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

Between a global pandemic and skyrocketing inflation, making ends meet and staying out of debt is no small challenge for Americans. Here's how to deal with the money stress.

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, and this is especially true on the heels of a global pandemic that created massive unemployment and financial hardship.

The Congressional Research Service reports that at the height of the pandemic, unemployment rose rapidly to a peak of 14.7 percent in April 2020. That figure is the highest unemployment rate this country has witnessed since the Great Depression, and was worse than the peak unemployment rates of the 2007 through 2009 Great Recession.

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Though we are two years on from these unemployment peaks, Americans are no less frazzled about finances—especially now that inflation is skyrocketing and making it more difficult to pay for everything from groceries to gas and monthly heating and electric bills.

One reason money can make us feel so anxiety-ridden? It's linked in our minds to our very survival. "Money is really a resource that can provide people with a sense of safety and security," Chloe Carmichael, PhD, a New York City-based psychologist, tells Health. "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, Matt Lundquist, LCSW, a psychotherapist at Tribeca Therapy in New York City, tells Health.

"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, and feeling nervous about an 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 assuage financial stress.

Create a plan

A psychotherapist and author of four books on mental strength, Amy Morin has delivered many talks about the link between financial health and mental health. She says being in debt puts individuals at three times greater risk of depression. What's more, those who contemplate suicide are more likely to be in debt, says Morin. One of the most fundamental ways to tackle such negative feelings head-on and make sure they don't get the best of you? Develop a plan of action.

"Developing a clear plan can help you take control over your financial situation—and when you feel empowered, your anxiety will go down and your motivation will increase," Morin, who is also editor-in-chief of Verywell Mind, tells Health. "Your plan may include reducing your spending and increasing your income. It should also involve establishing a monthly budget and a clear plan for paying off debt."

As you figure out your plan, it's a good idea to address the stressors that are taking the biggest emotional toll on you, Celia Mion-Araoz, a licensed mental health counselor for Community Health of South Florida Inc. who works with patients experiencing stress from financial anxiety, tells Health.

"Create a hierarchical list of the bills, payments, or costs that need addressing—from most urgent to least urgent," Mion-Araoz says. "Prioritization is a key first step, so that you can wrap your head around a larger problem, break it down, and thereby gain a sense of control of it, which in turn 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

Once you've developed a hierarchical list of financial priorities, create a list of attainable payment goals and a practical plan for knocking each item off your list, starting from the top and working your way down.

"Again, the idea here is to begin to break the financial stressors down into smaller parts, focusing on what's most important first and addressing concerns sequentially as opposed to all at once," says Mion-Araoz. "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

Money affects every domain of our lives, and the emotions money brings up—both good and bad—have a powerful influence over us, Julie Elledge, PhD, founder and CEO of Mentor Agility, tells Health. Yet individuals are offered very little guidance to deal with these feelings, and there are few socially accepted ways for talking about the emotions surrounding finances. Learning to recognize and openly discuss money concerns is another important step toward addressing anxiety.

"Discussing money is so tied up with complex emotions: shame, success, fear of failure, status, power, control, and self-worth," Elledge says. "Learning how to recognize those emotions, then talk about them, allows us to minimize the grip that finances have on our well-being."

As for who you might talk to about these feelings, Elledge suggests either a life partner (though the discussion may bring up very strong emotions) or alternatively a financial wellness coach.

"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," explains Elledge.

This type of professional can also help you rewrite what you feel is an 'underachieving narrative,' transforming it into a motivational story, adds Elledge. This is often accomplished by storytelling techniques that help a client manage disparate and strong emotions into a cohesive narrative thread. "Then, talk to your financial advisor and let him or her help you manage the resources to bring your story to its successful outcome," suggests Elledge.

Schedule time to worry

When it comes to life and finances, many things are out of your control. You can't control the economy, and you generally don't have much control over whether you get a raise. Furthermore, worrying about these things wastes time and energy. Rather than let concern about these challenges permeate your entire waking life, try to contain your worrying to just 15 minutes a day by actually scheduling time to worry. Yes, this may sound a bit unusual, but there's a good reason for doing so.

"With practice, research shows you can learn to train your brain to worry during your scheduled time only," says Morin. "This will free up your time and energy to focus on taking action throughout the day, rather than worrying about things you can't control."

To get started with this habit, set aside time, say 10-20 minutes tops,to sit and worry, explains Morin. Set a countdown clock on your phone, and when your time is up, force yourself to do something else.

Continue contributing to savings

Speaking of worrying, it's not unusual to be anxious about longer-term goals like saving money for retirement or having enough money for a 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."

Reinforce your sense of job security

Will I lose my job? Will my business be successful this year? Work worries are another element of financial stress, says Lundquist. "This fear tends to be historical," he adds. "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."

Don't let salary define your worth

How much money you earn 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. If your career isn't giving you that sense of fulfillment and a higher salary is a priority, 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.

Change up your spending to address debt more aggressively

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.

Another good idea is to have an "accountability partner" who will regularly review your spending. This can be a financial counselor, therapist, or even a 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," Carmichael adds. She notes that some of the biggest issues arise when people don't plan ahead for big expenses, such as an upcoming vacation.

Find inspiring stories of people getting out of debt

Your social media feed and the IRL conversations you have with people are often focused on possessions and things—like someone's new car or the new gadget they just purchased.

Hearing about these possessions can cause you to feel bad and [may even] tempt you to spend money on things you can't afford," says Morin. "Instead, look for people who are celebrating the fact that they're paying off their bills. There are plenty of online forums and communities filled with people who are intent on getting out of debt. Watching others get excited about paying off their loans—as opposed to spending more money—can help you get excited about saving."

Make impulse spending harder to access

If you're the type of person who is prone to making impulse purchases or you shop online a lot, try protecting yourself from temptation by making these behaviors harder to engage in, says Morin.

"Only carry a certain amount of cash with you in the store, or don't save your credit card information to your computer (and store your credit card out of sight)," says Morin. "These little obstacles can go a long way toward helping you stay on track with your financial goals."

Avoid turning to unhealthy habits

Financial stress, like any form of stress, can trigger the impulse to turn to alcohol or drugs as an escape. or even to gambling in a misguided hope of solving one's financial problems. Inevitably, though, these habits cost you even more money, and of course they impact your health.

"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 without incurring additional costs, as unhealthy activities tend to do," says Mion-Araoz.

If you are feeling an overwhelming temptation to turn to substance abuse, then it is important to reach out to a mental health professional.

Stop 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."

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