September 2016
Money is a major source of stress, according to a recent survey by the American Psychological Association (APA). Almost 3 out of 4 Americans feel anxious about money.
A study found that Millennials (born 1980 and after) and Gen Xers (born between 1965 – 1980) have significant financial worry as they struggle with under-employment, student loans and parenthood.
Worrying about money and debt impacts people individually and it tarnishes relationships. The APA reports that roughly 1 out of 3 couples fight about money.
Having more money does not relieve financial anxiety (2015 UBS survey). Half of those with a net worth of $1 million to $5 million believe that one wrong move, such as a job loss or a drop in the market, could cause their financial position to crash. And people in this bracket feel like there is not be enough time to recover and earn that wealth back, if that were to happen.
OUR BRAINS GO INTO HIGH ALERT AROUND MONEY
Why? The fear response of not having enough money goes back to caveman days. If a big black bear were to appear in the field as the cave dwellers were gathering berries, they would immediately go into fight, flight or freeze mode. As the sense of physical danger increases, their bodies responded accordingly (rapid heart rate, increased adrenaline levels, increased perspiration, dry mouth, tightened muscles, dilated pupils, etc.).
No differently than 4,000 years ago, our brains continue to be geared towards safety. The emotional part of our brain does not know the difference between emotional safety and physical safety. Money touches upon both physical and emotional safety – so it’s a double whammy to our brains.
On top of it all, financial anxiety feeds other anxious feelings – such as fear of failure, fear of being a disappointment, fear of letting the family down, fear of being seen as a loser or fear of feeling inadequate.
If financial anxiety is not dealt with in a healthy way — the increased physiological responses of these fears can destroy one’s health and emotional well-being.
CREATE CHOICES FOR YOURSELF
1. Create a plan. Gain a sense of control by writing out goals and targets. Whether the goals are to reduce expenses or increase savings – look at where you are at now and create a plan. Gallup reports that 80% of non-retirees and 88% of retirees with written financial plans had more confidence that they could achieve their financial goals than those without a plan.
2. Start Small. By focusing on what you can see ahead of you and the action that you can take now – will begin to reduce your anxiety. Start with the small goals first – the bigger goals will be easier as you accomplish the small ones.
3. Focus on the Positive. It is human nature to focus on the negative – what you’re doing wrong. Take some time to look at what’s going well for you with your money, debt, savings —maybe you’ve increased your 401(k) contributions or you’ve started to take your lunch to work or the value of your home has increased.
4. Use Anxiety as a Temporary Motivator. Anxiety can be a sentinel for the things that need to change. Once you begin to make those changes, allow yourself to let the anxiety go. It’s no longer useful.
5. Let It Go. Ask yourself: What’s the worst that could happen? Yes, you may have to cut up some credit cards, cut back on vacations or share a car with your spouse. These changes are not life threatening. Stop and soothe yourself: There’s no big black bear. There really is no black bear.
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