Feeling stressed or anxious is a totally normal response when you’re facing financial difficulties.
Whether you’re dealing with a spiralling cycle of high interest credit card debt you just can’t seem to escape from, or are struggling to make repayments on a mortgage or loan due to an unexpected change in personal circumstances, debt anxiety can feel as if you’re carrying a heavy weight on your shoulders.
While this is a common experience, this anxiety can start to take a toll on mental and physical health. With this in mind, it’s important to understand when it’s time to seek professional help and find the right debt solutions that can help you cope with your debt anxiety for good.
To get you on your way, in this guide we delve into what financial anxiety is, identify its signs, and provide practical actions you can take to manage your debt-induced anxiety.
What is financial anxiety?
As the name suggests, financial anxiety is the persistent feeling of stress, fear and worry caused by an individual’s own financial situation. Most commonly triggered by mounting debt – hence also being known as debt anxiety – this condition can have significant implications on how you choose to live your life. Indeed, in the worst cases of financial anxiety, individuals can be struck with paralysing worry or stress, leading to wider mental health concerns.
Unfortunately, cases of financial anxiety have increased in the UK in recent years, as the so-called cost of living crisis continues to impact people’s lives. According to a 2023 survey conducted by the Mental Health Foundation, in the month of May 20% of the 6,000 adults questioned admitted that debt had made them feel anxious in the previous two weeks. That’s a fifth of all adults surveyed. However, despite this condition being so prevalent, it can be deceptively difficult to spot in others.
What are the signs of financial/debt anxiety?
Whether you’re worried about yourself or a loved one you suspect may be struggling with debt, identifying the signs of financial anxiety is vital for addressing the issue. Below, we take a look at a few of the most common signs that could be seen as debt anxiety indicators:
- A feeling of constant worry
The most clear cut sign: if your daily thoughts are dominated by concerns or feelings of stress about money, bills, and debt, you may be experiencing financial anxiety.
- Physical symptoms
Just like any anxiety disorder, debt-induced stress can cause physical symptoms, as well as mental ones. Debt anxiety can often manifest itself in the form of muscle aches and tension, headaches, and even sleep disturbances.
- Impaired decision making
Financial anxiety can literally cause you not to think straight. Similar to how clinical depression can cause impaired decision making, debt anxiety can impact the rational side of your brain. This can lead to further poor choices regarding spending and budgeting, often making a bad financial situation even worse.
- Avoidance and isolation
It’s common for individuals living with debt anxiety to withdraw from social activities and avoid friends and members of their family. Neglecting to discuss or engage with anything to do with financial matters altogether is also a common sign. This is often referred to as ‘financial head-burying’ (also known as “Ostrich Syndrome!).
How to cope with debt stress
As we’ve discussed, debt anxiety can have a devastating impact on an individual’s life – one that not only impacts bank accounts, but also mental and physical wellbeing. Fortunately, there are ways of learning to cope with, confront, and even overcome the challenges posed by debt anxiety. Below, we take a look at four practical coping strategies to try out.
1. Accept you’re struggling with debt
Although it may be a cliche, acceptance really is the first step towards overcoming debt anxiety. By burying your head and ignoring the issue, you’ll only exacerbate the problem and the impact of your anxiety is likely to grow bigger. Although it can take time to face the reality of your situation, only when you accept that you’re struggling will you be able to take positive steps forward to tackle the root cause. Remember – admitting you’re struggling and seeking help is a strength, not a weakness!
2. Talk about your debt
Once you’ve accepted the reality of your situation, it’s time to open up. Talking about your financial struggles can be really tough, but it’s an essential step in breaking the cycle of anxiety. It’s a good idea to open up in stages. Start by sharing your worries with a family member or close friend. Next, if your situation warrants it, organise a meeting with a professional, such as a financial advisor.
3. Seek support and take practical action
Following on from our second tip, seeking professional support and then putting a practical solution in place is essential when dealing with financial anxiety. Whether you book an appointment with a financial advisor, speak with a charity such as MoneyHelper, or get in touch with a debt management specialist such as us here at MoneyPlus, getting the ball rolling on a potential solution can make all the difference to how you’re feeling.
Professional support could help you with budgeting, negotiating with creditors, and/or entering into a formal debt management solution, such as an Individual Voluntary Arrangement (IVA), a Debt Management Plan (DMP) or any other available option. Naturally, taking these practical steps towards financial stability can provide relief from debt anxiety and help you move forward.
4. Change your lifestyle going forward
Finally, in order to fully break the cycle of debt anxiety, it’s important to change your relationship with money and spending going forward. This can be as simple as creating a realistic budget each month and sticking to it, for example. Budgets should prioritise essential expenses while allowing for savings and debt repayment. For further budgeting tips to get you started, check out our top 5 cash saving tips.
On top of this, you may want to look for additional sources of income. These second jobs or profitable side hustles can boost your primary income and provide a larger buffer between you and financial instability going forward. If your second source of income is a passion project, this can also have positive mental health benefits.
At the end of the day, coping with debt anxiety comes down to two factors. Firstly, dealing with the psychological causes of the condition, before then putting practical actions in place to tackle the root cause of the issue.
Here at MoneyPlus, if you’re struggling with debt anxiety, we encourage you to seek both emotional and professional advice. It’s important to remember you’re never alone, and there is always help available to regain control of your financial situation.
