Overwhelmed by financial anxiety? Here’s how to set tangible goals in 2019

It’s a new year, which means it’s time for new habits—like finally learning how to manage your money. In each installment of Get Your Money Right, we’ll tackle a different aspect of financial anxiety and offer practical solutions and steps you can take toward a brighter financial future. You got this.

For as long as I can remember, I’ve always been afraid of all things money-related. At times, my fear of money has given me such bad stress and anxiety that it’s caused bouts of nausea, stomach pain, migraines, panic attacks, and insomnia. This mental and physical reaction has, more often than not, made me avoid my finances, creating a vicious cycle in which I feel so totally overwhelmed that I put off dealing with my money issues. Then, everything blows up in my face and I kick myself for not doing something about my money problems sooner. Beyond this, I’m a freelance writer who doesn’t receive a steady paycheck, buys too much vintage clothing, doesn’t cook, and has never kept a budget. Yeah. I know.

Now that I’ve been working through my anxiety disorder in psychotherapy (and I’m also nearing 30 years old), I’ve decided that it’s time to break the pattern, unpack where all this financial anxiety and shame come from, and figure out how I can deal with these emotions more healthily. As I write this, I feel overwhelmed and petrified, but as they say, the only way is through, right?

According to Dr. Megan McCoy, a therapist and faculty member in the Financial Therapy Program at Kansas State University, “Financial stress shares a lot of similarities with any other situational anxiety.” Due to this, dealing with your personal finances can cause symptoms similar to Generalized Anxiety Disorder, including excessive worrying, irritability, and ruminating thoughts. Moreover, research has shown that these stresses can negatively impact our physical and mental health, romantic relationships, and parenting practices. And while other things we fear can be avoided—for example, if we have a fear of flying, we can take a car—McCoy says we can’t avoid money so its related stress has a more powerful and lasting impact on us.

When people don’t feel financially stable, they sometimes operate in survival/threat mode, says Nicole Reiner, a psychotherapist in New York. “They are constantly trying to figure out how to make ends meet and worry if they lose focus, this could impact their survival.” If this mindset is present, the person may have a difficult time focusing on other areas of their life or taking care of themselves, which can ultimately cause even more anxiety. 

According to Jenn Monahan, a financial trainer at New York’s Financial Gym, anxiety about finances can be caused by a number of things, including a lack of education about money, unhealthy spending habits, unexpected traumatic events (like the sudden loss of a loved one, job, or relationship), and pressure from social media or peer groups to spend money you don’t necessarily have. 

It’s no wonder the relationship between finances and our emotions is inextricably linked. As therapist Patrice N. Douglas explains, “If we are broke, struggling, or not able to do the things we like, we can become depressed and angry.” On top of that, she says that someone with depression or bipolar disorder could spend excessively as a way to feel better, but when they look at their bank account and see they made a bad decision, their symptoms can worsen, making them to suffer even more. 

Money woes are still a major social taboo. The media tends to catastrophize financial situations and turn them into crises, such as rising student loan debt and the high cost of housing, making it hard for people to know what financial issues are normal or how to prioritize different problems. As financial therapist and professor at the University of Georgia Dr. Kristy L. Archuleta says, “This taboo means we lack necessary financial knowledge, ability, or confidence, which are required in order to make good financial decisions.” And when we’re not sure about what to do or are in trouble financially, we isolate ourselves and don’t seek help because we’re told from a young age that we’re not supposed to talk about money.

So what can you do to start addressing these issues and set tangible goals?

Many of Monahan’s clients deal with similar challenges, and she says the first step is understanding how and why you got to this point. “Making a list of what scares or stresses you the most can be a helpful starting point; then, research how to better manage each item, one at a time, to create a toolkit of financially fit habits and exercises.” Keep in mind, you don’t need a business degree to figure out your finances. According to Monahan, “Creating a budget and sticking to it can be achieved at any income level. Getting into a pattern of putting 15-20% of your gross monthly income aside for savings is a quick and easy calculation—no academic credentials necessary.” Plus, there are a ton of free, approachable resources out there, such as blogs, apps, books, and educational events. Monahan also recommends podcasts such as Listen Money Matters and ElleVate Podcast, and websites such as SmartAsset and NerdWallet.

Going one step further, if you have high credit card balances that you’re unable to pay in full each month, stop using them and stick to an all-cash diet. And if student loans are the bane of your existence, try making additional payments toward the principal loan balance a week or so after your scheduled payments. From there, address your needs, develop a monthly budget, and cancel any subscriptions you’re not really using.

Monahan also recommends finding a financial accountability partner, scheduling regular check-ins, and setting aside time each week (whether it’s 30 minutes or a full day) to sit down and plan your finances for the weeks ahead: “A little bit of planning can be the key to get you more comfortable with money coming in and out of your life, while staying on track toward achieving goals that are important to you.”

Archuleta suggests focusing on setting realistic goals, and then breaking those down into doable tasks and smaller, more manageable steps. The more tasks you complete, the more confidence you will build. The key here is consistency, she says. “You have to identify ways that work for you and then consistently implement them for many months.” You may find that you need to seek professional help, such as a financial planner, counselor, coach, or therapist, and that is totally fine. Additionally, in Archuleta’s practice, she suggests setting goals that are SMART: Specific, Measurable, Attainable, Relevant, and Time-sensitive.

Natasha Knox, a certified financial planner, encourages those who are dealing with financial anxiety to start by making a list of every single “what if” that causes them stress, as this can help to get you out of your head. Knox recommends categorizing each “what if” as likely, possible, or unlikely and then devising a strategy for tackling each one according to what is deemed a top priority. “The whole list doesn’t have to be figured out at once.  Start by formulating a plan to address the items that are urgent,” she says. If you’re new to financial goal setting, it can be helpful to focus on short-term goals across six to 12 months and make sure the goals are authentically important to you and congruent with your personal values.

Keep in mind that resolving your money issues won’t happen overnight. In fact, it’s likely something you’ll be working on throughout your entire life. So avoid blaming yourself, and instead approach your finances with a mindset rooted in curiosity and self-compassion. Learn from your money mistakes and practice self-forgiveness. The more confidence and self-awareness we build, the more we become aware of the patterns and behaviors that are holding us back. And last but not least, don’t be afraid to get help.

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