Stressed About Your Salary, Debt, or Spending Habits? Here’s What to Know About Financial Anxiety

You are not alone if the mere notion of checking your bank balance causes anxiety. Concerns about money are frequent, and after a worldwide epidemic that caused widespread job loss and economic suffering, this is especially true.

According to the Congressional Research Service, in April 2020, at the height of the epidemic, unemployment reached a peak of 14.7%. That percentage is higher than the peak unemployment rates during the Great Recession of 2007–2009, making it the highest unemployment rate the United States has seen since the Great Depression.

Two years have passed since these jobless highs, but that hasn’t calmed Americans’ nerves much. Soaring inflation has made it harder than ever to pay for necessities like food, petrol, and utilities.

One of the reasons why financial worries are so common? We mentally connect it to our basic ability to stay alive. "Money is really a resource that can provide people with a sense of safety and security," says Chloe Carmichael, PhD, a psychologist based in New York City and quoted in Health. To paraphrase, "when we feel that resources are scarce, it can actually make people feel like their survival is in jeopardy on a very primal level."

There’s no need to panic about money. Matt Lundquist, LCSW, a psychotherapist at Tribeca Therapy in New York City, tells Health that some financial concerns may be a positive incentive.

A healthy dose of fear may motivate you to make positive changes, he argues. For instance, if you overspent over the weekend and then realized it, you could reevaluate your spending habits, and if you’re worried about an approaching bill, you might save more money than you need. However, according to Lundquist, money worries become problematic when they take up too much mental space or start to get in the way of daily living.

So, how can you keep your financial concerns under control? Expert advice on relieving financial strain is provided here.

Create a plan

Amy Morin, a licensed psychotherapist and the author of four books on mental strength, has given several presentations on the topic of how one’s financial situation might affect one’s state of mind. According to her research, those who are in debt are three times more likely to experience despair. Suicide ideators also tend to have higher levels of debt, according to Morin. One of the most important strategies to confront these negative emotions and ensure they don’t win? Create a strategy.

Morin, who is also the editor-in-chief of Verywell Mind, tells Health that coming up with a concrete strategy might help people feel more in charge of their financial circumstances. Spending cuts and revenue increases may both figure into your plan. As part of this process, you should create a monthly budget and an organized strategy for paying off your debt.

It’s important to take into account the sources of emotional strain while you formulate your strategy. Mental health professional Celia Mion-Araoz, who deals with patients at Community Health of South Florida Inc. who are stressed out by financial concern, tells Health.

Mion-Araoz recommends making a list of all the invoices, payments, or charges that need to be addressed, and then prioritizing them from most urgent to least urgent. "Prioritization is a crucial first step in order to get your head around a more complex problem, break it down, and thereby gain a sense of control over it," which will "help you gather momentum for working your way through the financial stress and through the items on your list."

Focus on attainable goals first

Create a list of realistic payment targets and a workable strategy for tackling each item on your list, moving from the top down once you have established a hierarchy of financial priorities.

Again, as Mion-Araoz puts it, the point is to "begin to break down the financial stressors into smaller parts," to deal with the most pressing issues first and in order of importance rather than everything at once. As the author puts it, "by achieving these incremental, attainable payment goals or wins, you gain confidence and momentum and reduce the sense of being overwhelmed."

Recognize and talk through your emotions surrounding money

Health spoke with Julie Elledge, PhD, founder and CEO of Mentor Agility, to learn more about how money influences every aspect of our life. However, there is no help for people to deal with these emotions, and few socially acceptable methods to communicate about sentiments related to money. One of the first steps in dealing with worry is realizing that it’s okay to talk about money worries.

Speaking about one’s financial situation may evoke a wide range of feelings, including guilt, pride, anxiety, envy, power, control, and a sense of worth, as Elledge points out. "By learning to recognize and discuss these feelings, we can lessen the hold that money has on our well-being."

Elledge recommends talking to a life partner (though it may bring up extremely powerful emotions) or a financial wellness coach about how you’re feeling.

"A coach who is fluent in financial wellbeing will help you manage emotions, define your goals, plan your opportunities, and help you find the road map to getting back on the right track," says Elledge.

Elledge expands on this idea, saying that this kind of expert may help you reframe your "underachieving narrative" as an inspiring one of triumph. Storytelling methods that aid a client in integrating their varied and powerful feelings into a single narrative thread are frequently employed to achieve this goal. Elledge recommends consulting a financial expert to "help you manage the resources to bring your story to a successful outcome."

Schedule time to worry

Many aspects of your life and your finances are beyond your control. Neither the economy nor your chances of getting a pay rise are under your control. Moreover, there is no use in expending mental resources on such concerns. Instead of letting anxiety about these issues consume your whole waking day, consider limiting it to just 15 minutes by making time in your schedule for it. This may seem strange, but bear with me; I promise there’s a legitimate explanation behind it.

It’s possible to "train your brain to worry during your scheduled time only," as Morin puts it. All it takes is some practice. By not worrying about events beyond of your control, you’ll have more mental and physical resources available to take advantage of throughout the day.

Morin recommends allotting at most twenty minutes each day to sit and fret as a starting point for this behavior. Put a timer on your phone and make yourself stop what you’re doing when the timer goes off.

