Each week we ask a question to help you focus on an area of your finances that might need a closer look. This week: How can I reduce my money anxiety?
It will come as a surprise to precisely no one that general money stress has ramped up over the past couple of years. Despite our economy being relatively stable, more people are reporting feeling anxious about money.
It’s mostly to do with the increase in general stress levels we’ve all experienced. The bushfires, the pandemic, the floods – life feels incredibly fragile right now.
“There are many factors right now that can impact financial anxiety, including the pandemic and recent natural disasters, as well as rising inflation and geopolitical events,” says Andrew Dunbar, YMYL contributor and director and senior financial adviser at Apt Wealth. “We find that no matter a person’s financial position, everyone has money worries, which are often heightened at times of crisis.”
The changes, the uncertainty, the constant ‘pivoting’ required to navigate the past couple of years have ramped up overall anxiety levels. How we feel about our money is very much tied to that.
You’re not alone
“In challenging times, whether personal, local or global, we see an increase in people reaching out for financial advice,” says Dunbar.
The latest figures from the NAB Wellbeing Survey show that while most Australians have rebounded well from the effects of the pandemic, there is a growing divide between the financial wellbeing between high and low income earners. Debt makes no distinction, however, as three-quarters of Australians report being challenged by debt, with pay day and BNPL loans being the biggest drivers of stress.
Money anxiety doesn’t just happen to people in huge amounts of debt, either. There doesn’t necessarily need to be a ‘reason’ for feeling twitchy about your financial status.
Even though you’re more stressed about your finances than the numbers would suggest you should be, it doesn’t mean you should dismiss the way you feel. If money is consuming your thinking or is getting in the way of your relationships or enjoyment of life, then you have money anxiety, regardless of your status.
If you’re feeling anxious, don’t just lie awake at night fretting – get some help.
The first step to reduce your money anxiety is to call someone who can help.
The National Debt Helpline offers free financial counselling for anyone in financial trouble. You can also receive counselling through many charities, including The Salvos, Wesley Mission and Anglicare.
A good financial planner can also help you take a look at your incomings and outgoings and formulate a plan to get a gap between the two. “Financial advice not only helps you get and stay on track with your finances, but it also has a raft of personal benefits, from increased peace of mind to lowering stress levels,” Dunbar explains.
If you’re not actually in debt, but still experiencing debilitating money anxiety, it’s worth asking your doctor for a referral to a psychologist. They’ll work though your anxiety with you and teach you techniques to control the physical symptoms (racing heart and rapid breathing are two of them).
For most of us, our money anxiety will be more niggling low-grade stress than full-blown actual anxiety. If that’s you, then try some of these tactics to put a lid on things.
If you’re feeling anxious about your finances, there’s going to be an underlying reason(s) for it. Knowing what those reasons are is key to reducing your stress levels.
1. Is it really about the money?
Because our money is so closely tied to our security and feelings of wellbeing, feeling uncertain about life in general can manifest itself as money anxiety.
Sometimes it’s actually easier to fret about your debts than fix your relationships, work situation, FOMO or health issues.
So, it’s time for a hard look in the mirror – what’s currently going on in your life? What’s bothering you? What are you fearful about? What do you need to change in order to feel safer? Facing your issues is the first step to erasing them.
If you need help answering questions like these, please talk to someone.
- Immediate crisis support: Lifeline
- Debt help: National Debt Helpline
- Depression and anxiety: Beyond Blue
- Gambling problems: Gamblers Anonymous Australia
- General mental health support: Head to Health
2. Is your stress long-term or short-term?
It’s perfectly normal to feel stressed when a large, unexpected bill drops in your lap. Bill shock is very unsettling. Compare Club’s June 2021 Bill Shock Index showed that a whopping 73 per cent of Australians had experienced bill shock within the past three months.
In fact, mobile phone bill shock is so common that the AMTA (Australian Mobile Telecommunications Industry) has put out a fact sheet on surviving it.
Other common sources of bill shock include specialist medical fees, higher than expected energy bills and car repairs.
“If you are facing immediate difficulties, look at your upcoming outgoings and bills, and reach out to your providers if you have concerns about meeting them,” Dunbar advises. “Hardship clauses exist to support people facing challenges, and there is no shame in using them to give you breathing space to consider your next move.”
All of the above generally produce short-term money anxiety. You get the bill, you feel intense stress about how you’re going to pay it, you make a plan to repay the bill, you take steps to make sure it doesn’t happen again, your stress reduces.
This should help:
- How to effectively manage your bills
- 5 ways to negotiate a better deal and save plenty of money
- Getting the best deal on your mobile phone
Longer-term money anxiety is usually the result of ongoing debt or fear about the future. It’s what happens when you can’t see a way out of your situation, or you keep stuffing up your finances over and over. Usually by doing the thing you promised you wouldn’t do last time you found yourself in this exact-same situation. Sound familiar?
There’s a lot you can do to reduce these feelings, and it can be easier than you might expect.
3. Have you tried to fix things?
Often we dwell on situations we have no control over, but money isn’t actually one of them. We do have control over our money, no matter how out of our depth we sometimes feel.
If you’re in debt or you’re worried about financing your future, you can take steps to change your circumstances. But it will require you to change. That can be a scary concept for many, but it doesn’t have to be overwhelming.
Often the very act of drafting up a financial plan is enough to significantly reduce stress levels. It can be as simple as taking stock of four key areas: your debts, your spending, your income and your future.
Reduce your debt
- Money focus: How can I get out of debt?
- Change your debt mindset and change your life
- It’s time to break free from the debt cycle once and for all
- Start a debt avalanche to blast your way to financial freedom
- Everything you need to know about debt consolidation
Control your spending
- 5 steps to align your values and your spending habits
- 3 simple tips to stop overspending
- 101 frugal tips to help you live a richer life
- Are you honest with your partner about your spending habits?
- How to spend less on socialising so you can do more of it
Increase your income
- Money focus: How can I make more money?
- Active or passive investing: which one suits your style?
- 7 ways to earn extra cash
- How retirees can supplement their retirement income online
- How can absolute beginners get started investing?
Plan for the future
- Future You wants you to save more
- Why you’ll probably be poor in retirement
- How to make an extra $1 million before you retire
- 4 key things you need to do to maximise your superannuation
- How much super should you have by now?
4. Are you taking care of yourself?
Look after your health and you’ll be better able to look after your finances. All the usual suspects are mandatory here:
- Eat a well-balanced, wholefood diet
- Move every day, preferably often
- Spend time with people you love
- Get a good night’s sleep
Talk to your health practitioner if you’re stumbling in any of these areas. Without proper attention to your overall health, it will most likely feel very difficult to make the changes you need to eliminate your money anxiety for good.
Just as you have routine check ups with your doctor or dentist, put a regular time in the diary to check up on your finances.
“Know where your money is going at a micro-level,” says Dunbar. “Always the number one financial rule.”
Find the rest of our Money Focus series here.