How to Deal with Money Anxiety

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how-to-deal-with-money-anxietyWhether or not you struggle with anxiety in general, at some point in life we will all face money anxiety. Because lets be honest, money can create stressful situations – saving up for and buying a home, paying off debt or just trying to financially survive on a day to day basis. Money impacts all of us, and if you do suffer with anxiety already, money stresses can just amplify it.

The thing is, we need money to survive. If it controls us rather than we control it then it can have a hugely negative impact on our lives including our mental and physical wellbeing. Have you ever gone to bed worrying about money? Or felt physically sick opening your mail and seeing your credit card statement? Have you ever avoided checking your bank account because you’re worried about facing the reality? I know I’ve been in these situations myself and let me tell you, it is not a nice place to be.

The good news is, everything is fixable. We can take back control of our money situations and loosen the knot in our stomachs. But in order to do so, we have to face up to it and stop burying our heads in the sand.

If this is ringing true to you, read on for ways you can deal with money anxiety and practical tips you can implement to lift that money weight off your shoulders.

Know Your Situation

First things first, you need to know exactly where you are. Not sure where to start? Grab a pen and paper and make a list. Log in to your online banking, your credit providers, your mortgage, your savings accounts. Whatever money accounts you have and just write everything down.

If you’re paying off debt, it’s important to know how much you owe and to who, plus details of minimum payments and interest.

Take note of any savings you have and if you have a mortgage, get those details written down too.

The end result could be better than you expected, or it could be worse. But either way, you’ve taken the first step of acknowledging your true financial situation. So at least you now fully understand what you’re dealing with. And when you know that, you can move forward and create a plan.

Have a Budget

But before we get to making a plan, you really need to make a budget. Budgets get a bad rep. People assume that having a budget means rigidly cutting your spending and living on beans on toast but it doesn’t have to be that way at all.

Having a budget just gives you a clear picture of what money you have coming in and where that money needs to go. Not having a budget can lead to overspending in certain areas meaning you’re short elsewhere. This is where the slippery slope to debt begins so it is really important to get that budget set up.

I’ve written a 3 part guide on creating a budget which you can read here. The most important part is to be honest about your budget and include all expenses. It doesn’t matter if you end up with a negative figure – we can fix that, you just have to know your full situation.

The simple act of creating a budget in itself greatly reduces stress. I like to set up next months budget at the end of the current month and just going into a new month with a clear budget makes me feel much less anxious.

Build an Emergency Fund

Even if you’re paying off debt, I think it’s important to build an emergency fund. Other people might disagree with this approach. But for me I feel that if you plough all your savings into paying off debt while yes, you might save on incurring interest, what happens if there’s an emergency?

What if your car breaks down and needs emergency repairs? Or your boiler breaks down and you have no insurance? Or your fridge breaks and you can’t afford a new one? It’ll go straight back onto that credit card you were working so hard to clear! Building up a safety net for emergencies will not only cover you in these situations but it’ll give you peace of mind knowing that it’s there.

How much you need in an emergency fund is up to you. What figure would make you feel comfortable? For me it’s £1000. When you have decided on a figure, start to think about how you can incorporate saving for an emergency fund into your budget. Need some ideas to help you build it faster? This post might be helpful.

You might also enjoy…8 Common Reasons People Don’t Pay Off Debt

Track Your Spending

Once you have a budget in place it’s really important to start tracking your spending. You might know exactly how much you need to pay your bills, but what about the variable expenses? If you’re not tracking your spending you won’t know how much to budget for food and other variable spends so it can be easy to overspend in these areas.

Tracking your spending makes you more self aware and makes you reconsider what you’re about to purchase and if you really need it. If you’re suffering with money anxiety then tracking your spending will help to alleviate this because you will always know exactly where you are and see immediately if you’re overspending in one area so you can look to recoup it in another.

Check Your Bank Daily

This point goes hand in hand with tracking your spending, but just taking a minute to log in to your bank each day can help reduce potentially stressful situations. By checking in with your account daily, you’ll notice any mistakes sooner so that you can deal with them promptly before they escalate.

You will also see any direct debits or payments which you may have forgotten to budget for, so you can adjust it accordingly. I have my banking app downloaded on my phone and it’s one of the first things I do each day. Start checking your account daily, and it’ll quickly become a habit you won’t have to think about.

Have a Plan

Okay, so we know where we stand financially and our budget is all set up. We’re tracking our spending and we’re checking our bank daily. What’s next? Well now it’s time to make a plan. Doing all of the above is great but it doesn’t truly solve our money anxiety issues.

Why are we feeling stressed about money? Having a budget is great. But if that budget is telling us we don’t have enough money to cover everything, then what? What about debt? We might be able to cover the minimum payments each month but if we’re incurring interest, then we’re just coasting aren’t we? It’s time to think about a plan of action.

