What Is Financial Anxiety?
What You Need to Know About Financial Anxiety
Financial anxiety isn't about how much money you earn or have. Your relationship with money is shaped by your experiences, beliefs, and nervous system, not just your bank account.
Financial anxiety is emotional and physical. It can show up when you think about, talk about, or make decisions with your finances.
You can learn to cope. Understanding the emotional side of money, building foundational personal finance skills, and practicing self-compassion can help you feel more confident and less overwhelmed.
Understand Financial Anxiety
Financial anxiety is one of the most common concerns I hear about as a financial therapist. And despite what social media might tell you, it isn't reserved for people living paycheck to paycheck. Financial anxiety is feeling nervous, worried, or on edge when thinking about or interacting with your money. Financial anxiety isn't recognizable in the DSM as a diagnosis. Still, it is something that financial planners, behavioral economists, and financial therapists are starting to recognize and address, even if it isn't officially a diagnosis.
The problem that I see with the way most people talk about financial anxiety is that they prescribe "getting good with money" as the antidote. As in "if you have a budget, your anxiety will go away." I'm here as a financial therapist to tell you that anyone can experience financial anxiety, regardless of how much money they have or earn, and that even the best budget in the world won't cure financial anxiety. Why? Because money is highly emotional, and assuming that our emotions will quiet down with a spreadsheet is naive. Yes, understanding the basics of finance and feeling in control of money help with financial anxiety, but coping with financial anxiety requires a more nuanced approach.
How is Financial Anxiety Different than Traditional Anxiety?
All humans experience anxiety. Anxiety is a normal, healthy reaction to a stressor that might look like worry or apprehension. Healthy anxiety is time-limited, meaning it quiets down after the stressor ends. An example of a healthy anxiety response would be your heart rate increasing and your throat getting a bit tight when you give a presentation at work, but it fades once you finish presenting.
Clinical anxiety is an overly excessive response compared to the stressor and impacts a person's ability to function. Clinical anxiety is distressing and gets in the way of a person being able to live their lives fully. Please note--you cannot diagnose yourself with clinical anxiety. If you are concerned that your anxiety may be tipping from healthy and time-limited into clinical, see your primary care provider for a mental health evaluation and referral.
Financial anxiety, on the other hand, is anxiety specific to money-related things. A person who experiences financial anxiety would experience it only within the context of thinking about or engaging with their finances. In traditional anxiety, anything--or nothing--can be a source of anxiety.
What Causes Financial Anxiety?
There isn't one single cause of financial anxiety. Most people's money worries come from a combination of personal experiences, family messages about money, and the larger systems we live in.
For some people, financial anxiety starts after a difficult life event like losing a job, going through a divorce, taking on medical debt, or graduating with student loans. For others, it develops more after years of hearing messages like "money doesn't grow on trees," "you're bad with money," or "we can't afford that."
Sometimes nothing "bad" has happened at all. Living through periods of economic uncertainty, inflation, layoffs, or constantly consuming financial advice online can leave your nervous system on high alert.
Financial Anxiety Symptoms
How financial anxiety shows up or financial anxiety symptoms vary from person to person. In addition to financially anxious thoughts, financial anxiety can include physical symptoms such as a racing heart, difficulty breathing, nausea, tingling, sweating, and dizziness. When left unattended, financial anxiety can lead to making unwise financial decisions to "just get it done," putting off taking important action steps on financial tasks, or avoiding engaging with money.
Financial anxiety can look like this:
Second-guessing yourself after you make a 401(k) index fund selection.
The pit in your stomach when the bill comes at a dinner with friends.
The avoidance you have when your partner wants to talk about household bills with you.
Can You Have Financial Anxiety Even If You Have Money?
One of the biggest myths about financial anxiety is that it disappears once you earn more money. In reality, I've worked with people across a wide range of incomes who experience financial anxiety. This is something I see all the time with the “Doomsday Prepper” archetype (not sure your financial archetype? Take the free quiz here to find out!).
Higher income doesn't automatically create emotional safety. In fact, more money can sometimes create new worries. People may fear making the wrong investment decision, worry they'll lose everything they've built, or feel intense pressure to make the "right" financial choices because they believe they no longer have an excuse to make mistakes.
That's why I encourage people to stop measuring financial wellness solely by the balance in their bank account. Financial wellness also includes feeling capable, informed, and emotionally supported when making money decisions.
Anxiety About Spending & Saving Money
Many people have anxiety about what to do with their money. Most commonly, I see people experience anxiety about spending their money and about saving their money.
When a person experiences financial anxiety about spending, they might worry that they have to research "the best" thing before making a person. They might stress that they didn't get a good deal on a purchase. They might worry that if they spend money, they won't be able to stop.
When a person experiences financial anxiety over saving, they might worry that they can't "save enough." They might stress that they don't know how to save. They might fear that they put their money in the wrong type of savings account.
Transforming Your Relationship With Money
To cope with financial anxiety, I invite you to reframe your relationship with money. I have a whole separate blog post on transforming your relationship with money that you can read here. In a nutshell, your relationship with money is fluid. This means it can change over time. The way you think about money, sometimes referred to as “money mindset” or your relationship with money, is shaped by many factors. It's informed by your personal beliefs, the ways your family and friends view money, how money is seen in your community, and policies and culture. If your view of money is causing you anxiety, see what happens if you try to reframe your view. For example, if you think, "I'll never understand money," what happens if you reframe that thought to "I'm working on understanding money?"
Personal Finance 101 to Help Financial Anxiety
Another key component of coping with financial anxiety is understanding the basics of personal finance. In my mind, there are three "pillars" of personal finance folks should know. The first is knowing how much money is coming in and going out each month, ensuring that they have enough money to cover all necessary expenses. This is also known as a "budget," or my preferred term, a "spending plan."
The second pillar is having money for short-term needs. Think of an emergency fund you can draw on if you lose your job or have to stay home with a sick child, as well as other short-term savings goals, like saving for a vacation or a new car.
The third pillar of personal finance is investing in your future. This can include investing in retirement, paying down student loan debt, and getting a will and trust in place. Of course, there are nuances among these pillars, but it helps to boil it down to the basics of personal finance.
Notice that none of those pillars require perfection. You don't have to build the perfect budget, save the perfect amount, or invest at exactly the right moment to improve your financial well-being. If you want help getting started with the basics of money, check out this blog post.
Financial Anxiety
Now you know that financial anxiety is an anxiety response to the stress of interacting with or thinking about money. It can't be cured by downloading a personal finance app or by having a certain dollar amount in the bank. The more you understand how your nervous system, your money story, and your financial habits work together, the easier it becomes to make sustainable choices that feel good.
Want more about financial anxiety? Consider buying a copy of my book The Financial Anxiety Solution for more down-to-earth tips and ideas on coping with financial anxiety.
And if you're part of a workplace, university, healthcare organization, or conference looking to support the financial well-being of your employees or audience, I'd love to help. Through interactive workshops and keynote presentations, I teach people how to better understand the emotional side of money so they can feel more confident, connected, and capable with their finances.