Money. It’s a huge source of stress for so many of us juggling credit card bills and battling student loan debt while attempting to stick to something resembling a monthly budget. If thinking about your finances makes you feel nauseous, you might be facing financial anxiety.
I’ve been there. For me, credit cards served as a massive source of financial anxiety, as I repeatedly got myself into debt across several years. My financial situation came with an extra side of shame, because most of it resulted from buying things I didn’t really, truly need. It wasn’t debt from a student loan that was an investment in my future, or unavoidable debt from a medical emergency. It was meals out, shoes, and clothes that I couldn’t afford.
Eventually, I dug my way out of debt. However, my financial anxiety decreased significantly before I paid off those bills. And now, I love talking about personal finance and financial well-being so much that I’ve made supporting women with money a personal mission. I’d like to share a few of the techniques that I’ve learned along the way to help reduce and manage financial anxiety and cultivate financial well-being.
6 Strategies for Coping with Financial Anxiety
1. Recognize you’re not alone.
Study after study highlights the money-related stresses that we face. For example:
• The Center for Financial Services Innovation reported that 48% of Americans said their expenses are equal to or greater than their income, causing them a significant amount of stress.
• The American Psychological Association found that 62% of Americans stress over money, the second-highest factor taking a toll on their mental health (right behind the future of our nation).
• Fewer than half of the women surveyed by Ellevest, a digital investing platform for women, feel satisfied with their own personal finance knowledge. This means that you’re likely not alone in feeling some financial distress, even among your best girlfriends and the gorgeous, filtered Instagram feeds you obsess over.
2. Since you’re not alone, start talking about money.
Yup, you heard me. Listen, we talk to our best girlfriends about our hopes and dreams, relationships and breakups...but too many of us are fearful to talk about money with our closest friends.
A Fidelity study found that 92% of women want to learn more about financial planning, but eight in 10 "confess they have refrained at some point from talking about their finances with those they are close to.” Women report that talking about money is “too personal.”
I’ve found that money is something we’re dying to discuss. Start small: Share this post, or mention you’re trying to get even stronger with your personal finance habits and put your financial problems to rest this year. Keep a keen eye out for which women lean into the discussion, and keep it going, sharing as much detail about your stress and anxiety regarding your financial worries as you feel comfortable.
With your closest pals, you can be direct, letting them know that you're financially stressed and that you’re looking for some ideas and support. The data suggest that most of your friends are facing similar challenges and would welcome the discussion.
3. Pinpoint the sources of your financial anxiety.
If you don’t know why you’re stressing over money, it’s very hard to reduce your financial anxiety. One of the simplest ways to identify your money stressors is to ask yourself “why” at least five times. Your first answer might be obvious: “Why do I stress about money? Because I don’t have enough.” But your second and third may start to reveal details. “What don’t I have enough money? Because I’m always surprised with unexpected expenses each month,” or perhaps because you’re always running short on cash, don’t have a rainy day fund to tide you over when emergencies happen, or don’t have a good sense for how much your monthly expenses are, which makes it hard to stay afloat.
|Question (why or what)||Answer|
If this sounds daunting, I recommend Emily Guy Birken’s book End Financial Stress Now. I really enjoyed the thoughtful frameworks and ideas that she included to help identify and tackle the (sometimes unconscious) reasons we struggle with money.
If you’re like most of us, you may have a few sources of financial anxiety—for example, a massive student loan debt that keeps you up at night, along with a monthly shortfall that is causing you to regularly rely on credit card debt. The most important thing is you’ve now got a sense for why money is causing you stress.
4. Take (any) action against your stressors.
Once you’ve identified your money stressors, make a plan. Any action at all—no matter how small—is better than doing nothing. You may throw your hands up at a six-figure student loan balance, thinking “How can I ever make any meaningful progress against that massive debt?” However, creating an extra $20 in your budget to put against that loan each month (or week) is moving you in the right direction.
When you start to take action, use three steps:
• Write down your goals
This will help you stay focused and centered on accomplishing your objective. Goals written in a SMART manner can help you bring even more focus to your goal.
• Find a way to automate your goal.
For example, if you’re paying down debt, set up an automatic payment that includes a little extra money to repeat each month. This will help you avoid the temptation to “skip” a month, and ensure you meet your goal faster.
• Celebrate your successes and progress along the way with your friends.
This isn’t bragging; financial stability is something so many of us seek, and you’re helping break the money taboo when you share that you’re nearly halfway done with paying off your credit card debt!
5. Keep working to grow your income.
While money stress impacts people across the income spectrum, increasing your take-home pay gives you more flexibility. Growing your income can happen in many forms, from investing in your current career to achieve a promotion or raise, to creating a profitable side-hustle, or networking to shift into a higher-paying industry.
Given the harsh reality of the wage gap, which is even wider for women of color, women face a tremendous amount of opportunity to increase our income. Many women aren’t paid equally for the same work, and sites like Fairygodboss can help you understand salary data so you can negotiate with more information as you make your case for a raise.
6. To keep anxiety at bay, continue to educate yourself.
Becoming more informed will help you better manage your money and keep financial anxiety at bay as your life and career evolves.
There are so many interesting ways for women to explore personal finance today - from following well-known thought leaders like Deborah Owens, Sallie Krawcheck, Farnoosh Torabi, and Jean Chatzky, or engaging on Twitter with the many, many fabulous women that blog about personal finance, to keeping the money-related discussion going among your best girlfriends.
You’re not the only one that’s having trouble sleeping well at night because of money-related stress. But now you’re informed with some ideas that can help you tackle your financial anxiety head-on.
The Feminist Financier is on a mission to help women build wealth and own their financial independence, by improving financial literacy and taking the mystery out of money. Ms. Financier is also a shoe addict, travel fanatic, and wine enthusiast.