What is Financial Anxiety?
Financial anxiety is anxiety caused by money and/or personal finances, that causes feelings of fear, anxiety, worry, stress, and a range of negative emotions. Financial anxiety doesn’t have to be caused by a lack of money or a dire financial situation. COVID-19 has also led to a rise in financial anxiety. A recent scientific brief released on March 2, 2022, by the World Health Organization, highlighted that in the first year of the COVID-19 pandemic, the global prevalence of anxiety and depression increased by a massive 25%. A new study by Meridian released in February 2022, also found that more than half of Millennials in Canada are still worried and anxious about their finances.
The root of this underlying apprehension may come from childhood: the study revealed that 51 percent of millennials said they are still coping with leftover financial anxiety. Compared to other generations, the cohort was most likely to say that money caused tension in their households growing up (20 percent) or that their parents were “always worried about money and they were too” (30 percent). That’s how more than half of the generation (56 percent) learned to save and set financial goals, and what lead most of them (79 percent) to feel knowledgeable about money when they left home.
As the Founder of the Institute on Holistic Wealth, I have heard from many women in my coaching programs, that even when they are in a “state of abundance” they’re still worried about money. Those who suffer from financial anxiety are in a perpetual state of worry and fear about day-to-day bills, day-to-day spending, investing, and it can be very debilitating for some people.
Financial anxiety can be more severe than being concerned about having enough money in your bank account. It manifests similarly to the symptoms of generalized anxiety disorder, such as tension, worried thoughts and irritability. People might avoid checking their finances, avoid conversations about money with their spouse, but become hypervigilant and have obsessive thoughts around money. In the NEW Holistic Wealth Expanded and Updated: 36 Life Lessons To Help You Recover From Disruption, Find Your Life Purpose, and Achieve Financial Freedom, I also went deep into these issues.
How Our Past influences Our Emotions and Money Decisions Today
We just launched the Certified Trauma of Money Consultant Program at the Institute on Holistic Wealth, and I’ve also heard from a lot of women that I have coached, that when they examine their financial anxiety it’s often rooted in the past, from childhood and growing up in a low-income situation or seeing feast and famine patterns in their family lineage. Unresolved financial trauma from the past can lead to financial anxiety, which can also further lead to making sub-optimal financial decisions over a lifetime, potentially costing individuals hundreds of thousands of dollars, from an investment perspective. As a Trained Economist, I see this in terms of risk and investment behaviour every day. In the Certified Trauma of Money Consultant program, we identified a host of factors such as scarcity mindset, cognitive overload and stress as causes of financial anxiety, among many others. Our past experiences around money can be directly responsible for our emotions around money today.
Strategies and Tips To Cope With Financial Anxiety
Know Your Personal Financial Identity.
I created the Personal Financial Identity Framework and Quiz to help people identify and embrace the strengths and weaknesses of their personal financial identities. Some people are Anxious Spenders (see Quiz on the Institute on Holistic Wealth website), where spending even $20 to $30 creates anxiety, even if it’s budgeted for. Often, that’s also rooted in childhood experiences around scarcity. Most of us transition into adulthood not having gained a sense of our personal financial identities and end up making mistakes of the past.
Our Personal Financial Identities are “Relational” – that is, they are directly influenced by those around us from childhood to adulthood. Their perceptions around money and their attitudes towards money – even the words that we heard related to money, influenced this relationship and identity around money. Once you know your personal financial identity and you know why you are having this anxiety around money, you are better able to make decisions and become more confident and happy in your purchasing and investment decisions.
Gratitude and Money Mindfulness are Important
Once you are self-aware and you know the root causes of your financial anxiety you are better able to regulate your emotions around money. Seek out resources, courses and/or a coach to help you with financial anxiety. As stated above, self-awareness is key to addressing the problem but also knowing how to rewrite a new personal money story for yourself around your financial goals is also critical.
Develop A New Relationship With Money
At the Institute on Holistic Wealth, we teach people how to rewrite their personal money stories after past money trauma. Coaching also helps as well as other resources such as books and podcasts. The Holistic Wealth podcast with Keisha Blair has had many guests who have gone through money trauma and share tips and insights on how they dealt with it. My book Holistic Wealth also highlights some key money blocks to success, and how to recognize them to overcome money trauma and financial anxiety.
There are many strategies outlined in my new book Holistic Wealth, that addresses money trauma in a holistic way. The Certified Trauma of Money Consultant program is a cutting-edge program delivered by the Institute on Holistic Wealth, that is designed not only to help you heal your money trauma but also to equip you with a certification to help others heal and rewrite their personal money stories.