3 Psychological Secrets to Coping with Financial Anxiety
Money has seemingly always been the number one source of stress. And, with the economy struggling, it is easy to see how the nagging doubts you have about your pocket book could become major financial anxiety.
A few weeks ago we wrote about how to reduce money related stress. Well, we missed a few useful tactics from psychology that could be the real secrets to coping with financial anxiety. And, let’s face it, anything that alleviates persistent worries is useful to consider.
1. Take Control and Do Something, Even if You Do It Badly
The biological response to financial anxiety is fight or flight, but neither of these tactics are appropriate for dealing with your money woes.
Science suggests that the best way to deal with what is bothering you is to do whatever you can to take control of the situation, even if you do it badly. Doing something, literally anything, is going to reduce your level of stress.
How it works: Doing something without worrying if you are doing it right can be very freeing. And, it will begin to address your source of stress. It will also speed up your understanding of the problems you face and speed decision making. Most importantly, it will calm your body’s reaction to the anxiety.
Personal finance is complex and it can be intimidating, but it isn’t going to get easier if you ignore your money. One easy thing to do is to take control over your financial situation by building and maintaining a comprehensive plan. The NewRetirement Planner puts your financial wellness into your own hands. You can:
- Go step by step through the system.
- Learn as you go. (Do it badly… At least you are doing it.)
- Calculate your what ifs. (Do it badly… It is only a “what if” and you’ll begin to see opportunities.)
- Discover personalized opportunities to do better. (We’ll make suggestions.)
- Get live help if you need it. Take classes. Work with a coach. Get a free discovery session with a financial advisor.
- Take control and reduce financial anxiety
Doing something, even something as simple as updating an account balance, can calm your nervous system and point the way to financial success.
If you can develop a weekly or monthly financial habit around your finances, you’ll likely find that your financial situation will improve and you’ll feel less stressed.
The financial habit need not be difficult or time consuming. Consider doing any of these things on a regular basis:
- Updating account balances
- Reconciling your budget
- Trying one what if scenario
- Monitoring your net worth or retirement readiness
Most of us harbor some degree of shame, guilt, and/or regret over bad financial decisions like not saving enough earlier or taking on debt. For example, a study from the Employee Benefit Research found that 70% of retirees regret not saving or investing more or earlier.
The problem is that the more you beat yourself up, the less likely you are to tackle your financial problems. Worst of all, the avoidance breeds more financial issues and increased financial anxiety. Science Direct reports on how shame intensifies financial hardship.
It may be really important for you to forgive yourself any earlier financial problems and stop beating yourself up.
If you hear yourself criticizing earlier decisions that have triggered some kind of financial peril, drop the negative thought and redirect your attention to the future.
Interested in these ideas about alleviating financial anxiety? Try this Ted Talk, “How to Cope with Anxiety,” by Olivia Remes of the University of Cambridge. She shares her vision on anxiety and will unravel ways to treat and manage this health disorder.
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