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Financial anxiety is real. Thanks to the way society placed so much importance on money, most of us are feeling stressed about our finances. After all, our consumerist society requires us to pay for anything and everything that we need to survive. That is the only way that we can live a comfortable and convenient lifestyle. When your finances are lacking you will feel pressure because you know that you do not have the funds to pay for you and your family’s survival. That pressure can lead to all sorts of conditions - one of which is the feeling anxious about your finances. According to the 2016 Planning and Progress Study conducted and published in NorthWesternMutual.com, 8 out of 10 Americans are feeling financially anxious. If that is not alarming enough, 36% revealed that the level of anxiousness is rising. The same study also revealed that 28% of Americans worry about their finances on a daily basis. Feeling anxious all the time is not a healthy way to live your life. In fact, the study of Northwestern revealed that how it affects the life of the participants in their study. Financial anxiety negatively impacts their health (67%), happiness (70%), home life (61%), mood (70%), ability to pursue dreams (69%), social life (51%), and career (41%). Obviously, if you are feeling stressed about your finances, you need to do something about it. Stress can lead to all sorts of health-related problems. You do not want to add to the problems that you are already going through with your finances.
How to be more financially confident to avoid feelings of anxietyThe truth is, we can never be free of this feeling. Sometimes, financial fears can be a great way to force us to make cautious and calculated decisions about our money. However, too much of it is not healthy. This is why you need to moderate it. Do not let it rule over your life because too much fear or anxiousness can paralyze you and keep you from living a great life. In an article published in Forbes.com, they revealed the result of another survey done by the Go Banking Rates website. Apparently, survey respondents are asked to choose issues that they are most concerned about. Based on the response, the leading financial issue of Americans involves the rising cost of health care (31%). The other respondents said that Social Security viability (16%), income inequality (15%), an increase in tax (13%), higher cost of education (13%), and military spending (11%) are the other concerns. This proves that across different surveys, people are admitting that they are feeling a certain level of financial anxiety. Fortunately, there are several ways that you can overcome this feeling so you can start living a better quality of life. Know your finances.Knowledge is the best way for you to battle anxiety. Most of the time, we feel fear because we are uncertain. If you know what will happen, you can face it with confidence. You do not have to feel anxious about it. This is why it is very important for you to understand your finances. Take a look at your financial situation and scrutinize your income and expenses. When you study your current finances, you can identify the issues that are making you anxious. Most of the time, it is between your income and expenses. To be more specific, your income is not enough to cover the expenses that you have to pay for each month. You need to identify how you can lower your expenses or increase your income. Only then will you be able to move forward to eliminate the feeling of financial anxiety. Set up financial goals.Another way to help with your financial fears is to set financial goals. Sometimes, complacency is not always healthy. You need to improve your financial position because that will help boost your confidence about your finances. This is why financial goals are very important. If you are feeling financially vulnerable right now, you can always start with small goals. Sometimes, small successes are enough to make you feel confident about your financial situation. When there is confidence, there is less anxiety. It can be a small saving goal or debt payment amount. Be aware of your options.In the same way that your knowledge of your personal finances can help, knowing your options will also allow you to battle financial anxiety. Sometimes, as you study your finances, you will realize that there are problems that need to be addressed. If you know your options, you will feel more confident about solving all these financial problems. It does not matter if it seems like you do not have the finances to improve your financial situation. As long as you have sufficient financial education, you should be able to face your financial anxiety. Once you learn how to face it, that is the first step to overcoming it. Have a backup plan for everything.Although you may have a solution in place, that is not enough. Make sure that you have a backup plan in case things do not work in your favor. This will not really boost your confidence further but it will help you feel more secure about your financial situation. Despite the financial problems that revealed the reasons for your money stress, this security will give you the strength to fight your financial battles. It can be a simple boost in your emergency funds or the setting up different sources of income. Any of these should help make your financial situation more secure and help you address any issues that you may have with financial anxiety.
Why your finances can make you feel stressedIn one of our articles, we discussed that 1 out of 3 Americans is still losing sleep over their financial problems. This is despite the economic improvements that the government is going through. It makes you wonder, if the country already recovered, why are there people who have yet to feel it? Does that mean only a few are benefitting from the economic improvements in the country? Whatever it is, seeing the news about economic improvements and not feeling it will add a certain level of financial anxiety in you. It makes you wonder why do our finances have so much effect in our lives? In an article published in PsychologyToday.com, Michael F. Kay, an investment advisor, has a couple of answers. Over the course of his career, he found 7 recurring themes that contribute to the negative effect of finances in a person’s life.
- Limited financial knowledge. We are not being taught enough about our finances and how to manage it. We are usually left to figure things out on our own.
- Lack of time to work on our finances. While we go through the motions of managing our finances, we lack the time to gain new insight that will help improve our ability to make financial decisions.
- Too much ego. We feel like we already know how to manage our finances but in truth, we lack the knowledge. We feel ashamed to admit that we need help. Also, this ego is the reason why some of us are trying so hard to keep up with the Joneses.
- Choosing to ignore money issues. According to the author, some of his clients chose to ignore their money issues because they could not understand it or they were afraid of it. Regardless if you know that it will start a fight in a relationship, you should never ignore money problems. It is better to treat them early on to avoid letting it escalate.
- Trust issues. Trusting the wrong advice or company to help with a financial problem is also another cause of financial anxiety. This is why conducting your own due diligence is always important. Also, when you know your financial goals and current position, you will know how to filter the financial advice that you will get.
- Being arrogant about the future. Do not assume that you know what will happen or that you can “wing it” in the future. It is always best to make the preparations yourself instead of relying on other people.
- Not being objective. Sometimes, we view financial decisions differently. This is why it is important to consult the opinion of a spouse, partner or at least someone you trust to make sure you are making the right choice.