Money and anxiety

It’s common for people to worry about their finances from time to time. But if you’re consistently worried about money, you may be experiencing money anxiety. Financial anxiety can stem from worries about your income, job security, and outstanding debts, as well as paying for essential bills and necessities.

According to a recent study by the University of Bristol Personal Finance Research Centre, only one in four (25%) UK households feel financially secure. The cost of food and utilities has gone up while wages remain relatively unchanged, and many people are feeling the pressure.

If your financial worries are beginning to feel overwhelming, you don’t have to face it on your own. In this guide, we’ll explore actionable steps to help you break down and address money anxiety. We’ll also share tools and resources for third-party help organisations to help support you with things like debt concerns, money anxiety, living costs, bereavement, and more .

In this guide:

• What is money anxiety?
• What can cause money anxiety?
• What are the signs of money anxiety?
• How to cope with financial anxiety
• Where to get professional support 

What is money anxiety?

Money anxiety is where you feel persistent worries about your finances. This might include worries surrounding whether you can afford the cost of essential bills and necessities, as well as being able to fund long-term goals. It can manifest in various ways, such as stress, fear, or feeling low.

If you’re experiencing financial anxiety, it can be easy for it to impact other areas of your life. You might feel inclined to distance yourself from your loved ones or turn down social activities. It may make you feel restricted when spending money. It might also cause physical symptoms of anxiety and affect your mental wellbeing.

With the cost of living continuing to climb, financial worries are becoming more common for many UK households. For more support and insights on the matter, explore our guide to financial stress.

What is money anxiety disorder?

At times, money anxiety can be temporary, particularly during significant life events such as changing jobs, getting married, moving house, or starting a family. But for some people, it can be a constant concern that’s harder to shake off.

While money anxiety disorder isn’t a diagnosable condition, persistent money anxiety can negatively impact your mental and physical health in various ways. It can be linked to anxiety and depression, arising in feelings such as a lack of control, decision paralysis, or becoming hyper-vigilant with your finances to the point of stress.

If you’re experiencing severe money anxiety, it’s important to assess your situation and seek support to help relieve some of the pressure. We’ve listed a range of free help resources in this guide to help you find professional advice.

What can cause money anxiety?

There are many reasons why someone might experience money anxiety. It can be common among people who feel financially insecure or have a history of financial uncertainty.

Here are just a few potential reasons:

• Sudden job loss or redundancy concerns
• A lack of savings
• Falling ill or injured and being unable to work
• Having a history of debt or bankruptcy
• If you’re self-employed or work freelance or flexible contracts, you may feel added pressure to earn enough to cover your household needs and lifestyle
• Economic financial worries, such as affording essentials during a recession or cost-of-living crisis
• Financial abuse, such as someone controlling your finances or making you feel incapable of managing your own money
• Negative financial experiences, such as going through a divorce, or a failed business
• Sudden financial responsibilities, such as becoming a parent, caring for a dependent, suffering from a bereavement, or retiring

What are the signs of money anxiety?

Financial anxiety can affect people in different ways, and people may respond to these pressures in their own way. For some it may manifest in silent, racing thoughts, while others may experience physical symptoms.

Common signs of money anxiety may include:

• Obsessive worrying and checking your bank balance and statements
• Compulsive saving or a fear of spending money
• Feeling fear or dread opening bills, and perhaps even avoiding them altogether
• Hoarding unnecessary items, just in case you need them
• Lack of sleep caused by restless thoughts about your finances
• Withdrawing from socialising with friends and family
• Low mood or feeling hopeless
• Physical symptoms such as headaches, stomach ache, sickness and fatigue caused by anxiety

How to cope with financial anxiety

Money anxiety can be influenced by relationships, as well as our home and professional lives. But financial anxiety can also impact all these things just as easily too. Money anxiety may feel isolating, but you don’t have to go through it alone.

Leaving money anxieties to stew can lead to a negative cycle of stress, which can impact your relationships, work, and physical health. We’ve gathered some actionable steps to work through money-related anxiety and help you feel more confident and in control.

1. Monthly budgeting

Whether you feel like you don’t have control over your finances, or you feel overwhelmed by bigger picture goals, consistent budgeting can help you break things down and gain oversight over your finances. Reviewing your budget month by month can help you take a step back and assess your situation calmly, giving you the chance to celebrate small wins and target financial goals.

