We’ve all been there before: You wake up in the middle of the night, and while you try to get back to sleep, your mind veers to the topic of money. Before you know it, you’re in a full-blown 2am panic.

What begins as a passing thought to remember to pay the bills can suddenly leave you worried about how you’d pay those bills if you lost your job, how to climb out of debt, or how to make your budget stretch for the month.

Finances are a common source of stress for Americans. In fact, the American Psychological Association found that 60% of Americans reported money was their greatest source of stress in 2019.

The good news is that you have the power to put yourself in control of your financial thoughts and actions. By taking a step back from your worst fears and making sure you control your cash — and not the other way around — it’s possible to dismiss those negative thoughts and actually get some sleep at night.

How to Manage Your Financial Anxiety and Stress

Everyone experiences anxiety from time to time. It’s your brain’s natural reaction to situations it perceives as dangerous. Unfortunately, sustained anxiety that disrupts your sleep and mental health becomes problematic and unhealthy over time.

If you feel anxious too often or for too long, it takes a toll on your brain and body. A mental health professional can help you find coping methods to help lower your anxiety and find balance in your day-to-day life.

If your anxiety stems from financial stress, however, there are steps you can take today to regain control and stop anxious thought patterns.

1. Focus on the Positive

There’s a lot to be said for focusing on the good aspects of your finances instead of the negative issues. Of course, thinking positively won’t magically pay your bills or stretch your budget, but it can help calm your fears. It can also help you recognize and appreciate your financial strengths, which could lead to solutions to some of your problems.

Grab a piece of paper and start listing the positive aspects of your money management skills. Perhaps you have a great job, are regularly socking money away in a 401(k) or an IRA, and have a nice emergency fund saved up.

Even when things are tight or money is causing you anxiety, taking a second to focus on where you’re going right can help you stay calm and clear your head.

2. Retool Your Budget

When I get the most stressed about my finances, it often means my personal budget is out of whack. Regular budget checkups are essential because life, and all of its expenses, are rarely constant. If you’re feeling anxious about money, taking stock and seeing how your finances look on paper helps you identify problem areas or calm your fears.

Check these items off your to-do list when your budget starts causing you stress:

1. Review. Go over your bills and expenditures and check that your numbers are accurate by ensuring your receipts and bills match up with your budget. Expenses often fluctuate from month to month because of car repairs, health emergencies, travel, and other unpredictable events. This might be the perfect time to allot a certain amount to an emergency fund for a little more peace of mind.
2. Increase Income. Check to make sure you’re in the black each month, because going into debt is usually one of the greatest causes of stress. If you find yourself in the red more months than not, it’s time to rethink your money-making strategy. Try taking on a second job or starting a side hustle to bring more money in. Or find ways to increase your income for the month via selling stuff you don’t need, picking up odd jobs like babysitting, dog walking, general landscaping, or using a site like Fiverr to look for freelance work or offer your services.
3. Reduce Expenses. Going over budget will definitely cause you and your bank account stress. While performing your budget checkup, look for areas in which you can reduce your spending. Call your service providers to discuss your options to reduce your phone bill or cut your TV package. Look for ways to get rid of small daily expenses, such as making your daily coffee at home instead of buying it every day. Reducing your expenses helps restore balance to your budget and puts you in control of your spending. If you need help cutting down some of your expenses, check out a bill negotiating service like Truebill.
4. Pay Off. Create a debt pay-off plan and stick to it so you have an idea of when your credit card balances, student loans, or car payments are going to be paid off — this knowledge alone can help you breathe a major sigh of relief. If debts from credit cards or student loans are making you anxious and you already have a debt pay-off plan, go over it and see if you can increase your payments and speed up your progress.

3. Banish Financial Shame

Past financial mismanagement can lead to feeling ashamed or embarrassed about your money situation.

Whether it’s a lack of money, incorrect budgeting, or simply being ignorant of proper financial practices, feeling bad about your money often snowballs into anxiety and worrying about how your past mistakes will affect your future plans. Unfortunately, that shame can perpetuate a cycle of anxiety and future mismanagement.

When you’re feeling embarrassed about money, remember that taking the time to educate yourself and organize your finances — even if the numbers make you squirm — sets you on a healthier path for the future and helps reduce financial shame.

There’s no shame in wanting to be better with money, so don’t feel awkward if you need to broach the subject with your partner, see an advisor, or ask for help. Doing so proves that you’re able to take control of your finances so your past habits don’t define your future.

4. See a Financial Planner or Advisor

Don’t make the mistake of thinking financial advisors are only for the wealthy: Making an appointment with a financial advisor helps calm your fears and ensures you’re on the right path for your financial goals.

Whether you want to save more for retirement, hope to start investing, or just need help defining your aspirations, an advisor can be of great assistance. If you don’t currently have a financial advisor, SmartAsset has a tool that lets you locate vetted advisors in your area.

Many financial advisors offer a no-obligation, low-pressure first appointment as a way to get to know each other and consider the basics of your finances. The process is much like seeing a therapist — but for your money. Just bring a list of goals and questions to the first appointment. If you feel comfortable, make it a long-term relationship.

5. Contribute to an Emergency Fund

The idea that the best-laid personal finance plans can be derailed by unknown events such as the loss of a job, illness, death, or natural disasters can be paralyzing.

If fear of the unknown has you second-guessing your financial plans, it’s a good time to evaluate your emergency fund — a nest egg of cash that remains untouched, except for emergency purposes.

