How to Free Yourself from Financial Anxiety

by | May 26, 2020

As the world attempts to bounce back from the COVID-19 pandemic, there is still much uncertainty and financial anxiety in the air. In fact, according to a survey done by the National Foundation for Credit Counseling, 69% of Americans age 18 and up reported having financial anxiety.1 So, if you are in that group, how can you free yourself from financial anxiety?

Feeling Financial Anxiety is Normal

First, it is important to understand and acknowledge that it is completely normal to have feelings of financially-induced stress and anxiety, especially during a pandemic. We have all been inundated with shocking headlines about record-setting negative drops in the market, vast unemployment, and health concerns surrounding COVID-19.

Then, although we mean well, financial advisors are probably telling you things like “Ignore the headlines,” “Focus on the long-term,” and “Remove the emotion from your decisions,” which are all very difficult to do because of how emotional of a situation we are in. This is uncharted territory for essentially every human being living on the Earth today.

The conflict between your internal feelings and the advice you may be receiving could lead you to feel like you are doing something wrong or you’re the only one feeling this way. But, let me assure you that those feelings are normal. To not have any extra stress during this time would be abnormal.

Eliminating your financial stress and anxiety may not necessarily be as easy as 1, 2, 3, but here are three steps to help reduce those negative feelings.

Step 1: Take Inventory of Your Assets, Liabilities, Income, and Expenses

To reduce your anxiety, you will need to address your fear. However, I have found that our fears are not necessarily centered around a singular known issue, but around many unknowns. In fact, I once saw a quote that said “The oldest and strongest emotion of mankind is fear, and the oldest and strongest kind of fear is fear of the unknown.”

To reduce the unknowns in your financial situation, take inventory of your assets, liabilities, income, and expenses. By doing so, you are laying the groundwork for a plan to get you to the place you want to go. This is no different from using a GPS system to get to your desired destination. You need two pieces of input; your desired destination and your current location.

Taking inventory will give you your current location.

Step 2: Create a Plan

Once you know where you are and where you want to go, it is much easier to map out a route to get there.

For example, let’s imagine you’d like to retire at 65. After completing the first step of taking inventory, you’ve identified that you are slightly behind the pace needed to retire on time. By identifying a shortfall, you now have the choice to save more, work longer, or perhaps adjust your expected spending in retirement.

This method can be applied to retirement planning, debt repayment, college savings, or any other financial goal you might have. Some areas, like retirement planning, may require more sophisticated tools, but the process is unchanged.

Step 3: Take Action

Perhaps it goes without saying, but after you make your plan, then you should execute your plan. Mark Twain said “The secret of getting ahead is getting started. The secret of getting started is breaking your complex overwhelming tasks into small manageable tasks and starting on the first one.”

Scheduling your tasks is a terrific way to help keep you accountable to your goals. If any task seems overwhelming because you don’t feel you are equipped to complete it, then consider hiring a CERTIFIED FINANCIAL PLANNER™ professional to help you.

Bottom Line

Having a written financial plan is the ultimate tool to help you keep perspective. If you know where you stand, where you want to go, and you have a plan to get there, you will allow yourself to remained focused on the most important things, which are the things you can control.

While it is normal to feel financial anxiety, you can still overcome it with good financial decisions. The perfect combination of embracing your emotions and using logic will help you make good decisions, acknowledge your feelings, help you reach your financial goals, and keep your sanity.


1National Foundation for Credit Counseling;

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