What is financial anxiety? It's a good question. The definition can vary, according to whom you're asking. However, the simplest explanation of financial anxiety boils down to a feeling of distress around money. Those exhibiting symptoms may be unable to stop worrying about money or tend to lose sleep over financial issues.

It's a real issue, and one that most everyone has felt at one time or another in their life. In fact, a recent survey by the National Endowment for Financial Education® (NEFE®) showed nearly nine in 10 (88 percent) of Americans say the COVID-19 crisis caused stress on their personal finances. Which most likely led to a good many of those people experiencing financial anxiety in 2020 alone.

Other recent numbers show outstanding household debt hit a record high of $12.84 trillion — that's with a "t". According to a survey conducted by Harris Poll on behalf of the American Institute of CPAs (AICPA), 73% of Americans are living with debt-driven factors such as everyday expenses, a lack of income, mortgage costs, and student loans. That's almost three quarters of the population.

The debt is taking its toll well beyond just the interest Americans are being charged. According to the survey, 39% say they feel anxious at the mere thought of paying off their debt.

Is financial anxiety the same for everyone?

Where does this feeling of financial anxiety come from? And why do some have it and not others? There are a host of contributing factors — some not even related to poor financial health. For instance, some may have grown up in a household where their parents had money worries and talked about it all the time. Others may just be prone to financial stress — it’s in their DNA, you might say.

One of the biggest reasons people experience any kind of anxiety is a feeling of not having control. Finances and debt can certainly fall into that category for many, and at very different financial levels.

Financial anxiety can affect any income level. Someone in a lower income bracket may experience financial stress because they're not sure how they're going to put food on the table for their family. Whereas a person in a more middle-income bracket can experience the same level of stress worrying about how they're going to pay for their child's college education. Very different circumstances, but both cause similar levels of financial anxiety. This holds true for those in higher income brackets as well. Although their concerns typically aren't nearly as dire as providing food for their family, they can still experience the same financial stress as those with more pressing survival worries.

Something as innocent as a financial misunderstanding can create stress and anxiety as well. Sometimes it can be something mildly embarrassing like having your card declined at a store or restaurant. Other times it could be something more awkward like a friend or family member asking you for a loan. Either way, these little misunderstandings can create financial stress as well — which can affect your mental health.

What triggers financial stress?

It definitely depends on the person. It could be anything from losing one's job to a dip in the stock market...and everything in between. For some, it may be that they don't feel like they have enough in their retirement or emergency fund. For others, it might be credit card debt, a high-interest rate, or not having enough left over each month after paying those bills — or not being able to get ahead. Just money problems in general. The fact is, it's all about a mindset, so it can be different for everyone.

What are some signs of financial anxiety?

Anxiety about money can sneak its way into your life without you even realizing it -—until you look up one day and realize you're in the middle of it. And even then, most people don't realize that the cause of their discomfort is coming from money stress. Here are some signs to look for:

• Frequent arguments with your significant other or family about money - Are you and those close to you having more and more arguments about finances? Do they get more heated than they used to?

• General irritability/Decreased tolerance - Feeling more on edge these days? Does it take less to make you angry or reactive?

• Trouble sleeping - Do you find yourself lying awake at night feeling worried or thinking about bills or finances in general? Is your sleep more restless than it used to be?

• Isolating - Do you find you keep to yourself more than you used to? Do you no longer want to go out or be in social settings as much?

• Aversion to talking about money - Are conversations about money off-limits? Do you tense up when the subject is even mentioned?

If you can relate to any of these signs, you may be dealing with financial anxiety at some level. The first thing to know is that there's nothing wrong with you — you're just going through a challenge at this moment. Remember, just about everyone has been in your shoes at one time in their life. The kicker is, how you choose to deal with it, while not allowing it to affect your mental health.

How to cope with money anxiety

If you feel you're dealing with money anxiety disorder or stress — at whatever level — it's time to take some action. Luckily, there are a number of things you can do that can help you gain some relief. There are also some proactive steps you can make part of your routine that will help fend off financial stress before it starts to affect your mental health.

Let's start with ways to help alleviate the anxiety.

First and foremost, breathe

Take a few minutes right now and just breathe. Focus on every inhalation and exhalation. Some people find it helpful to breathe in to a four-count, and out to an eight-count. Choose whatever is comfortable for you — the main point is to bring your awareness to your breath.