A 2020 survey by Bankrate found that just 41% of Americans would be able to pay for a $1,000 unplanned expense from their own savings. The fear of not being able to pay for an emergency adds even more anxiety to the fear of an illness, accident, job loss, or car repair.

If you haven’t started an emergency fund yet, begin with a goal of saving up just $1,000 in a high-yield account from CIT Bank. Then, as you continue contributing, work your way up to at least six months’ worth of living expenses.

Knowing that you have money set aside for emergencies can help you rest much easier at night.

6. Stop Comparing Yourself — Especially Online

Social media is saturated with pictures of trips, cars, and other clear indicators of wealth. No matter how accurate your perception of your friends or social media influencers’ wealth actually is, comparing yourself and your finances to others’ adds to your overall stress level. Trying to measure up often makes you feel like you aren’t where you should be or like your efforts to save money aren’t enough.

The next time you find yourself falling into the trap of comparison, remember:

• You’re Not Seeing the Full Picture. You don’t know what’s in their bank account. Although a friend might seem to enjoy plenty of success, it could be courtesy of credit card debt or at the expense of a savings account for emergencies.
• You’re Not Seeing the Effort. Social media doesn’t always highlight the hard work and sacrifice that goes along with perceived financial success.
• Your Financial Life is Personal and Private. Your friends’ journeys are not yours — your experiences are unique. Remember that you have personal financial goals based on your individual lifestyle, family, and past experiences.
• Social Media Is a Highlight Reel. Most people post the best version of their lives on social media, so perception can be skewed. Consider the pictures of trips, cars, homes, and other big purchases part of a highlight reel without any of the financial issues most people experience.
• Financial Privacy is Healthy. Resolve to keep some factors in your life private, so you don’t feel the need to promote a perceived sense of wealth to your friends. Although it’s okay to share pics from your latest vacation, boasting online is unhealthy and can leave you spending more to maintain the facade.
• The Only Person You Can Change Is Yourself. Instead of gauging your success by that of others, create a measuring stick to control and track your own financial health, such as a savings account and an accurate monthly budget.

If all else fails and you still can’t stop yourself from feeling stressed and depressed because your friend just went to Hawaii, it might be time to put your social media accounts on hold until you can gain control of your feelings.

7. Consider the Worst

It might seem counterintuitive that one of the best coping techniques for financial anxiety is to consider the worst. After all, fearing “the worst” is probably a trigger for much of your money stress. Whatever it is to you, take a few minutes to actually ponder what would happen if your worst financial nightmare came true.

This year has been especially worrying, as the COVID-19 pandemic caused job loss, political uncertainty, health problems, and increased debt for hundreds of thousands of Americans. You might have seen some of your worst financial fears played out on a national level. How would you handle this situation if you had to do it over again?

After you realize and acknowledge your fears, put a contingency plan in place to diminish the power they hold over you. The truth is that bad things sometimes happen, but by predicting them and knowing how you’d react, you can find yourself firmly in control of almost any situation.

8. Educate Yourself

We tend to fear what we don’t understand. If fear of the unknown causes you to stress about money, turn those unknowns into “knowns.”

For instance, if you want to save for retirement but have no idea where to start, you may be worried about the future. Or if you think you need life insurance, but don’t understand the difference between the various types, you are likely feeling extremely confused.

Money anxiety stems from feeling uneducated and disoriented while trying to make choices about your financial future.

In the case of finances, ignorance is definitely not bliss. Calm your fears by educating yourself and performing the following tasks:

• Research retirement savings options online.
• Take a course through your local continuing education department on financial management and budgeting.
• Sign up for a college course in accounting.
• Take a massive online open course (MOOC) for beginning investors.
• Talk to a financial counselor about your options.
• Ask someone for advice who understands your particular financial question.

By taking matters into your own hands and educating yourself, money stops being a stressful enigma and becomes something you can understand and control.

9. Talk to Your Partner

If you’re managing money with someone else, such as a partner or spouse, shouldering too much of the burden yourself — or not shouldering enough — can cause definite stress. A clear division of financial responsibility reduces anxiety about where your money is going when someone else is involved.

Set a time to talk to your partner about your money worries. As you look over the numbers together, several things can happen.

First, your fears can subside when you realize you’re not alone in your struggles and aspirations.

Second, you can ask your partner to take on some of the burden of financial responsibility so you’re not budgeting and paying monthly expenses solo.

And third, you can come up with a new plan for spending and saving that you can agree on, allowing you both to feel at peace with your financial situation.

10. Retain Some Concern

Although constantly worrying about money is detrimental to your well-being, retaining some concern over your finances might actually protect you from making poor spending and saving decisions.

In some cases, mild financial anxiety is helpful. For example, being preoccupied with the future could inspire you to start saving more seriously. Or, extra caution about sticking to your budget may protect you from overspending each month.

Anxiety can also be helpful when it comes to investments. If your gut is telling you an opportunity is risky, you might want to talk to your financial advisor about putting your money into a lower-risk opportunity. If your spouse is pushing you to change jobs and locations and the idea makes you feel uneasy, some discussion might be required to avoid making a rash decision.

Perhaps a better word for “fear” is actually “respect.” Although being anxious about the future is a passive way to deal with finances, actively respecting money and treating it with the proper care can help you plan for the future — and control your cash.

Final Word

The bottom line is this: Staying up at night and worrying about money won’t magically make cash appear in a depleted bank account or help you decide how to save for your retirement. Instead, learning how to calm your fears and feel confident about your financial choices is a matter of education, action, and respect.

As you find proactive ways to stay on top of your finances, you just may find that the anxious feeling that comes when checking your bank balance dissipates in favor of control and confidence.