step-by-step information about maximizing your retirement savings.

Unsure of how to budget? Dave Ramsey has extensive resources that helped me, and there are tons of other financial gurus from which you can learn.

There are so many different aspects of money and finances that you may be interested in further exploring. No matter what you are unsure about, the best way to calm your fears about the mysteries of money is to learn about them.

7. Embrace a little bit of concern

You shouldn’t feel a level of stress that is so consuming that it’s keeping you up at night, but having a small amount of concern over your finances is something to embrace. Your awareness of the importance of managing your money means that you are less likely to make poor financial decisions.

Being cautious and concerned with sticking to your budget is a sign that you are handling your finances correctly. Throwing all caution to the wind and taking a carefree approach to your cash means you probably aren’t thinking about your future. So don’t feel a need to completely rid yourself of money concerns; remember that it is normal and valuable to be mindful of your financial decisions.

Obsessing over your financial fears won’t solve your money problems. Instead of losing sleep over money, find ways to take back control of your finances by educating yourself and ensuring you are doing all you can to better handle your cash. Being proactive about your finances will give you a sense of confidence that will calm your fears about your financial future.

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