How to handle money anxiety

As we have explained previously, financial problems can affect your mental health. At the core of this is the anxiety that many of us experience regarding money and finances. We recently carried out a survey with YouGov, that asked 2,000 people how they currently feel about their financial situation, we found that 18% said they feel anxious.

Tackling our money anxiety can seem daunting. However, it is possible to take steps to regain control and reduce the anxiety you feel regarding money.

What is money anxiety?

If you’ve woken up in the middle of the night, thoughts churning around your mind which land on how to pay bills, or debt, this could be a sign of money anxiety. Ruminating and physical symptoms of stress when you think about money are all signs that money is causing you anxiety.

The NHS spoke to David Richards, professor of mental health services research at the University of Exeter, who shared his top tips for coping with feeling low or anxious because of money worries.

He says, “When you’ve been made redundant or you’re struggling with debt, feeling low or anxious is a normal response. You may be feeling, behaving or thinking in ways that are unfamiliar. But this doesn’t necessarily mean you’re suffering from depression or an anxiety disorder.”

His top tips to for coping include:

  • being more active – to help stop you from becoming withdrawn
  • facing your fears – by speaking to someone that might be able to help
  • Make sure not to drink too much alcohol – alcohol won’t help you deal with your problems and could add to your stress.

He also recommends sticking to your usual routine, if you can, “If you don’t have to go to work in the morning, you can get into a poor sleep routine, lying in bed until late or watching TV all day. Get up at your normal time and stick to your routine.

“Keep seeing your friends, keep your CV up-to-date, and don’t ignore the bills – try to keep paying them.”

Here are a few other ideas to help you handle money anxiety:

Assess your budget

Often when we are anxious about something it can be because we feel out of control. By working on a budget (either from scratch, or by reviewing your current one) you can be back in the driver’s seat of your financial situation.

Creating a budget is an immensely valuable exercise. It will highlight areas where you can make easy savings (perhaps it’s time for that daily take-out coffee to be swapped for home-made). You gain insight in to where your money is actually going.

To do this, sit down with bank statements and tot up where you have spent money over the last 3 months. Don’t forget to write down emergency costs too – life is always full of unpredictable costs and these must be factored in. Now take a good look at it and see where savings can be made. Also check that your outgoings aren’t exceeding your income. If they are, then it’s time to make some changes.

Start with debt

From here, you should prioritise paying off debt. Debt Support UK and Step Change are organisations which can help you manage your debt and repayments. Always pay off your most expensive debts first (excluding mortgages and student loans) before embarking on attempts to save.

Don’t be afraid to talk about it either, opening up is vital for boosting your mental health, regardless of any contributory element to your anxiety or mental health difficulties. Seeking support with money anxiety can go a long way to helping you feel in control but being embarrassed to talk about it can stop you from doing this.

Getting further help

Beyond debt advice, you will regain more peace over your financial situation if you seek out the support from experts. Citizens Advice are a network of charities that offer confidential advice online, over the phone, and in person, for free – this could be a great place to start.

Mental Health & Money Advice has information and advice for anyone struggling with money because of mental illness or whose financial situation is affecting their mental health.

Build a buffer zone

As soon as you can, start building an ‘emergency fund’ which can act as a buffer zone preventing future money anxiety. It’s a sensible approach to work towards holding 3 months’ salary in easy-access savings. In this way, you can cope if the boiler breaks, or if you’re out of work.

Many of our money worries come from fearing the worst, which isn’t necessarily a bad thing, it can help us to prepare.

Furthermore, many of these types of concern take root because we make a lot of assumptions. Instead, take some time to educate yourself about the realities of these financial concerns. For example, if you are worried about whether you’re saving enough for retirement, then sit down and work out some calculations.

Get your money anxiety in the black

It’s a good idea to tackle money anxiety. However, there is nothing wrong with retaining a healthy concern for your financial affairs. Constant money anxiety is detrimental to your wellbeing. However, healthy concern leads to sensible spending and saving decisions. Be proactive, and banish money anxiety but gain control over your finances in the process. For more information check out our guide on how to stop spending money.

If you’re still feeling worried, anxious or low after a few weeks, see your GP. You may find that talking to a professional therapist could help. Your GP can advise you on talking therapy services in your area.