My prior blog post, discussed why so many women suffer from financial anxiety. The financial industry was created by men, for men. In modern financial institutions there is a strong emphasis upon analytics and competition and this does not match the way that many women were socialized.
The Physiological Component of Anxiety
Often women fault themselves for their financial anxiety and any resulting behaviors. But the physiological responses to anxiety are very real. Stress causes hormones to flood our bloodstream. The flood of hormones can send our body into a panicked state in which our brain stops its usual logical functioning because we are focused purely on survival. While this response may be helpful in fighting off wild animals, it can be harmful when it comes to dealing with financial stress.
The feeling of panic often leads people to avoid their finances. they do the bare minimum to survive, rather than working to set themselves up for future success. They can enter into a cycle in which they avoid dealing with their money situation and then mentally beat themselves up for the neglect. People blame themselves for being incompetent or lazy. This type of negative self-talk is rarely helpful in producing changes in patterns of behavior.
So, rather than focusing on fears and past mistakes, what are some ways that individuals can actually move forward? What can they do to improve both their financial situation and their confidence in their ability to manage their own finances? How can they honor the reality of the physical responses while still taking tactical steps to improve their financial situation and/or their mindset?
Don’t Overdo It
My first recommendation is to start small. It is unrealistic to expect to change everything all at once.
Pick just one thing to focus on. Select on area of your financial management that is causing you distress or discomfort. Is there a certain task you have been putting off? What is one small step you can take to build momentum? Some examples include
- Tracking your spending
- Making a plan to pay down debt
- Reviewing your monthly bank and credit card statements
- Starting a retirement account
- Starting an emergency fund.
Remember, don’t try to do all of these. Pick just one. None of these suggestions require that you actually modify your behavior – other than those that involve saving if you do not currently have any money left over at month end.
The purpose of any of the above is not to implement austerity measures in your life. It is about gaining a feeling of purpose and control. The goal is to increasing your knowledge and confidence.
Personal finance can be overwhelming. Changing your money habits is like changing any other habit. If you want to implement long term, sustainable changes then it helps to move slowly. Truly incorporate one change before implementing another. If you start out trying to remove all screen time, exercise two hours per day, or implement a twelve-step beauty ritual you will probably become overwhelmed and give up quickly. If you make a smaller change it will be a lot easier to incorporate and maintain.
Talk About Money
The old adage that we should not talk about sex, money, religion, or politics exists to maintain the status quo. We have been told it is impolite to discuss these matters because discussion leads to questioning and questioning leads to change. If we don’t talk about it, then people will not be able to fully recognize the forces of oppression at play. People will not easily discover like-minded folks with whom they can band together to assert their power and demand change. In her 2020 article in Well + Good Mary Grace Garis states that “It’s time to smash the notion that the only acceptable conversation topics are ones that are easy and digestible and comfortable; it’s time to embrace impolite conversation topics.”
One tool available for changing our feelings about money is to discuss money. There are so many ways that these conversations can be beneficial.
A New Perspective
When we increase the transparency of financial matters, we may discover things are not what they seem. Do you ever feel like everyone else is living the good life while you are scrimping and saving? Knowing that someone else had family help when they bought their home, that they don’t have any student debt, or just that they make a lot more money may help you to realize that you are not doing the terrible job of managing your money that you thought.
Comparison Can Be Good
I have often been told that “Comparison is the thief of joy.” It is true that comparing yourself to others can be distressing and harmful. As I mentioned above, often we are comparing dissimilar situations and faulting ourselves for the dissimilar results.
However, there is a difference between comparing ourselves to others and having a basis for comparison that grounds us in the realities of our situation. If we don’t know the salaries of our co-workers or others in our industry then how do we know if we are being underpaid? How do we know if we are overpaying for a product or service if we don’t have a comparison? (I am speaking of manipulated over-payments that fuel the corporate machine, not intentionally paying more to support living wages or ethical practices.)
We Are Not Alone
Talking about money also helps us to realize that we are not outliers. Everyone has fears regarding money. Most people feel a degree of financial anxiety or incompetence. There is so much shame surrounding money.
As Brene Brown has famously told us, “If we can share our story with someone who responds with empathy and understanding shame cannot survive.” Therefore, if you are feeling shame about your financial situation one simple (though not necessarily easy) solution is to discuss it. The more we talk about money, the more we will learn how common our feelings are. Knowing that it is not just you feeling shame, guilt, or inadequacy can be a helpful step in escaping the negative head-space.
Peer Education
Sharing knowledge with others who are in the trenches can be a great educational tool. While you want to be sure that you are getting accurate information, it does not always need to come from a professional. People who have recently learned something are often the best teachers. They may be able to relay concepts in a more understandable manner. The person who has newly acquired knowledge may have a focus or interest that is relatable to others on a similar journey.
So, go ahead and share your knowledge. Ask others to share with you. When we teach something to others, we not only impart the information to them, we also help to cement and clarify it in our own brains.
I do want to explicitly caution people: Do not take financial advice from someone who does not have the appropriate qualifications. Like a medical professional or a contractor, there is a reason licensing is required to practice in this field. Bad and/or inappropriate advice can cause serious financial harm. There is a distinction, however, between education and advice. Sharing knowledge and resources to help others to educate themselves can be a wonderful way to take some of the fear and discomfort out of personal finances.
Get Support
Going it alone can be difficult. Personally, I am much more likely to get exercise if I sign up for a class or find a friend to walk with. You can put some systems in place for managing your money. Find an “accountability buddy.” This need to be someone you are actually accountable to, just a person to help you remain committed.
Maybe this is a person who is meticulous about reviewing their budget at a set time every week. You could jump on a call for a co-working session for moral support. Or, you may know someone in the same financial situation as you. You can work through your financial anxiety together by each setting simple goals and then check in regularly.
I love to combine the joy with the undesirable as a motivator. For example, find a local friend who also wants to work on their finances. You can meet every two weeks for coffee, have a 15 minute status check in, and then just spend the rest of the coffee date in enjoyable conversation.
Working with a professional is another form of support. Obviously, I would love to have you check out my services and reach out to me with any questions. Additionally, there are many money coaches who cannot provide advice, but do that offer help with budgeting and money mindset work. When hiring a professional be sure to make sure the services align with your needs and their prices are accessible to you.
Breaking the Cycle
Anxiety, overwhelm, and shame are very real emotions. These psychological stressors can result in profound physiological responses. Many people become caught up in a chicken/egg scenario in which negative financial situations cause negative emotions surrounding money. These negative emotions then lead people to neglect their finances. The neglect worsens the financial picture. The cycle of financial anxiety continues.
These negative emotions can lead to a distorted view of one’s finances. Once a person becomes used to thinking about themselves in a certain way – such as being “bad with money” – in can be hard to break the mold. But thought patterns can change. It is highly unlikely that the change will be instantaneous or effortless. But that does not mean your efforts are not working. Meaningful change is often slow and gradual.
If you feel like you are not good with money, find a time when you are in a good head-space for change. Then start with these small steps: take small actions, talk about money, find outside support. As you see proof of your ability, your financial anxiety will begin to diminish. I promise you that you are capable of tending your finances.
Greetings! Very helpful advice in this particular post! It is the little changes that make the most significant changes. Thanks for sharing!
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