I know what it's like to worry about money. I know what it's like to feel scared to look at your bank account or to swipe your credit card and not be sure if it's going to be rejected or not.
If you have financial fears, you're not alone. 77% of Americans feel anxious about their financial situation, according to a survey by Capital One.
But before you can start to manage your money well, you'll need to change your attitude toward money, because anxiety is only going to get in the way. So, here are nine ways you can reduce money anxiety today.
1) Show Financial Shame the Door
The fact that you're reading this article right now shows that you care about your finances and you're taking the right steps to take control of your money.
Whatever your financial situation is, or whatever past financial mistakes you may have made, I promise you that you are not alone, and you are not the only person who has faced that situation.
It's unfortunate that we don't have more open conversations about money, because without them, we suffer in silence and money anxiety only increases.
The truth is that many people — including people who you know — are facing similar struggles. If you can confide in someone you trust, you will feel better about your financial situation. Shame burns up when you shine light on it.
If you struggle with financial shame…
Be brutally honest with yourself about anything in your financial life that is causing you shame. You could write it down and then crumple up that piece of paper or burn it. Or you could tell these things to a trusted friend, and then you got to move on.
The past is over. It's time to focus on the future that you want. Have grace with yourself, and let the things that are causing you shame go, because we can't do anything about the past, but today is a new day.
2. Spend Regular Time on Your Finances
Immersion therapy is a pretty common prescription for anxiety. And when it comes to finances, it is crucial. Avoiding dealing with your money situation creates chronic background stress.
Instead, start spending time focused on your finances each week. This ensures that there are no more surprises. You know exactly what your financial situation is, even if you don't like it. Clarity is power.
If you don't spend time on your finances…
Create a weekly money ritual. If you need help developing a ritual, download our weekly money ritual checklist. It has tips for setting up your weekly ritual, ways to make financial management enjoyable, and a list of things to do to stay on top of your finances.
3. Focus on the Positive
Celebrate small wins, like sticking to a budget for a month or canceling a subscription that you don't use. Even if you're in a tough financial situation, there is a benefit to finding a silver lining.
If you let yourself focus on the negative, then you won't spend time on your finances, and your situation will never get better.
If you have trouble focusing on the positive…
When you do your weekly money ritual, write down three financial wins. And if you're in our Facebook group, be sure to share your wins in there so we can celebrate with you. (If you're not in our Facebook group, what are you doing? Get in there!)
4. Make a Plan
If you don't have a clear vision of where you want to go, then you also don't have any way of knowing how close or far you are from the goal. And not knowing where you are in your financial journey can create a lot of financial stress and money anxiety.
So, start thinking about what you want your future to look like. This is going to help you to create a clear roadmap on how to get there, and you'll be able to establish milestones along the way that encourage you to stay on track.
If you don't have a plan…
Write down your short- and long-term financial goals. And if you're not sure on exactly what you should be focused on, what your financial priorities should be, then check out our wealth-building roadmap. This will tell you exactly what you need your short-term focus to be on in order to make the most of your money.
5. Don't Compare Yourself
…especially to things or people you see online.
Instagram is a highlight reel. It's not a realistic look into people's lives. You aren't seeing the full picture when you look at somebody's social media account, and it can be tough when you are struggling financially to see pictures of someone else's epic vacation or their beautiful new house, but even as amazing as someone's new home may look from the pictures, you don't know what happened so that they could buy that.
You don't know how hard they've had to work or the debt they've gotten into to be able to afford it. You don't know if they're struggling to make their mortgage payments or have collection agencies breathing down their neck. You don't know if they actually even own it. So don't beat yourself up for having different priorities or making different decisions.
If you struggle with comparison…
Taking a fast from social media for a while can help reduce your money anxiety. I barely use social media, and I'm a lot happier because of it.
If you do find yourself wishing that you had it as good as you think someone else does, remind yourself of the things that you do have to be grateful for.
6. Ask Yourself, “What's the Worst that Could Happen?”
I know that might be a little scary to ask yourself that question, but when you actually name your fears, then you can figure out how to prepare for them.
Like Sun Tzu says in The Art of War, you have to know your enemy if you want to be victorious. Most people get stopped by the “what ifs.” What if there isn't enough money? What if I don't get another commission? What if I get fired?
The solution to your fear is to think all the way through it. Actually answer those “what if” questions. Well, what will you do if you get fired? What's the plan, Stan?
If you don't have a financial plan…
Identify your financial fears and figure out a plan for how to handle it if the worst does happen, then rate it from one to 10 on how likely it is that that worst case scenario will actually happen.
You'll likely be surprised by realizing that a lot of your fears are just not that likely to happen, and even if they do, you have the resourcefulness to deal with them. So, creating that plan gives you peace of mind and reduces money anxiety.
7. Educate Yourself
We fear the unknown, so understanding personal finance takes out the fear. Start taking steps to learn personal finance. This was a big part of what helped me pay off $40,000 of debt, deal with my own money anxiety, and continue to live debt-free.
If you want to financially educate yourself…
You're already taking a great step by reading this article. Now, make a list of what aspects of finances stress you out the most. Write them in order from most stressful to least stressful, and start learning about each topic, one by one. You can learn so many things from Google or the Dow Janes YouTube channel. (Be sure to subscribe!)
8. Talk to your Partner
One of the biggest mistakes my husband and I made as newlyweds was to not talk about our finances. We had different ideas of how much each of us could or should spend, how much we could spend without talking to each other, and that created a lot of friction and financial stress.
One of the benefits of having a partner is having someone to lean on when things are tough, and financial stress is one of the top reasons people end up in divorce, so you want to be proactive and have open conversations.
If you have a significant other or someone you share finances with…
Talk to them about your concerns. These conversations can be difficult because a lot of people get uncomfortable when talking about money, but they can also be incredibly powerful and healing.
It can be really helpful to ground the conversation in a clear objective and to look for a shared goal. So, for example, say something like, “I've been thinking a lot about our finances and I would really like for us to have a conversation about getting out of debt. Are you open to that?” That will probably go a lot better than, “You spent too much money last week.”
9. Create an Emergency Fund
Saving an emergency fund of six weeks to six months of expenses can go a really long way to reducing money anxiety. When you're financially prepared for an emergency, fewer things actually feel like emergencies, and they feel more like inconveniences.
If you don't have anything in savings right now…
Begin by building up a starter emergency fund of $1,000. Keep this money in a separate account, and ideally at a separate bank, so that it's out of sight, out of mind, and you're not going to be tempted to spend it.
To sum it up…
Money anxiety is very common, but money can be something that actually brings you peace and security instead of anxiety. And I believe it should be that way. Worrying about money, it isn't productive. In fact, it's probably holding you back from putting in the work and taking the actions that you need to do in order to get control of your finances.
If you want to learn even more about how to take control of your finances, be sure to check out our free webinar, Think Like an Investor. The mindset shifts in this training will have you seeing money in a new way, one that gets money to work for you.