According to a survey of 1226 people in 2012, by the Institute of Financial Planning and National Savings and Investments 43% of people in the United Kingdom (UK) worried about finances but only 14% had taken the time to identify their financial priorities and plan towards them.
One third of those people explained that they were hoping to win the lottery.
Worry keeps us focused on problems and not on solutions
Evolutionary psychologists could argue that worrying kept us alive because ten thousand years ago it was important for us to anticipate potential problems.
Worry helped the tribe identify these problems, and others solve them.
Today we live in small family units or alone and don’t have anyone to help us share the worry and find solutions so worrying only leads to psychological distress.
How Worry Affects Financial Behavior
1. Gambling and get rich quick schemes
According to the gambling help website worry can lead people to gambling in order to alleviate stress. Gambling and get rich quick schemes can also lure people to find a quick solution to their financial problems.
2. Avoid finances
Research by the Institute of Financial Planning and National Savings and Investments shows that out of 43% of people that worry about their finances, only 14% take the time to focus on their finances.
3. Reduced savings
National Savings and Investments in the UK (2012) found that Britons who focus on financial planning save twice as much as those who worry about finances, saving £600 more than those who worry annually.
The study also found that people who worry about finances on a daily basis only check their finances once a month.
How to Stop Worrying about Money
The underlying cause of worry is fear of an uncertain future; the most effective way to stop worrying is to master this fear.
1. Become comfortable with uncertainty
Uncertainty is part of life and there’s no way to know the future with complete certainty. There are too many variables.
What becomes possible when you release your worry about money?
What you need more than money at any moment is clarity of mind, an action plan and courage to execute it.
When we see our worst fears and face them, they can no longer control us.
2. Question the validity of your worries
We have a stone-age mind, that’s used to dealing with life and death issues, when you worry your mind believes the problem you’re facing is physical not emotional.
Write down the worst case scenario on paper and then write down on paper that if this scenario does happen, you'll die. Now question if any of this is true.
When I was going through all my financial problems I believed that if I opened my bills and found myself in overdraft, with escalating bank charges I'd die.
For me lack of money meant death, which immobilized me and stopped me from taking action. Questioning this thought helped me see the fallacy of this belief.
3. Design a financial plan and stick to it
The best way to overcome uncertainty and stop worrying about money is to have a vision and a plan to make it a reality. Having a plan for your finances lowers anxiety and reduces stress because it gives you a roadmap of what to do next.
4. Spend time with your bank account
It's human to avoid anything unpleasant. However, facing unpleasant situations, like looking at your bank account every day, teaches your mind to stop running from your fears.
5. Get financial help
We all need a helping hand to get to the next level, so don’t be scared to work with a money coach, financial planner or financial adviser.
I would love to hear your thoughts about the impact of worry on your finances.
Let me know your thoughts in the comment section below.