Continue contributing to savings

Concerns about the future are common, and it’s normal to worry about things like retirement and funding a child’s college education. People worry if they have saved enough and are living within their means, according to Lundquist.

Some of that stress may be alleviated by doing things like revising your budget, diversifying your savings accounts, and setting up direct contributions. Carmichael argues that the important thing is to take action.

"When people feel financially dissatisfied or anxious, they can become avoidant and then they don’t even want to open up their bills or bank accounts," she continues. It’s a never-ending circle. A positive frame of mind may be maintained regardless of the current state of affairs if a strategy is put in place for long-term savings.

If you’ve made and are following a savings plan, but are still experiencing anxiety, the problem may lie somewhere in your perspective on money. You will have to sacrifice certain comforts in order to make ends meet, and "some people have to work through what it means to deprive yourself of something or do without," he warns. "It’s not about the money; it’s about taking pride in responsible financial practices."

Reinforce your sense of job security

Can I expect to be fired? How well do you think my company will do this year? According to Lundquist, work concerns can contribute to financial stress. Moreover, "this fear tends to be historical," he says. If you’ve ever been laid off or if your parents had problems finding work when you were a kid, "job security" is likely a major issue for you.

A boost in self-assurance might result from a conversation with your employer regarding the company’s current status and your performance. Although it may seem counterproductive, visualizing life after job loss might be a useful exercise.

"It gets people to think about other career options, what their savings situation is, if they would need to move, sell something, switch industries, or ask for help from family," adds Lundquist. "Most people know they have a lot to lose before they end up on the street, but they’re acting as if the stakes are actually that high on an emotional level," says the author.

Don’t let salary define your worth

According to Carmichael, one’s sense of self-worth is correlated with their income. And when you’re worried about money, it’s easy for your wage to become a source of shame. "If we don’t feel like we have as much money as our neighbors, that can sometimes feel like a source of shame," she explains. As the quote suggests, "on some level, we might think it means we’re not worth as much, literally."

Carmichael suggests looking beyond the negative parts of your profession in order to find reasons to continue in your present field. If a better wage is important to you but your current employment isn’t satisfying you, you may try switching gears or asking for a raise.

Many individuals are nervous about negotiating salaries, but according to Lundquist, the key is to know how valuable you are to your company. Even if you have no intention of changing professions, he adds, "going on an interview with a headhunter can help you realize what you bring to the table and know your worth going into the conversation."

Change up your spending to address debt more aggressively

Debt repayment is never a fun experience, and it can be downright terrifying if you don’t have a strategy in place. Carmichael suggests seeing a financial expert to determine where you may cut back on expenses and use the savings to pay off debt.

Having a "accountability partner" who will keep tabs on your expenditures is another smart move. A trustworthy friend, a therapist, or a professional advisor are all viable options. "Give them your Mint password if you have to, and take an honest look at things with them so you can face the music and not bury your head in the sand," Carmichael advises.

"Clients talk to me weekly about their habits, and they’ll notice what their triggers are and what prompts them to overspend or rack up credit card debt," Carmichael says. She said that people often run into trouble when they don’t budget adequately for major purchases like a trip.

Find inspiring stories of people getting out of debt

Possessions and stuff, like someone’s new car or gadget, tend to dominate your social media stream and in-person interactions.

Morin warns that being exposed to such material wealth might make one feel inferior and lead to impulse purchases beyond one’s financial means. "Instead, seek out those who are rejoicing about having paid off their debts. Many people with the shared goal of paying off their debts have gathered in online groups and discussion boards. Seeing other people get psyched about saving money and paying down debt might motivate you to do the same.

Make impulse spending harder to access

Morin advises those who are vulnerable to impulsive buying or who spend a lot of time shopping online to attempt shielding themselves from temptation by making it more difficult to engage in these activities.

Morin recommends just bringing a set amount of cash into a business or not saving credit card information to a computer (while also keeping the card out of sight). "These minor roadblocks can play a significant role in keeping you on track to achieve your monetary objectives."

Avoid turning to unhealthy habits

The need to self-medicate with drink or drugs is a common human response to stress of any kind, including financial hardship. might even resort to gambling in the naive belief that doing so will help one’s financial situation. Of course, these behaviors will have an effect on your health and finances in the long run.

Instead of spending money on unhealthy activities to relieve stress, as Mion-Araoz recommends, "focus on stress-relievers that are cost-free, such as going for a walk, doing some other form of exercise, meeting up with friends who care about us, and identifying support systems that can help you manage financial stress."

Contact a mental health specialist if you are experiencing intense urges to engage in substance misuse.

Stop comparing wealth

Having enough money for basic necessities is a daily worry for some individuals. However, Carmichael advises folks who enjoy a comfortable lifestyle but are still striving to keep up with the Joneses to take a step back and appreciate what they have.

Those "things we take for granted now, like microwaves or computers, would have been considered luxuries 30 years ago," she says. Making a list of five or ten items (material or not) for which you are grateful is one method to gain perspective.

Marketing and advertising are "a whole industry" that "push our cognitive buttons and make us want things we don’t have," as Carmichael puts it. We risk being carried away if we let ourselves be carried by that.