Knowing how to stop yourself from worrying about money is crucial to your psychological and financial wellbeing. Worrying about money is one of the most detrimental health and relationship factors that exist. Are having sleepless nights because your finances are out of control? Maybe you are worried that you can’t save enough money. Then the 3 actionable steps below can help you to understand your finances and stop you worrying about money. Money is a tool for freedom when you have control of it. However, it’s common for money worries to make you feel anxious, stressed and depressed. Many people experience it but there are some great ways to overcome these money anxieties.
Financial Wellbeing Is A Major Health Issue
Money worries are also one of the most overlooked health factors and there are some shocking statistics to prove this. So you are not alone in wanting to find out how to stop worrying about money. According to one survey in 2018/19 financial wellbeing has a major influence on overall wellbeing and has a big impact on mental health. This survey revealed that those with financial worries are: 380 per cent more likely to suffer from anxiety and panic attacks; 470 per cent more likely to be depressed.40% of people are worried about money and this causes a number of behavioural and lifestyle problems:
- 880% more likely to have sleepless nights;
- 760% more likely to not to be able to finish daily tasks;
- 600% more likely to have a lower quality of work;
- 220% more likely to be looking for a new job.
How To Stop Worrying About Money In 3 Steps:
I understand that there are socio-economic factors out there which result in poverty and subsequently money stress and worries. However, a quarter of the UK workforce worry about money, which tells me that this isn’t just a problem for the impoverished of society.
The good news is that these steps won’t just help you to stop worrying about money, they will set you up on a money-saving avalanche.
#1 Take Control Of Your Finances By Starting A Simple Budget
The first step to taking control of your finances is to engineer a budget that puts you in the driving seat. Take the power away from your debts, credit card payments and bills with a reverse budget. Put your savings first and engineer some structure around your finances to ringfence your emergency fund and savings. Understand what type of budget best suits your personality.
The 80/20 rule also known as Pareto’s Principle states that for many outcomes roughly 80% of consequences come from 20% of the causes By tracking your expenses, you will also highlight the 20% of your finances that is driving 80% of your spending. This will help you to score some big quick wins. You can also use my 8 step guide to personal finance to help with this.
Knowing how much you can save and spend on a monthly basis and acknowledging where you think you are spending your money is essential. Apps such as Money Dashboard, Snoop, or Cleo can track and categorise your spending for you. Which takes just one extra thing off your mind.
Start to visualise and understand your finances from a birdseye view using apps such as Emma or even an excel spreadsheet to track your net worth. This combination of creating a structure, awareness and accountability of your finances. It will also help you feel more in control and stop you from worrying or feeling guilty about spending money.
#2 Build Your Money Triangle
This step is crucial and probably the most important. Like starting a fire, you need three things; oxygen, fuel and heat. Think of saving money as the same thing. To get saving money you should always do 3 things.
- Pay yourself first.
- Automate this payment.
- Pay it into a specific account.
This is the ultimate triangle of money-saving. In the personal finances community, those that are the most successful savers do these three things. These actions are something that helped me tripled my net worth in 4 years and are putting me on a path to financial freedom by 2036. It’s also how I stop worrying about money. This isn’t because I necessarily put in any extra effort into saving than anyone else. Rather I applied a positive money mindset to create successful money saving structures.
Build positive money systems where your money automatically moves to savings pots. This natural flow of money into savings and investments allows me to go on auto-pilot and not worry about money. Once you initially gain control of your finances and set up positive money structures if frees to up to think about earnings more and investing. This is ultimately how to stop worrying about money because you know it’s taking care of itself.
#3 Build Your Emergency Fund
Getting this trilogy of habits down is the foundational money behaviour you need to accomplish. Once you do it, saving money will become significantly easier and will allow you to build your emergency fund. A month at a time, save a manageable proportion of your income until you get to 3x or 6x your monthly expenses. This is ultimately how to stop worrying about money; as once you know that you can cover your basic needs in a worst-case scenario you will feel less anxious.
This will allow you to take any big financial hits and roll with the punches that life throws at you. Knowing you have this money in the bank will let you sleep a little easier at night, even if you have debts.You should always, always build this fund before you start to pay off any debt or credit cards. This is because you need to feel in control and comfortable with your finances. You will also feel like you have accomplished something positive with your finance. Once you have your emergency fund to fall back on, you can springboard into taking on the negative aspects of your finances such as debt.
How To Stop Worrying About Money: Extra Tips
The first step to tackling a problem is to define it and understand it. You can do this by taking this financial fitness test which will tell your finance score. The average score across the whole UK is 3.1. Those who have a Financial Fitness Score of 1-3 are far more likely to be stressed, more likely to be regularly losing sleep, to be distracted at work, and also more likely to leave their job. If you fall into this category then you could be making this very common money mistake, that is one of the main reasons people can’t save money.
- Understand your money and mood patterns. For example, the emotional triggers that make you spend.
- Lockdown your spending when your mood is low or you feel unwell.
- Automate your regular payments so you don’t get that spike or anxiety around bills and assessments
- Share your worries and be open about your money worries.
- Look after your wellbeing first, a better mental, physical and emotional state will help you make better money decisions.
Build An Optomistic Long-Term Goal For Your Finances
If you scored highly on the above assessment then it might not be that you are struggling with money but need a springboard to financial success. If you score a 4 or 5, I want you to take my quiz to find out if you are ready to pursue financial freedom and begin your journey to financial independence.
Before I started directing my savings for a specific long-term goal, I used to worry about money. How I stopped worrying about money was to define the amount I wanted to save to reach financial independence. As long as I stay on track to this goal I don’t feel guilty or worry about spending money. How I defined this amount was by calculating how much I would need to invest each month to retire early. Luckily for you, I have taken the hard work out of this process by creating a calculator that does this for you:
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