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


If the thought of looking at your bank account sends you into a stress spiral, you’re not alone. Finances are a common anxiety trigger, experts say.

One reason why money can make us feel frazzled? It's linked in our minds to survival. "Money is really a resource that can provide people with a sense of safety and security," says Chloe Carmichael, PhD, a psychologist in New York City. "When we feel that resource is scarce, it can actually make people feel like their survival is in jeopardy on a very primal level."

But your finances don't have to be so scary. In fact, some financial anxiety can actually be a good motivator, says Matt Lundquist, LCSW, a psychotherapist at Tribeca Therapy in New York City."If a certain situation makes you feel appropriately anxious, it can be helpful in getting you to make a necessary change," he says.For example, realizing you overspent last weekend may prompt you to rethink your budget, while feeling nervous about a big upcoming expense could lead you to put aside more than you need. But financial anxiety becomes a problem if it's constantly on your mind or starts to disrupt other aspects of your life, says Lundquist.

So how can you manage money worries so they don't get out of hand? Here, the pros outline how to deal with a few of the most common financial stressors.

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Do you constantly worry that you're not saving enough for retirement, an emergency, or your child's college fund? "People are [often] anxious about whether they’ve set enough aside and are living within their means," says Lundquist.

Reworking your budget, opening different types of saving accounts, and setting up direct deposits can help ease some of this anxiety. The key, says Carmichael, is to do something. "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 explains. "It becomes a vicious cycle. Even if things aren't how you’d like them to be now, having a plan in place for how you can save over time will keep you in a better mindset."

If you still feel anxious after making (and sticking to) a savings plan, it may reflect a deeper issue about your relationship with money. "Some people have to work through what it means to deprive yourself of something or do without, which you will have to do in some sense to save money,” he says."It's all about cultivating pride in good money habits—instead of money itself."

Job security

Will I lose my job? Will my business be successful this year? Work worries are often related to financial stress, says Lundquist."This fear tends to be historical," he says. "You might be especially concerned about [your job security] if you were laid off in the past, or if your parents had job trouble when you were growing up."

Speaking to your boss about the state of your company and asking for feedback to make sure you're performing well may boost your confidence. And while counterintuitive, it might also be helpful to force yourself to imagine what it would actually be like if you lost your job. "It gets people to think about their other career options, what their savings situation is, if they would need to move, sell something, switch industries, or ask for help from family," Lundquist says. "For most people, they recognize they are a number of levels away from actually ending up on the street, but they’re operating on an emotional level as if the stakes are in fact that high."

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How much money you make can feel like a personal reflection of your worth, says Carmichael. And when you're anxious about money, your salary can contribute to feelings of low self-esteem."If we feel like we don’t have as much money as our neighbors, that can sometimes feel like a source of shame," she says. "On some level, we might think it means we're not worth as much, literally."

If you want to stay in your current line of work, Carmichael recommends trying to focus on the other aspects of your job that are fulfilling.But if your career isn’t giving you that sense of fulfillment and a higher salary is a priority, that’sOK, too—what you need and want from a job can change over time.Pursuing a new career path is one option, as is asking for a raise.

Salary negotiations make many people anxious, and Lundquist says the key is to recognize your value to your employer. "Sometimes even going on an interview with a head hunter—even if you don’t plan to change jobs—can help you realize what you’re bringing to the table and know your worth going into the conversation," he says.

Lacking financial savvy

"I just don't know what I'm doing" is a common concern when it comes to money, says Lundquist.Whether you're taking out a loan, setting up a Roth IRA, or investing in the stock market,it's totally normal to wonder if you're "doing it right."

"Most of us have more financial information than we have financial savvy,"Lundquist explains. "The disparity between the volume of information and the savvy is a recipe for anxiety."

If you want to make your money work for you but have no idea where to start, set up a meeting with a financial advisor. "Have them do a risk profile and advise you on your options based on the level of risk you’re willing to take,” says Carmichael. "And if investing in any way makes you nervous, remember that not investing is also taking a risk—you could be losing money in the long run."

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Paying off debt is never pleasant, and it's especially scary if you don’t have a plan in place.To take action, Carmichael recommends meeting with an advisor to review how you can rejigger your spending to put more money toward your debts. Then, vow to make small, gradual changes you can stick to.

Another good idea is to have an "accountability partner" review your spending, such as a financial counselor, therapist, or trusted friend. "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 says. "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." She notes that some of the biggest issues arise when people don't plan ahead for big expenses, such as an upcoming vacation.

Identity theft

With so much of our financial information available online, anxieties about identity theft and credit damage are common, especially after a big security breach makes the news. "I’ve had clients who’ve gone through those types of experiences, and it’s maddening because they feel a loss of control," says Carmichael. "I would definitely encourage people to be proactive if they’re worried about their credit or identity being compromised—decreasing uncertainty helps ease anxiety."

It's a good idea to set up fraud alerts and make sure you have easy access to your account in case you need to quickly freeze it, Carmichael says. But if you’ve taken steps to secure your money and you're still anxious, she suggests trying to turn your energy to something else. "At that point, it’s just becoming wasted energy, and it’s good to come up with three things that your energy would be better spent worrying about."

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Comparing wealth

For some people, simply being able to afford food and shelter is a constant concern. But for those who are living comfortably and still find themselves trying to keep up with the Joneses, Carmichael suggests taking a step back and considering all that you do have. "Things we take for granted now, like microwaves or computers, would have been considered luxuries 30 years ago," she says.

One way to gain perspective is to make a list of five or ten things (material or not) that you're thankful for."There’s a whole industry of marketing and advertising that’s designed to push our cognitive buttons and make us desire things we don’t have," Carmichael says. "If we’re not careful, we can get swept away in that."