Start by gathering your recent bank statements and listing your:

• Total income
• Priority bills
• Spending habits

Our guides on budgeting made simple, the 50/30/20 budgeting rule, and how to budget when you’re paid weekly can all help you assess your needs, wants and goals to regain control.

Meanwhile, introducing healthy financial habits such as setting up spending limits, budget warnings and automated savings tools can also help you stay on track in the background.

2. Building an emergency fund

Prioritising savings to build an emergency fund can help give you a safety net if you happen to face unexpected costs, such as a sudden job loss or unexpected bills and repairs. Financial shocks can appear out of nowhere. Having a dedicated pot of savings can help tide you over and give you some financial breathing space.

Learn more about how to save up for an emergency fund in our helpful guide.

3. Addressing existing debt

Part of your budgeting strategy should also include chipping away at any existing credit repayments and debt to help avoid unmanageable interest fees and costs.

Target any outstanding credit balances and debt one at a time using tried and tested approaches like the debt snowball method, helping you pay off your smallest debts first.

If your debts are becoming unmanageable and you’re feeling anxious, reach out to your credit or debt provider as soon as possible. You might be able to negotiate some breathing space, or a more affordable repayment plan in the meantime. Other options, such as debt management plans, can also help you pay your debts in instalments.

4. Setting manageable savings goals

If you find it hard to save money, it’s often easy to become overwhelmed about setting savings goals. The easiest way to get started is to review your monthly budget and see how much spare money you have by the end.

Then, consider your savings goal and how soon you want to achieve it. For instance, if you want to save up £500, you could save £100 a month for five months, or £50 a month for 10 months.

Setting money aside little and often is the best way to keep up consistent saving habits. Once you know how much you can afford to put away, automated standing orders can help you chip away at your savings goal in the background.

Discover more tips on how to create long-term financial goals with our helpful guide, which can help you monitor and break down your savings progress into manageable steps.

5. Boost your financial knowledge

Learning more about personal finance may help empower you with better knowledge about budgeting, saving and investing. Understanding your choices can help you feel more in control and confident to make informed financial decisions.

There are plenty of resources available to help break down finance terms and strategies, from books and podcasts to online resources such as our finance jargon guide and personal finance 101 guide.

6. Look after your mental health

Understanding how money anxiety can impact your mental health and wellbeing is an important step towards reclaiming confidence and control.

If you experience financial anxiety, you may be worried about spending money on non-essentials and joining social activities. Finding a balance between financial responsibility and caring for your wellbeing is the goal here, even if you take it one day, week, or month at a time.

Making time for stress management, such as practising mindfulness, exercising, getting fresh air, and connecting with others can help alleviate symptoms of financial anxiety.

We know that leaning on loved ones and practicing self-care and kindness won’t make bills any more affordable. But finding security in your closest relationships and physical health can help you manage the mental and emotional effects of money anxiety.

For more insights on the link between money and mental health, explore our guide.

7. Find out if you could be eligible for benefits

If you’re under financial pressure due to living with a long-term or mental health condition, or you’re caring for other dependents, you may be eligible for welfare benefits. Read more about how to find out if you could be claiming benefits.

Where to get professional support

Coping with money anxiety can feel like a solitary struggle, but we assure you that’s not the case. Some people may be afraid to talk about finances and mental health, as they’re often very personal topics. Free and confidential help is always available, whether you need to talk about money or your mental health.

Financial advice

Some people may also experience money anxiety due to serious concerns that they’re unable to cover essential living costs.  If you need to talk to someone about financial pressures or debt, there are plenty of third-party organisations and charities to reach out to. They can help you navigate your concerns and create a plan of action.

Contact the following resources for independent financial advice:

• MoneyHelper
• Citizens Advice
• StepChange

Mental health advice

If you’re feeling lost or hopeless, you don’t have to face everything alone. Free mental health support is available from organisations such as Mind and Samaritans.

If you need urgent mental health support, don’t hesitate to contact NHS mental health services. Their line is open 24/7, where someone is always available to listen.

You can find our complete list of third-party organisations and charities for more support resources and guidance.

Remember, you’re not alone

Breaking free of anxious thoughts and habits isn’t easy, especially when they’re related to your finances. But there are plenty of actions and habits that can help. From budgeting tools and prioritising your mental wellbeing to seeking free and confidential support, there will always be a solution or a listening ear.

Discover more tools and insights on our Moneyboat blog, including financial wellbeing tips to help set you up for financial confidence.