7 Avoidable Reasons Money Makes You Anxious

It’s fairly common knowledge that financial anxiety is at an all time high. With the nation in credit card debt to the tune of $1 trillion and a 150% increase in student loan debt in just the last decade, it’s no surprise. In fact, many consider finances to be more stressful than work or our relationships. But don’t you wonder – does it have to be that way? While each of our personal circumstances is different, there ARE ways to limit the anxiety our finances can cause. Let’s see what can be done as we talk about 7 avoidable reasons money is making you anxious.

This post may be sponsored or contain affiliate links, which means I may receive a small commission, at no cost to you, if you make a purchase through a link. See my full disclosure here. I am not a doctor, therapist or professional of any sort. These are only my personal opinions and experiences. Always consult your doctor.

Reasons Money Leaves You Feeling Anxious

1. Not knowing where your money is going.
2. No emergency savings.
3. Overwhelming debt.
4. Unknown future.
5. Overspending.
6. Frugal to a fault.
7. Loaning to friends/family.

The long term stress of financial worry contributes to anxiety, depression, migraines, ulcers and other digestive issues, high blood pressure and sleep issues…to name a few.

We’ll go into detail with each of these in a bit. First, I just want you to know that I too have experienced the stress that goes along with financial uncertainty. And that stress of the unknown was contributing to my anxiety. The “what ifs” that stressed me out. The insecurity. Six of the seven reasons were a factor in my financial anxiety, to varying degrees.

With my anxiety revolving around my health, my imminent and untimely death was always on my mind. Contributing to about 40% to our family’s take home income, could they survive comfortably without it?

So we got our debt paid off (minus the mortgage), have beefed up our emergency fund and upped our retirement contributions considerably. It’s like a weight lifted off my shoulders. 

We didn’t have life insurance (other than what’s provided through our employer) and that ate at me. We eventually went through the process and after much thought, decided against it and will invest that money elsewhere. Another weight off my shoulders, nonetheless. It made us talk about some “what-ifs.”

Now let’s get back to those 7 avoidable reasons money makes you anxious.

7 Avoidable Reasons Money Makes You Anxious

1. Not knowing where your money is going.

You needed something so you bought it. Then you wanted something. So you just bought it. Next thing you know, they paycheck you just received it gone and you still have a car payment to make!

You avoid this with a budget. A budget allows you to know where your money it going, when it’s going and how much is going. Knowing up front (ideally, before the paycheck is even deposited) where your money is going will keep you on track. There’s a sense of calm associated with knowing where your money is going.

Write it in a notebook, create a spreadsheet, use an app – whatever works for you. But keep track of every cent. A little here and a little there adds up quick.

2. You have nothing saved up for an emergency.

Your car broke down and now you have a $500 unexpected bill. You have no choice but to put it on a credit card, furthering your debt. Nothing raises anxiety and stress quite like the unexpected. Especially when it comes with a price tag you aren’t prepared for.

What you need to do here is get an emergency fund funded asap! Make $1000 your first goal amount. Put every last extra cent in here now. Have a garage sale. Sell some of your excess belongings at a consignment shop or in your local buy/sell/trade group, sell on Ebay, Poshmark, or Mercari – these are some of the sources I’ve personally used to beef up my savings.

Only dip into this emergency savings when it’s a true emergency. Then build it back up as fast as you can.

3. You have an overwhelming amount of debt.

The bills never end. You are in debt up to your eyeballs. But because you budget now (ahem, ahem) you can now see where it’s all going. And that’s the start.

You make this less stressful by paying down your debt using Dave Ramsey’s snowball method. That’s what I recommend for debt payoff. It’s what we used to pay off our credit cards, student loans and auto loans. And it feels so good! A debt snowball is where you pay the minimum payment on all of your debts except your smallest one. One that smallest balance, pay whatever extra you can until it’s paid off. Then take that payment amount and “snowball” it into the next lowest debt. You start small so you see progress quickly. And with each dent made, your anxiety will ease.

4. You have not prepared for the future.

You’ll need to have a plan in order.  Creating a budget is the logical and necessary Step 1 here. Think about what you want your situation to look like in 5 years? 15 years? Retirement? Once you’ve determined your wants, how will you get there?

My suggestion, if you have a company sponsored retirement plan and they match a percentage, put at least that much in RIGHT NOW – it’s free money! Do you need life insurance? Do you have a will?

5. You overspend.

Then you feel guilty. In the worst of cases, you lie to your loved ones about it. You get overdraft fees, late fees and higher credit card bills that you can’t pay. It’s a vicious cycle of debt.

A reality check is in order here. And it comes back to budgeting , and tracking, so you know how much is there to spend. If willpower is weak, cut up those credit cards. Use cash – it’s much more painful that way. Watch those impulse purchases. Wait a week or a month – do you still NEED those shoes? When you run to Target, take a list and stick to it. Those Target clearance deals have gotten me too. Don’t be afraid to return something. It happens. Forgive yourself, but learn from your overspending mistakes.

 6. On the flip side, you could be frugal to a fault.

Are you missing out on things that you needn’t be? Are you sacrificing your health by avoiding the doctor or skimping on your nutrition? Forgoing maintenance and repairs that will hurt your property in the long run?

That budget that we keep talking about? You need this here too. Set aside a bit every check for maintenance. For entertainment. Then you won’t feel guilty about it.

7. You loaned money to your family or friends.

Ouch. This is one is tricky. Your heart is in the right place, but it’s a heavy burden on you financially. It creates tension and resentment in your relationship. Friends and family may not view repayment as a priority. Or they see you as the “nice guy” and ask for more.

The obvious solution is to not do it. And the recommended solution is to not do it. Politely deny the request, stating that you’ve seen what can happen. And you don’t want that sort of strain in the relationship. Offer them an alternative solution, such as speaking to a bank or helping get their budget in check.

If it’s already been done, a gentle reminder could be enough. Offer a timeline and a plan – you’ll need to pay XX amount a month to be paid off by such and such a date. Sometimes you’ll just need to suck it up and realize you’re not getting it back.

Let’s summarize one more time.

7 avoidable reasons money makes you anxious:

1. Not knowing where your money is going.

2. No emergency savings.

3. Overwhelming debt.

4. Unknown future.

5. Overspending.

6. Frugal to a fault.

7. Loaning to friends/family.

Do any of these sound familiar? Not having a plan for my financial future was a biggie for me. What’s your biggest money stressor? Have you been able to overcome it?