Financial anxiety is a feeling of worry, fear, or unease about your finances. Learn to read your body's responses to conversations about money, and set regular money check-ins to keep financial anxiety under control.
Are you experiencing too much strain when it comes to your finances? The Covid-19 pandemic has made it hard for people to seek answers about their financial futures, and many financial planners are underestimating the financial anxiety that is causing.
Financial anxiety happens when you have money, a job and all the hallmarks of financial security, but still worry that something bad is going to happen. For many people, the constant weight of that anxiety could be worse than a negative event that could be happening. Here are three signs of Financial Anxiety and how Agemy Financial Strategies can help you get back on track to finding answers to your financial futures.
1. You’re Just Scraping By
The Covid-19 Pandemic left more people living paycheck to paycheck. It’s understandable to be anxious if you’re not sure whether you’ll be able to pay your bills. Or, maybe you’re not even sure if you’ll be able to buy groceries for the week. If you’re in a financial state that requires you to depend on every penny from every paycheck, you’re bound to experience anxiety.
The biggest problem with this type of anxiety is that it might continue to grow as you near the end of your budget every pay period. That keeps you in a constant cycle of anxiety, which can wreak havoc on your system. The best thing you can do to combat financial stress is to get your finances in order. You could see a financial planner, set a budget, or work out a savings plan with your bank.
Financial planners can help ease their clients’ financial anxieties by including a questionnaire on the topic in their client intake process and by undergoing training to help them better identify and manage these situations as they come up. At the end of the day Financial planners are there to help you get back on track and by answering the questionnaires truthfully they’ll be able to get a better understanding of your financial situation.
2. You Overspend
It might seem counterintuitive, but a lot of people actually spend more money when they’re under heavy financial stress. It can help to ease their worries for a while. When you buy something new that you enjoy, you can temporarily push aside feelings of anxiety. As you might expect, though, those “good” feelings don’t last long. The more you spend, the more your financial woes will grow. And those fears will continue to grow along with them.
Keeping your spending habits in check is one of the best things you can do to combat the anxiety caused by financial stress. To get started, look at your bank statement for the last month. Note down all of your income streams and group them together. Then, split your expenses into two categories: fixed and variable costs. Fixed costs include expenditures that are difficult to change such as your rent, utility bills, and any debt repayments. Your variable costs include your payments that are easier to adapt such as money spent on groceries, subscriptions services, and clothing. From here you’ll be able to see:
- If you have more money going out of your account than coming in every month
- Any areas where you’re overspending
3. You Have Strained Relationships
We hear it all the time…one of the main causes of divorce is money. It’s not necessarily the money itself that causes it but the behaviors around money that create tension in relationships. This tension can cause too much strain over time and result in divorce. Therefore, it’s best to be able to recognize signs ahead of time that you or your spouse may be under financial stress.
No matter how close the couple is or how long the relationship has spanned, no couple see EXACT eye to eye when it comes to finances. For example, one spouse could have had a childhood of watching their parents overspend or worrying about bills, or having to shut down a family business. Whereas the other spouse could have had a much more stable and privileged upbringing - alas causing them to see money management differently. The answer? Communication. Creating a household money “practice,” or getting into the habit of regularly checking in with your finances as a couple, is the simplest way to shape a relationship with your money, and your partner.
Here are some further recommendations on how to help ease the anxiety.
Identify Areas Where You Can Save
If your outgoing expenses exceed your income, don’t worry. You can either decrease your spending in certain areas or, if possible, focus on bringing in some extra income each month. You can even decide to do both, but it’s important not to overwhelm yourself when creating better financial habits—especially at the beginning.
Once you’ve identified areas where you’re overspending, you’ll have a clear indicator of where you should start cutting back. Beyond that, the easiest place to begin reducing your expenditures is your variable costs. However, if you want to make some more drastic savings, you can consider targeting your fixed costs. This means, for example, finding ways to save on rent or utility bills.
Create A Budget
Next, it’s time to decide how much money you want to save each month and to create a budget to support that goal. As you begin to make changes that free up some extra money, you’ll get an idea of how much you can start to put towards a savings fund.
Adopting a savings mentality can take a little while to get used to, but it’s all about taking small, consistent steps towards your goal. One of the best tools against financial anxiety is having a solid budget helps you navigate your finances and keeps your financial health in check. From here, you can start making some smarter, forward-thinking financial decisions.
This could include saving for an emergency fund or contributing towards your pension. By creating a buffer between you and life’s surprises, you prevent your future self from spiraling into financial stress—you’ll certainly thank yourself for it later!
Explore Your Mental Health
Think: What is my anxiety trying to tell me?
A body check-in teaches people how to step to the side and be able to observe and witness more of what’s going on so we’re not so consumed with it. Start paying attention to your emotions and how your body reacts when you discuss money or make financial decisions. How do you feel when you check account balances online? What about when you share information about your latest investments with a loved one? Identifying financial anxiety triggers will help you consider what is in the conversation that is triggering these feelings. Is it how you communicate with your partner? Are you feeling guilty or ashamed?
Take a step back and work on observing emotions rather than working off of them.
Schedule Regular Money Check-ins with Agemy Financial Strategies
One of the keys to a sound financial strategy is spending less than you take in, and then finding a way to put your excess to work. A money management approach involves creating budgets to understand and make decisions about where your money is going. It also involves knowing where you may be able to put your excess cash to work.
A Fiduciary is a person or organization that acts on behalf of a person or persons and is legally bound to act solely in their best interests. As Fiduciaries, the advisors at Agemy Financial Strategies only have your best intentions at heart.
Scheduling time with us (or your chosen advisor) to address finances and help you focus on immediate actions to see where you are overspending - or where to invest your money. Start by sharing money stories with us, how you're feeling and then move on to discussing values and how they show up in the way you save, spend or invest. The goal of these conversations is to help you understand your feelings about money — an important step toward getting on the same page and easing financial anxiety for yourself, and for your family.
Money Management and Financial Anxiety go hand in hand when managing different aspects of your personal finances. At Agemy Financial Strategies, our job is to help ease those feelings of financial anxiety and help you improve your money management skills by regularly evaluating your current money management plan and making necessary changes that make sense for you.
When you create a roadmap of where you want to go, there will be changes along the way. At Agemy Financial Strategies, our team of financial advisors are here to help you through those changes and to help you understand the ins and outs of money management.