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Stressed About Money? Here's What Your Financial Anxiety Is Trying to Tell You

Commentary: Don't avoid your money anxiety -- lean into it.

woman with eyes closed surrounded by storm clouds and money bills
Robert Rodriguez/CNET

This story is part of So Money, an online community dedicated to financial empowerment and advice, led by CNET Editor at Large and So Money podcast host Farnoosh Torabi.

For many of us, the holidays can stir up feelings of financial anxiety and fear.

And a quick scroll through my Instagram feed confirms this, telling me I'm not #fearless enough. "Everything you want is on the other side of fear," one post tells me.

How rude.

Financial fear is a topic my So Money listeners have asked about regularly during my seven years hosting the podcast. When they want to know how to ask for a raise, it's because they're afraid of discussing their achievements with their boss. When they're on the fence about quitting their job, it's because they're scared of economic uncertainty. When they don't know how to approach finances with their partner, it's because they're fearful of starting an argument. 

Being fearless suggests you can afford to brush off your fears, including money anxiety. But given all the psychological and social impacts of the pandemic, more experts on my show are discussing the connection between money and mental health. Fear, they say, shows up for a reason. And they agree that it pays to be patient with how we feel. 

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Anxiety is not something we should pathologize -- it's actually normal and necessary, according to Dr. Ellen Vora, author of The Anatomy of Anxiety. She described our society as "emotion-phobic" because we view emotions like panic or grief as burdens that need to be blocked. Except sometimes anxiety is telling us something important about our personal lives, our values or the world around us. "It's really here to say, 'Hey, slow down. Get still and pay attention to this,'" Vora said on So Money earlier this year.

She's right. Ignoring our emotions surrounding money can be costly. If you're solely focused on being fearless about your spending, you might blaze ahead and suffer the consequences of being in the red later. Or if you refuse to confront your fears about budgeting, you might just tuck your bills into a drawer out of sight, all the while late fees compound. 

When we don't address our financial fears, it can lead to avoidance and extreme behavior like overspending, said Chantel Chapman, co-founder of the online financial literacy program called Trauma of Money, on my podcast last month. She said that it can also prevent us from taking any financial risks at all, including important ones like investing for retirement.

Recently, Roxanne, a So Money listener, wrote to say she was afraid of losing it all. She grew up "flat broke," and had never earned more than $30,000 a year before she built a successful business 15 years ago. Yet despite amassing a net worth of over $1 million, Roxanne was worried about not being able to support herself. "No matter how much I save, I don't feel safe enough," she explained. "Why do I still feel like I could blow it and be back at square one?"

My advice to Roxanne was to examine her fear and ask key questions about what it might be trying to tell her. Here are the three questions you should ask yourself to work through your financial fears and figure out the next right move.

Where is this money fear coming from?

The first question relates to your fear's origin story: Is this an inherited fear? 

Fear has a tendency to show up in our lives due to external influences -- our families, cultural expectations and social pressures. For Roxanne, fear of scarcity stems from her experience growing up in poverty. Because money is equated with safety, security and worth in our society, people who have been economically marginalized often struggle with financial trauma. But is it fair to believe that Roxanne will repeat a financial reality from her childhood, when she had no control over money? 

Possibly -- life has a way of throwing us curveballs. But the truth is that in her adulthood, Roxanne made many smart money decisions and has secured her finances exceptionally well. If she can focus on recognizing and valuing her efforts and successes today, and continue to use the tools that got her there, she can start tackling some of her worry over financial loss.

When certain thoughts arise around fear or shame, Chapman said it's best to pay attention to what's happening and come into the present moment so you can interact more clearly with your finances. 

What's the worst-case scenario?

When you start to get anxious over life's what-ifs -- from affording medical bills, mortgage payments and child care to saving for retirement -- my advice is to get specific. What are you afraid of exactly? 

In describing her concerns, Roxanne spoke in abstract terms like "going broke" and "losing it all." Sometimes, regulating your emotional response means going even deeper into the dark place, say, imagining losing your home in a fire or having to sell your business. This exercise isn't meant to brew more anxiety, but to help you better analyze the current strengths and weaknesses in your financial life and take proper inventory of what you need. 

How can I feel less afraid about money? 

After imagining the worst-case scenario, the next question is: What can I do to feel more empowered and secure? 

Let's take a common fear right now related to the economy: layoffs. While it's stressful to think about being out of a job for six months, by confronting this possibility you might realize that you actually have more than enough in savings to hold you over. Or, you may discover that you'll have a significant financial gap, so to be better prepared, you start cutting back on expenses or start a side gig to supplement savings.

Money fear or anxiety may prompt you to establish a healthier relationship with your finances. In that case, working with a money coach or financial therapist could be the next best move. 

I can't tell you how many times guests have used this exercise as a catalyst for change in their financial lives. As Vora said, "Mental health issues do not mean we're broken. It's that we're having an appropriate response to a set of incredibly challenging circumstances."

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