Key takeaways

  1. Acknowledge your feelings about money; don’t minimize them
  2. There’s no shame in feeling financial stress; many people do
  3. Find the root cause of your financial stress
  4. Understand that your anxiety is temporary: you won’t always feel this way
  5. Talk to a skilled, non-judgmental professional about your feelings

Even when you have a dynamic financial plan or are working with a financial planner, thinking about your finances can still make you anxious. 

Whether you lay in bed worrying that inflation will eat up your cash or wonder if Social Security will be there for you or your children, you’re certainly not alone. 

Our mental health is closely tied to how we feel about our finances. 

For example, a recent survey by the American Psychological Association showed that fear of inflation is the leading cause of stress in America: 87% of adults listed inflation as their biggest worry. 

In another survey, 90% said that money is a cause of stress, and less than 25% of adults feel confident about their financial health. 

Almost as many, 73%, said money is the leading cause of stress

If you’re already working with a financial planner, you’re on the right path, but you can still do plenty more to optimize your lifestyle.

While you know that you may not be the only one losing sleep over financial worries, they can still be a stressor. 

The good news is that there are proven ways to reduce financial stress and transform your financial situation to live a more fulfilling life. 

Acknowledge your feelings 

All too often, we tell ourselves what we “should” feel. For example, you might say, “I have plenty in my savings account and emergency fund, so I should feel secure,” or “I’m putting 10% of my paycheck into my 401(k), so I should feel good about my retirement.” 

In reality, we feel what we feel, and there’s nothing wrong with that. When we say, “This is the way I should feel,” rather than saying, “This is how I actually feel,” we are, in essence, telling ourselves that our feelings aren’t valid or are “wrong” if we don’t feel a certain way.

How to acknowledge your financial anxieties 

Instead of denying or minimizing your money concerns, acknowledge them. Here’s how.

  • Write in your journal
  • Express your nervousness to a partner, family member, friend, or even your financial planner
  • List the top 3-5 things that are keeping you from overcoming financial stress 

There’s nothing wrong or shameful about feeling nervous about money; many people feel that way.

But don’t stop there. Once you acknowledge your feelings, recognize that they are temporary. 

How you feel now isn’t the way you’ll always feel. 

Use these two magic words to change your state of mind

Tweak how you express your feelings by adding two words: “right now.” Say to yourself, “I’m anxious about what inflation will do to my savings right now,” or, “Right now, I worry that Social Security won’t be there for me.”

This minor adjustment will help you recognize two things:

  • Your feelings will change, quite possibly for the better
  • You have the power to change your circumstances, your attitude, or both to change your feelings about how you deal with financial stress

Identify what’s causing your financial stress

Financial stress comes from somewhere and often comes from lessons we learned in the past. 

Many of our attitudes about money were formed by age seven. If we grew up in a household where money was tight, or our finances were uncertain, we tend to carry those attitudes and experiences into adulthood.

Conversely, if your parents were well off or never talked about money, you may have never learned everything you needed to know because there were other priorities.

For some people, anxiety about money isn’t even about money, per se. For example, someone may feel uncertain about their future or feel as if much of their life isn’t under their control, making them anxious about some aspect of their financial health

Understanding what’s behind your feelings can be an excellent first step toward understanding and managing them.

Don’t compare yourself to others

One factor that can add to financial stress is comparing our financial situation to our perception of others. 

Because money is a subject most people aren’t comfortable discussing, we tend to judge other people’s finances by what we see: their home(s), cars, vacations, and other spending. 

We have no idea unless we feel close enough to discuss each other’s finances in-depth. 

They may have lots of debt or none at all. They may have little retirement savings or a seven-figure 401(k). You have no way of knowing. But ultimately, even that understanding likely won’t help ease your anxiety. 

Wondering why your neighbors don’t appear to worry about money like you do is pointless. Their financial anxiety, or lack thereof, has nothing to do with you. 

Remember, too, that what’s important to you may differ greatly from their priorities. 

They may have dreamed about a nice home or fancy car and worked towards that. Your financial dream may be very different, like feeling financially secure or having your children graduate from college without debt. 

Not all financial dreams and accomplishments are transparent to others.

Take action

If your financial stress is affecting other areas of your life, or making it difficult for you to make financial decisions, one of the best things you can do is take small bite-sized steps to address what’s causing your money stress. Here are four great options.

  1. Pursue stress-reducing strategies. Activities such as exercise, yoga, meditation, hiking, or even just enjoying a walk or taking time for yourself will significantly benefit your mental and physical health.
  2. Talk to a therapist. A licensed professional can help uncover the root of your concerns and offer tools to mitigate and manage financial stress. Just talking to someone who can listen without judgment can be beneficial.
  3. Pinpoint the root of your anxiety. It could be any number of things: debt, inflation, Social Security, the stock market, or any other financial topic. A deeper understanding of these stressors will often help you identify where to prioritize your efforts.
  4. Find the right financial planner. To achieve the industry’s gold standard financial designation, CFP® Professional now requires in-depth knowledge about the psychology of money.

Final word

All Facet financial planners are CFP® Professionals, and many conversations with clients are much more about feelings and attitudes than investments or debt. 

Review your financial planning together. Understand how your portfolio is designed to perform regardless of inflation or what the stock market does.

A good financial planner won’t judge or criticize. They want you to feel financially secure as much as you do. They’ll be happy to learn they’re helping you sleep better at night.