Your plan will be personal to you and your situation but you need to think about a few things.

Whatever of the situations above are true for you (or maybe something else entirely is causing you to lose sleep), the next few tips can be helpful in any and all of them.

Reduce Your Expenses

You might’ve created a budget but when was the last time you took each expense line by line and reviewed it? We can easily create a budget by looking at our outgoings and accepting them for what they are, but have you tried to decrease them? Reviewing your expenses should be an ongoing process that you look to do regularly. If you’re not checking them often, you could be missing the chance to make big savings.

Not sure how to go about reducing your bills? I have created a 10 day Free Email Course which you can sign up to here – 10 Days to a Better Budget. Once you’ve signed up, you’ll receive an email with tips for reducing an individual bill each day for 10 days. By practicing what I preach, I’ve saved hundreds off my annual expenses.

You might also enjoy…Reduce Your Energy Bills with These Top Tips

Reduce Your Payments

I’m going to start this point off with a little disclaimer: please only do this if it is absolutely necessary and the only alternative is debt. Doing this on a regular basis will hinder your money situation, not help it. I’m only including this because it’s helped me out of a hole on more than one occasion when we’ve had a particularly tight month.

One of the great things about being a Bulb customer, is the fact that you can log on to your account and change your payments. This has given me much needed flexibility on months when we’ve really struggled for money. As I pay a fixed amount each month based on my average usage (£120 a month for gas and electric), it means that during the summer months when I use less energy, I build up quite a good pot of credit. Rather than asking for a refund, I usually leave it there ready for the winter months.

However, there have been one or two months over the past year when I’ve drawn up my budget and know that that month is going to be really hard for us. On times like this I have logged into my account and changed my payment amount to a lower amount to give me a bit more breathing room in my budget. Once the Direct Debit has gone out, I log back in and increase the payment to cover my usual payment and the shortfall from this month, ready for next month.

I’m not sure if all suppliers offer this (my previous one didn’t – and in fact, I had to wait an age for a refund when we were hundreds of pounds in credit) but if yours do, it could be worth considering if you’re in a large amount of credit.

Likewise with debt repayments, if you’re paying a fixed amount over and above the minimum, you could consider switching to minimum payment only for that month, just to ease the burden a bit, and then increase it back to your fixed amount when things aren’t so tight.

Contact Your Creditors

If it’s the ever increasing debt interest that is causing you money anxiety, contact your creditor. Paying off minimum amounts while interest is being added each month means that your balance will never really come down and will take a lifetime to repay.

If you’re really struggling, give your debt provider a call and explain your situation. Quite often, they will agree to freeze the interest on your account, which means you can attack the debt faster. It’s worth a call to ask.

You might also enjoy…How to Stay Motivated on Your Debt Free Journey

Make Extra Money

Sometimes, the reality of a situation is that we just don’t have enough money coming in. We can reduce our outgoings, track our spending and implement all the money saving tips going, and it still might not be enough. This is particularly true if you are in a lot of a debt.

If this is the case, we need to think about getting more money coming in. There are a multitude of ways to make extra money – hey, half my blog content is about making money! So get cracking with a side hustle. You can have a clear out and sell your old stuff on eBay or Facebook. You can complete surveys for a little bit of extra money. There are lots of ideas here

Get Some Support

Finally, if money is causing you significant anxiety and it’s not something you think you can resolve on your own – ask for help.

Confide in a loved one or get your spouse on the same page as you. A problem shared is a problem halved.

If emotional support isn’t enough, consider whether you need to see a medical professional and get help. There is no shame in admitting that you are struggling. The help and support is available if you need it.

If it’s debt that is causing you worry, there are lots of debt charities out there offering free help and support so don’t be afraid to reach out to those – it’s what they are there for! This website details where you can get help.


Money anxiety is something we will all deal with at some point, but there are ways to deal with it. The biggest thing you can do is take control. Ignoring the situation will only result in it getting worse. Nothing goes away if we just ignore it.

Just remember that there is always a way forward, every situation is fixable and nothing is permanent. You can take control of your financial situation.

You might also enjoy…How to Live on a Small Income and Thrive

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3 responses to “How to Deal with Money Anxiety”

  1. Kari | Money for the Mamas says:

    Making a plan (and writing it down) is by far the best way to take control of your financial situation! So glad that you highlighted this!

    • katiesaves says:

      Thank you Kari 🙂

  2. Whitney Kutch says:

    Great tips! I love Dave Ramsey’s books and podcast, and having an emergency fund is a bit aspect of what he recommends. Thanks for sharing this information!

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Hi! I'm Katie

I started Katie Saves while on Maternity Leave to document our adjustment to living on less. Now back in work - I blog about all things money with a little life organisation thrown in for good measure. Join me!