This brings your thoughts and focus to the present moment. Since much of money anxiety has to do with worrying about the future, getting yourself in the present moment can be extremely helpful. This is something you can do each day, or several times a day if you desire.

Understand that this situation is temporary

Finances ebb and flow...all the time. Don't believe it? Look at the stock market. How about interest rates? And what about those millionaires who file for bankruptcy because of debt then become even more successful? Your finances can do the same, and the change could happen before you know it. Realizing that your financial situation is temporary can help you remain hopeful, which puts you in a solution mindset rather than a problem one.

Make a list of goals and post them where you'll see them

Where do you see yourself a year from now? Five years from now? Ten years? Do you have a dream vacation? A dream car? House? Financial freedom? A healthy emergency fund? Write them down. You can even find pictures and post them on your goal sheet. Whatever you think will inspire you the most — put it on there. And each day when you notice your goal sheet, instead of just acknowledging it, spend a few moments really thinking about those dreams. Feel them as strongly as you can. This process can have a profound effect on your mood.

Reflect on your relationship with money

Before you even start on an action plan, it may be extremely helpful to reflect on how you feel around the subject of money. Do you stress about it? Are you less responsible with it than you'd like to be? Does debt make you feel bad about yourself?

Whether you have a financial problem or not, a little self-reflection financial therapy can give you an opportunity to reframe any negative thought patterns and help you understand why you behave certain ways when it comes to finances. You can journal about it, or talk to friends or a financial advisor. You may even choose a financial therapist, who's trained specifically to help with your financial situation.

Time for action: Get the ball rolling towards your financial goal

Hopefully, the above steps have you feeling a bit more relaxed and ready to start taking some effective action towards your financial anxiety solution. Remember, this is a process. Little steps and continuous action can help you get to your goals. Knowing where to start can sometimes be the hardest part. That's why we've put together some tips that can help you get the ball rolling towards your financial goal.

Prioritize. Prioritize. Prioritize.

If you have multiple revolving debt bills, thinking about paying all of them off can feel impossible. And that may be true...if you were to try doing it all at once. But it's much more achievable if you break your debt down into pieces — you know, the old “eating the elephant one bite at a time” thing.

What if you were to pay the minimum on all but the one bill you want to focus on? Then, pay as much extra as you can each month on that one until it's paid off? And once that debt is paid off, move to the next one. The trick here is to prioritize the bills first. For instance, you may want to start with the one that charges the highest interest rate. However you decide to prioritize them, the action itself will help you determine your next step.

Create a solid budget

Remember, a big part of financial stress is feeling like you don't have control. Creating a household budget can help you gain a sense of control when it comes to your finances. It can also help you become more aware of where your money goes and if you can afford to make extra purchases while remaining fiscally responsible.

Check your bank accounts regularly

You have to know what you’ve got in order to know where you stand. When you're dealing with financial stress, it can seem a little scary to check your bank account. Heck, it may show something you REALLY don't want to see. But the fact is, it's the best way to get a clearer picture of your finances. Not only can you track your spending and keep up with your current status, but you can also make sure there are no potentially fraudulent transactions.

Learn more about finance

Whether it's a book, a podcast, or a lecture series, learning more about how money works can never hurt. It's funny, the one thing not taught in school is the one thing every person has to deal with on a daily basis — personal finance. It stands to reason as much as we interact with money on a daily basis, we could use all the knowledge we can get to help us thrive in our financial situation. And the more you know and understand about finances, the more control you feel — which leads to less financial anxiety.

Seek out products that can help you achieve your goals

Believe it or not, there are a host of different types of financial products that can help you get to where you're going. From checking accounts that give you a high interest rate to loans that allow you to pay extra each month but offer you the option to take it back if unexpected expenses arise that your emergency fund can't cover. You just need to find the ones that work the best for you and your situation.

If you can start taking these actions, there's a good chance you'll not only relieve your financial stress, but you may also find your finances in a much better place sooner than later. If nothing else, you'll at least have a plan of action that can help you see a light at the end of the tunnel. Remember, financial anxiety is nothing to be ashamed of — most people have dealt with it at one point. Just do your best to stay focused and keep pushing the best you can. This too shall pass.