Skip to main content

Got Money Anxiety? How to Tame it and Make it Work for You

By Bonnie Schiedel

Published December 15, 2022 • 5 Min Read

Whether you’re a seasoned investor or just starting out, it’s normal to feel unsettled about your money sometimes – and maybe even more so lately as uncertainty swirls around rising prices and recession talk. You’re not alone. According to a survey1 this year by the American Psychological Association, 83 per cent of respondents said inflation was a significant source of stress in their lives, with the economy and money also ranking high.

But take heart; there are ways to help reduce money anxiety and even turn it into motivation to improve your financial picture. Here, Marlene Taube-Schiff, a Toronto psychologist and member of Anxiety Canada’s Scientific Advisory Committee, and Brenda St. Louis, a financial therapist and money coach in Vancouver, help shed light on money anxiety and offer tips to manage it.

How does anxiety affect your financial behaviour?

“Anxiety creates tunnel vision. And when you’re in a state of anxiety, you have an inability to make really good decisions,” notes St. Louis. “The problem with this market and this climate that’s going on right now is that it’s not always about taking action.” Sometimes, she says, people will feel tempted to do something — anything — to feel like they’re taking control of a situation, even when doing nothing may be the better course of action. But that doesn’t always net the desired results, especially if you’re making portfolio decisions solely based on the kind of wild market fluctuations that may smooth out over the long term.

Rumination is also common. “It’s as if there’s a tape player that’s on an endless loop, so it’s these thoughts that keep playing over and over again,” explains Taube-Schiff, adding that sometimes we go down a rabbit hole of “what ifs” and catastrophizations. “People will sometimes think ‘the more I worry and turn this over, [the more likely] I’m going to come to the answer.’ But we know that it’s not usually an actual problem-solving strategy,” she says. Catching negative self-talk early can help you feel less anxious, depressed, angry or fearful.

Anxiety is normal

That said, removing anxiety from your life is not the goal, says Taube-Schiff. “We all need anxiety; anxiety is a very natural emotion,” she points out. Sure, when anxiety is excessive and makes us feel paralyzed or panicky, or starts to push us to act in unhealthy ways, those are signs that “Whoa, maybe I need to look at what’s happening and see if I can figure out a different approach.” But “sometimes a little bit of anxiety is fine,” she says. “We can avoid danger because we feel anxious [or] we can be more motivated to do things.”

So, instead of getting rid of money anxiety, make it work for you. Part of that could include taking an approach that may feel familiar if you’ve dealt with other types of anxiety — creating healthy habits, for example. As you improve your mental health, you may notice your financial well-being start shaping up, too.

Start with the basics. Prioritizing sleep, making healthy food choices and getting 30 to 45 minutes of exercise a day are part of the foundation of good mental health, says Taube-Schiff. Consider using an app created by mental-health professionals that guides you through relaxation, breathing, meditation or mindfulness strategies. (Anxiety Canada offers one called MindShift.) “Those kinds of things can help people just connect with the present moment and try to de-escalate our emotions. There’s no way we’re going to be able to really think through the best next step if our emotions are so escalated,” Taube-Schiff says. Talking to someone you trust, whether it’s about money or just having a conversation, can also be very helpful.

Evaluate the facts. Create a budget and financial plan if you don’t have one, or revisit the one you do have. “Whenever we start to self-reflect and track things that we’re doing, it can help us pay attention to what is actually happening, versus what we think is happening,” notes Taube-Schiff.

Find trustworthy sources. Hiding under the covers and doomscrolling the news is not helpful, but neither is complete avoidance of your financial life. It can be a fine line to walk, says St. Louis. A newsletter or podcast by someone whose financial expertise you find reliable and understand is far better than a random sampling of often sensationalized media.

Buddy up. “Staying part of the conversation is one of the biggest things you can do. Have an accountability buddy — a financial buddy that might be going through something similar — so you can talk about things you’ve read, things you’re thinking about,” says St. Louis. “And it’s really nice to have people that you can talk to about money. Not everyone’s comfortable with it, but start to find people that are.”

Keep on learning. Research suggests that financial literacy can be a powerful tool. A 2021 study2 from the Finra Investor Education Foundation and the Global Financial Literacy Excellence Center at George Washington University found that people who were considered financially literate (they could answer three specific questions about interest rates, risk diversification and inflation) were less likely to feel anxious about money compared to people who didn’t answer the questions correctly.

While feeling anxious about money is common, it can be helpful to have a toolbox of strategies to help you face it head on and in a healthy way.

1American Psychological Association, “Stress in America 2022: Concerned for the future, beset by inflation.” 2022.

2Finra Investor Education Foundation and the Global Financial Literacy Excellence Center, “Financial Anxiety and Stress among U.S. Households: New Evidence from the National Financial Capability Study and Focus Groups.” 2021.

Investment advice is provided by Royal Mutual Funds Inc. (RMFI). RMFI, RBC Global Asset Management Inc., Royal Bank of Canada, Royal Trust Corporation of Canada and The Royal Trust Company are separate corporate entities which are affiliated. RMFI is licensed as a financial services firm in the province of Quebec.

This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.

Share This Article


Education Savings