Are you dealing with financial anxiety?

There are many reasons to worry about our finances right now. After all, the impact of the Covid pandemic is still seen today, with global supply chains taking a hit, resulting in inflation. This rise in cost of living means we now have to fork out more for everything from food – even at the hawker centre – to groceries. The increase in goods and services (GST) tax is yet another hit to our wallets.

Add these financial stressors to the fact that many of us spend our time doomscrolling through social media looking at people who (allegedly) ‘have it all’, which is bound to make us feel more inadequate about our financial situation. You might also have friends telling you they’re off on yet another luxurious holiday or they’ve signed up for a new BTO flat. And you’re left wondering, “Why is everyone able to spend money so easily while I’m freaking out about when I’ll be hit by yet another big bill?”

It’s not surprising that some of us are anxious about our finances. Research has shown that around 30% of people in Singapore are losing sleep as they’re constantly worrying about money. And close to half of us – 46% – have some kind of anxiety resulting from stressing about our income and finances. 

Financial anxiety comes in two forms – being stressed about your finances because you genuinely cannot afford things or not having any major financial issues but worrying about the big picture or whether you’re going to be able to get to your next financial milestone (buy a home, go on holiday) soon. 

Grace Loh, psychotherapist, counsellor and coach at Counselling Perspective, explains that financial anxiety affects a broad spectrum of people and isn’t limited to those facing poverty or who already have a predisposition to anxiety. External factors like inflation, global economic instability and social comparison could all contribute to it.

You could also develop financial anxiety due to what you’ve experienced in your past. Examples include past financial hardships, such as growing up in poverty or experiencing sudden losses, which can leave emotional scars that resurface during economic downturns, says Grace. Also, people with personality traits like risk aversion or perfectionism can make them more susceptible to obsessing over financial outcomes

“While those with a history of anxiety may experience more acute stress, financial anxiety can also develop in individuals without a prior history of mental health issues, driven by the overwhelming and unpredictable nature of economic pressures,” she adds. 

The constant worry about money

So how do you know if you’re experiencing financial anxiety or if you’re just a bit nervous about your money flow? It can be hard to notice the anxiety you’re feeling until it gets overwhelming.

“Financial anxiety can weave itself into daily life, often manifesting in ways that can go unnoticed at first, but gradually take a toll on both mental and physical well-being,” says Grace. “Persistent worry about money can become a constant background noise, making it difficult to enjoy everyday moments or focus on other important areas of life.” 

This stress you’re feeling can also lead to physical symptoms such as tension headaches, fatigue and digestive problems. Grace reveals this is because financial concerns activate the body’s stress response, putting it into a prolonged state of fight-or-flight.

Financial anxiety can also manifest as avoidance behaviours. Grace states that some people may choose to ignore their bills, put off budgeting or avoid financial discussions altogether, hoping that sidestepping the issue will lessen the discomfort. 

“However, this only serves to intensify the anxiety as unresolved financial problems continue to linger in the background,” she adds. “Facing financial realities is crucial in breaking the cycle of worry.”

Your cognitive and emotional functioning can also be affected as a result of financial anxiety. You might find it difficult to concentrate, whether at work or in personal relationships, as the mind remains preoccupied with financial concerns, says Grace. This stress often spills over into relationships, causing tension and arguments over spending habits or financial decisions, which can erode trust and intimacy over time. 

You mental health as a whole can be affected too. Grace notes that this broader impact is significant as chronic financial stress can lead to symptoms of depression and generalised anxiety, trapping individuals in a cycle of despair that feels hard to escape.

“Financial anxiety can also distort decision-making, leading to impulsive purchases or, conversely, paralysis in the face of important financial choices,” Grace explains. “Whether it’s a reckless splurge to temporarily ease the discomfort or avoiding key financial decisions altogether, anxiety clouds judgment and makes it harder to navigate financial realities effectively.”

Tips to combat financial anxiety

If you feel overwhelmed by financial anxiety, you need to equip yourself with the appropriate tools to combat it. Grace advises taking a multifaceted approach, encompassing education, emotional regulation, cognitive restructuring and social support.

Grace has the following tips:

• Challenge negative thought patterns related to finances. Cognitive behavioral therapy (CBT) techniques can help individuals identify irrational beliefs about money (e.g. “I will never be financially secure”) and replace them with more balanced thoughts (e.g. “I can take steps to improve my financial situation”).
• Creating a budget is essential for prioritising spending and savings, offering a sense of control. Break down financial goals into smaller, achievable steps. This can help reduce feelings of overwhelm and provide a clear roadmap.
• Regularly reflecting on what you are grateful for can shift focus away from financial worries and enhance overall well-being. This practice encourages a positive mindset and helps individuals recognise that financial success is just one aspect of a fulfilling life.
• Surround yourself with supportive friends, family or financial support groups. Sharing concerns and discussing financial experiences can normalise anxiety and provide a sense of community.
• Collaborate with a financial advisor to create a comprehensive financial plan that includes budgeting, savings, investments and debt management. Having a clear strategy can instil a sense of security and reduce uncertainty.
• Be mindful of how social media affects your financial mindset. Curate your feed to include content that promotes financial literacy and positive financial habits, and consider unfollowing accounts that trigger feelings of inadequacy.

And, if financial anxiety becomes overwhelming, Grace suggests to consider seeking therapy: “A mental health professional can provide tailored strategies, support and tools to navigate financial stress effectively.”