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In 2019, I had the pleasure of working with a client who’s a financial therapist. She uses psychology to help bread-winning women say f**k it to patriarchal viewpoints and financial anxiety.
I learned a lot from working with her, and it really made me examine my own relationship with money. For example, I have a lot of bad money habits stemming from my anxiety, as I’m sure we all do:
- I get too caught up in the “what ifs?” to plan for my financial future by saving; instead, I just worry about it and hope it will all work out.
- Looking at my bank statements makes me anxious, so I’m often too scared to check my account for errors.
- I’ve even maxed out my credit cards because I thought buying something would be the “magic solution” for my anxiety. (I’m looking at you, $150 yoga pass I used twice.)
Thankfully, I also learned some ways I could reduce that financial anxiety by reading her blog and watching her videos. Combined with the research I did for this article, I’ve come a long way in the past year when it comes to understanding my money and conquering financial anxiety.
By no means have I cured my financial anxiety, but I have learned a tip or two that I think will help you get to a better place when it comes to your money! Here’s some of my best advice when it comes to reducing financial anxiety, and what you can do to better plan for your financial future….
What is Financial Anxiety?
Financial anxiety: 85% of Americans have it to some degree. But that doesn’t say much about what it is…. or why we should care about it enough to read an entire blog post about it!
About 2/3 of Americans report that money is their largest source of stress — enough so that therapists have coined the colloquial term “money anxiety disorder” to explain the phenomenon.
According to credit reporting company Experian, the following symptoms might be signs that you suffer from financial anxiety:
- Overspending. You get stuck in a vicious cycle of being anxious about money, enjoying the release of a shopping spree and digging yourself into a deep hole of guilt (and potentially debt).
- Hoarding. You’re so afraid of what could happen that you’re excessively frugal, to the point where you might have storage unit full of stuff you “might” need someday.
- Dishonesty. Are you covering up your credit card bills, hiding an account from your spouse or otherwise lying about your spending or saving habits? You might be committing something called “financial infidelity.”
- Generalized anxiety. Sometimes, our money worries can become so overpowering that they overshadow everything else in our life. You might find yourself on edge most of the time, even about things that have nothing to do with your wallet.
Challenging Your Money Worries
So, how can you get to work challenging those money worries and getting back to being your badass self? My client Lindsay wrote a blog post where she shared an exercise from her upcoming book, The Financial Anxiety Solution, on how you can challenge your fears about money.
The exercise is based in the principles of cognitive-behavioral therapy, or CBT — a form of therapy commonly used to treat anxiety. Here’s how it works:
Step One: Choose an anxiety-inducing thought you have about money. For example, “I’m too dumb to understand investing.”
Step Two: Examine the evidence for and against your thought. This is kind of like making a pro/con list: for example, if you previously made an investing mistake, put that on the mental “con” list. If you rocked your college finance class, put that on the “pro” list.
Step Three: At the end, reexamine your original thought. Does it still make sense given the number of pros and cons against the thought? Chances are, the answer will be “no.”
Once you learn to let go of the false, limiting beliefs you hold about your relationship with finances, you’ll soon find your financial anxiety lessened enough to start making smarter decisions with your money!
Prepping for Your Worst Case Scenario (feat. Ellevest!)
As I mentioned previously, financial anxiety often fuels our bad money behaviors; it can lead to overspending, hoarding, being miserly or avoiding planning for the future. Changing our thoughts can help change our behaviors — but so can learning to change those behaviors that are part of the cycle of financial anxiety.
One thing that has helped me tremendously in learning to tackle my financial anxiety is taking control of my financial future — and by that I mean starting an investment account with Ellevest. (I’m not paid to promote Ellevest, but I love it enough that I’d definitely take a deal! #sponsorme)
Ellevest is a financial investment app by women, for women. It offers easy investment portfolios with the option to transfer money automatically every month, helping you save without thinking about it. Plus, you can opt into their Impact Portfolio, which benefits women-owned companies to help empower women around the globe.
Sign up for Ellevest by clicking here and you’ll receive $20 in credit toward your first investment!