Financial anxiety and mental health

It’s safe to say that most people will, at some point in their lives, experience money worries. And with 9 in 10 adults seeing an increase in their cost of living lately, it’s clear to see that money-related concerns aren’t going anywhere anytime soon.

Unfortunately, the current financial situation means that everyday money worries could quickly turn into financial anxiety.

The simplest way we can describe financial anxiety is an overwhelming fear of all things related to money. It can lead to feelings of guilt, shame, stress and exhaustion.

This can be extremely debilitating when we have rent, mortgage payments, bills, credit card debt, council tax and many other things to factor into our living expenses each month. These responsibilities don’t disappear, so feeling unable to cope or deal with them can be a serious issue for a lot of people.

Here, we talk about the impact financial anxiety can have on mental health and ways you can start to take control of your money in a more manageable way.

What are the signs of financial anxiety?

Financial anxiety can affect anyone. No matter what they earn or how much money they have, the fear that stems from thinking about money can be debilitating for so many people. It can have a huge impact on your everyday life. Keeping you up at night or leaving you unable to focus on anything else.

Take a look at some of the signs of financial anxiety:

• Avoiding looking at your bank balance or even opening an envelope for fear of what’s inside.
• Bills start to pile up and you ignore communications from your providers.
• Losing sleep due to constantly thinking about the next thing you have to buy or if you have enough money to cover it.
• Feeling guilty for the littlest of spends, even if you can afford to buy it.
• Physical symptoms can present themselves, like headaches, palpitations or high blood pressure when you encounter money situations.

Avoidance tends to be the major indicator that someone is suffering from financial anxiety. But if we always push these worries to the backs of our minds, they can spiral and lead to further issues like depression, severe lack of sleep and social isolation. However, it’s worth noting that this isn’t always the case for everyone.

According to the mental health charity Mind, mental health can also affect the way we deal with money, so it can become a cycle of anxiety and destructive financial habits. These issues can include:

• Lacking the motivation to manage finances
• Overspending in an attempt to feel better
• Making impulsive decisions with finances

Four ways to manage financial anxiety

Money is involved in so many essential parts of our lives, so avoiding it isn’t going to solve how we feel. There are several steps that could help you take charge of your finances in a more manageable way.

1. Make a plan

If you find finances overwhelming, the first step in a more positive direction is to create a plan that you can easily stick to. If you work, it’s always a good idea to split your salary.

First, put enough money aside to pay off bills and debt. Once you’ve sorted that out, you can make a budget for yourself and have the remaining money to use for the rest of the month.

This can reduce fear of overspending or falling short for bills. Having a current account that keeps spending money and bills money separate could really help.

2. Create a realistic budget

Budget your money so that you know you’re not overspending. You can take a list with you to go food shopping so that you don’t impulse buy items you might end up throwing away.

Go through your bank statements on a regular basis to understand how much you have been spending and where you could cut down.

Try our free budgeting planner to help you create a realistic budget based on your monthly income. We also have helpful advice on how to budget if you get paid weekly.

3. Face your fears

If opening envelopes containing your bills or reading your online statements makes you feel stressed, you should try building up to this when you’re with someone you trust and feel comfortable with.

They could show you what they do with this information, and you can learn how to deal with it yourself.When you feel prepared to do it alone, you’ll have more confidence facing and tackling it.

You could also try reading information about money, whether this is a news article or learning new terminology to help you understand the area that is causing you to have anxious feelings.

4. Understanding what is causing these feelings

If you feel like you need extra help, know that you're not alone. It may be worth speaking to your GP who can advise on any support available. The NHS also offers a list of recommended mental health helplines.

Alternatively, you can access GOV.UK and Citizens Advice for information about redundancy, benefits and debt management.

If you’re a thinkmoney customer or just need a little extra advice, head to our support page where you can find some helpful information.