Looking for the best tips to handling your financial anxiety right now? Look no further and check out these awesome tips.
Ideally, we’d all trust ourselves when it came to spending money. Whether our anxiety is unfounded or not—maybe we have some childhood trauma or spend impulsively—we still can’t stop it from existing.
While we should work at the root our anxiety, that takes work and time and possibly money (in therapy). So, it’s okay if we need to take care of our day-to-day anxiety without attacking the root of it every time.
These tips will provide some external reassurance to help you decide if that purchase is really necessary. You likely fall between the two extremes of refusing to spend money on yourself because it’s “a waste of time” or you spend lots of money that you don’t want to spend.
No matter where you are, try some of these out.
This post is all about financial anxiety.
FINANCIAL ANXIETY TOOLS:
1. Trust the seven-day rule
Whenever you want to purchase something, expensive or not, and you’re second guessing yourself, this rule will become your best friend. This rule is going to be the friend you need to tell you when you actually need to buy something.
The moment you’re about to buy something that you’re not sure about, you make a note of it and wait seven days. By the end of the seven days, the idea is that you’ll either have forgotten about the thing causing you stress or you’ll buy it because it’s worth it.
2. Stay strong around those discounts
We’ve all been in that situation: we get an email from a brand we like and they’re running this incredible deal that will get us 60% off that dress that we were never going to buy. This happens all the time the more targeted ads get towards us.
The important part, no matter how much these ads pull us in, is that we stay strong in the face of these discounts. Anxiety flares up when we think that dress is something we really need but aren’t sure, so we have to remind ourselves we never really wanted it to begin with.
3. Buddy up when you’re not sure
While we should try to avoid relying on external sources of validation when we have financial anxiety—again because of that whole “getting it at the root” thing, it’s okay for us to use our available resources from time to time.
If calling up a friend, partner, or family member will help you realize you either need something or don’t, go for it. Sometimes, we need someone to tell us we never buy ourselves stuff so that thirty dollar hat is worth it. Or maybe we don’t need that two-thousand dollar hot tub.
4. Think about purchases in terms of hours worked
It helps to consider purchases in terms how many hours if would take to pay for that purchases because it makes it real clear how invested you are in this item compared to other items you could buy with that money.
For instance, take something you like: going to the movies. Say a ticket is around $15 (I know, inflation is a thing, but go with me here). If you buy that thirty dollar hat, you could have seen two movies.
Based on that math, you can decide how much you want that hat—if it’s worth it based on the work you put in to earn that money.
5. Set up a budget tracker
The reason setting up a budget tracker is not the first step is the sense of dread it can inspire in some people: the idea of a spreadsheet and confronting previous purchases is stressful. You’re dealing with your finances in a way that may not work for you. That’s fine.
However, everyone should develop a system of understanding their finances in a way that is most comfortable and useful to them. Decide whether you want to track your purchases after-the-fact and adjust your budget or you monitor your spending before purchases and stick to it.
6. Create a monthly check-in
The most important part of managing your finances—and therefore financial anxiety—is consistency. Consistency keeps you from losing track of your purchases and keeps you on track of your goals.
Pick one time a month or every other week where you’ll sit down and make sure your money is fulfilling its one purpose: taking care of your needs and making you happy.
Choose goals, from travel to a new treadmill to weddings, and make sure you’re setting aside money for all of those goals. Where you’re not, take the time to adjust your spending to meet those goals over time.
7. Use credit cards like a debit card and cash in the rewards
Credit cards are an incredible way to make sure you’re getting rewards for your purchases. If you’re already going to be spending money on eating out or electronics, you should get a card that will reward you.
When you get credit cards that work for you, you’re doing what makes you happy and being financially responsible at the same time. The trick to actually getting credit cards to work for you is to treat like them debit cards.
That way you don’t end up with credit card debt and you don’t want to because it’s typically the highest-rate debt and it wreaks havoc on your credit score.
8. Use tools like Rakuten and Honey
When you’re already making a purchase, these tools will work similar to credit card rewards. Credit cards typically offer two categories of rewards: cashback or points. In this case, Rakuten is a tool that gives you cashback when you shop brands they partner with.
Honey will automatically search for deals, including discount codes, to get you the best price on that item. One of the best Honey features is the price history they provide on common websites. They’ll tell you if something just increased in price so you know to wait a while.
9. Stay away from the monthly payment
Monthly payments pile up. Whether you’re paying rent, utilities, phone bills, medical bills, student loans, etc., you get it. We all pay those horrible bills that pile up ten or a hundred dollars at a time.
The last thing we want to do is add to that by paying off some expensive (or not that expensive) item from an online store. The monthly payment has become so common and easy to obtain that we’re now at the stage where items over fifty or one hundred dollars can be broken up.
When company offer that option to us, it can be tempting because we pay less up front. But, the bottom line is we’re borrowing money we likely can pay off.
And, if we can’t afford it on our credit card (using them like debit cards), maybe we need to save up for that item instead of buying it in the moment.
10. Shop secondhand or local (ThredUp, Etsy, or your area)
Financial anxiety typically couples with other types of anxiety, like climate anxiety. So, when we’re purchasing from local or secondhand stores, our purchases feel like they’re making a difference.
While there’s nothing wrong with where you choose to shop, you can choose to shop small or gives clothes a second life. That way you feel better about your purchases and can even purchase great secondhand items for a cheaper price.
11. Put your money in a HYSA
A High-Yield Savings Account pays you for putting money into their bank. The interest payments tend to be low most of the time, but, other than investing, it’s the highest return you’ll get on money that won’t go anywhere.
While everyone should invest (see the next tip), investing your money also locks it up. So, if you’re trying to save and want to make money on those savings, you should opt for a HYSA over investing—only for the amount you want to use over the next two to three years.
Everyone should open a HYSA and it’s free. So, sign up for one (this is my personal rec and also Tori Dunlap’s) and make your money work for you—make sure you take it out of that low interest checking account too!
12. Open a Roth IRA and contribute to it
There’s no better time than right now to open your Roth IRA if you don’t already have one. Once you open one, start contributing to it monthly. You can opt for contributing the full six-thousand dollars a year (five hundred a month) or do you what you can for now and build up.
If you’re starting out with investing, the number one rule to keep in mind is time. Your money will grow when you invest it so long as you give it time to ride out the hide and lows over the course of several years.
While some experts might tell you there’s such thing as “short term” investing, keep in mind the average doesn’t benefit from that. The way we growth our wealth is by focusing on long-term growth.
13. Keep an eye on your credit score
If you don’t know your credit score right now, use this link to figure it out (there are lots of other free resources you can use, too). It’s free, easy, and something you should do frequently. Many credit scores have a feature that tells you your credit score.
When you get multiple answers, keep in mind there are multiple credit bureaus who all have slightly different metrics—annoying, I know. But, the good news it that they’re all pretty similar and, once you please one, you can pretty much please them all.
14. Incorporate joy into your daily routine
Financial anxiety takes a toll. It’s a lot of work to differentiate between reality and what you brain tells you about money. So, the last tip for handling financial anxiety is to make sure you don’t always focus on the anxiety.
Do something you love everyday and take the time to relax. While taking care of yourself and doing your best to keep those intrusive thoughts from controlling your thoughts, give yourself a break because anxiety is exhausting.
