Money Anxiety And How To Beat It

Money anxiety occurs when we know innately that we should be in a better financial position than we are in. It stems from an overwhelming burden of current underperformance that somehow makes the future uncertain. Money anxiety is particularly heightened during recessions or during tough economic periods.

Money anxiety is the emotional manifestation of your financial condition.

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What causes money anxiety?

Money anxiety can be caused by many factors not just a lack of money. These include low or unsteady income, job loss, rising expenses (especially with inflation), a history of deprivation, and debt. It alters your view of money and makes you think money is more scarce or harder to earn than it is. This often leads you into an endless worry about money and eventually into a deep financial abyss.

People with money anxiety tend to be extremely risk-averse or extremely risk-aggressive and hence rarely get the chance to attain financial freedom.

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Money anxiety can be seen in traits such as hoarding because of fear of loss or gambling in the hope of a giant payday. It has been known to cause health conditions such as depression, high blood pressure, heart disease, addiction, and sleep deprivation. This anxiety can also be so crippling that it affects a person’s self-image, self-worth, and confidence. Eventually, the individual cannot make significant strides to improve their financial well-being and is hence trapped in a web of constant worry and agony.

See also: How to live your best life

money anxiety
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How to overcome money anxiety

To overcome money anxiety, it is critical to understand what causes it. Personally, I battled money anxiety for almost two years and the cause of my money anxiety was fear of loss. I became so obsessed with risk and many other variables to the extent that I could not make decisions. This paralyzed me. I could analyze different investments and always find a reason to reject them all. This is known as analysis paralysis. It is characterized by overthinking and doing too much research to the extent that you cannot make a decision.

To overcome this overthinking tendency, I combatted my fear of loss and decided to invest an amount I was comfortable risking without fear or greed.

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Once you identify the root cause of money anxiety it is easier to beat it. With each type of money anxiety comes a different way to tackle it.

How to Beat Money Anxiety

Depending on your type of anxiety, the following steps can be taken to address it:

1. Think positively — As mentioned earlier, money anxiety is often caused by a scarcity mentality. If you are worried about a lack of money, it is wise to develop an abundance mindset and always think positively.

2. Budgeting — If you are worried about rising costs and future uncertainties, it is best to create a budget and stick to it. This will help you track your expenses and tame any impulsive purchases.

Access my budgeting spreadsheets below. They are easy to use, automated, and can help you manage your finances starting today.

Select the most appropriate for you: Individual Budget Tool and the Family Budget Tool.

3. Pay down debt — If debt is a significant factor or the cause of your anxiety, ensure that you pay down debt or renegotiate your debt. If you are in a debt trap, see my article on Why you can’t get out of debt. It will help you figure out the cause of the debt trap and how to escape it.

Struggling with debt? See my article on Why You Can’t Get Out Of Debt

4. Increase and diversify your income — If the cause of your anxiety is lack of enough income or unsteady income, consider increasing and diversifying your income. This can be done through side hustles, investments or even starting your own business.

See: 15 passive income streams to start building today

5. See a financial advisor — If the cause of your money anxiety is fear loss; consider seeing a financial advisor who can recommend a solution that is consistent with your risk tolerance.

6. Seek support — Do not be afraid to reach out to friends, family, and support groups on how to handle money anxiety. If you are feeling stuck, consider getting help.

7. Increase your exposure to financial information — Being knowledgeable can help you avoid some financial pits that could create or worsen your money anxiety. For instance, knowing how much interest accrues on a credit card is a small step in the right direction and can prevent you from paying exorbitant fees charged by predatory lenders.

See also: The 7 Best Assets to Own to Build Wealth

8. Practicing relaxation techniques — Money anxiety like any other form of anxiety takes a toll on your body and brain. To avoid being drained, it is prudent to practice relaxation techniques such as meditation.


The above solutions are just a few in a list of many. Money anxiety is a serious problem and the only way out is to identify why you have it in the first place. Once you have diagnosed the problem, it is easier to seek a remedy. You can look at your tendencies with money as a starting point. Always know that there is no ‘one shoe fits all’ when it comes to money. We all have different approaches and are in different situations. Look inwards to identify your problem and develop an approach that is appropriate for you, your situation, and your goals.

Finally, always remember that with money anxiety, the way out is the way through. Tackle the problem and you will come out stronger, wiser, and more resilient.

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