How Worry Tricks You into Worrying More and How to Feel Good About Your Financial Future


Worrying about the future, especially when it comes to finances, is a common human experience. However, understanding how worry operates and learning strategies to mitigate its impact can significantly improve one’s mental well-being and boost your financial outcomes. Let’s investigate how worry tricks the mind into a cycle of increased anxiety and explore evidence-based approaches to worry less about your financial future.

financial worry

What is Worry?

Worry is triggered by the anticipation of future negative events. There may be “reason” to think bad things will happen, but worry is an emotion that is a reaction to the hypothetical, not reality.

While worry can serve a protective function by helping individuals prepare for challenges, it can be problematic when it transforms into chronic, excessive anxiety.

The Worry Trap

Worrying is a natural response to uncertainty, but when left unchecked, it can become a self-perpetuating cycle. Numerous research studies have shown that worry does not alleviate worry, it exacerbates it. A study published in Science Direct compared worrying to relaxation techniques and the result is that worry increases stress. And, research published in the Journal of Abnormal Psychology, excessive worry is a hallmark of generalized anxiety disorder (GAD). The brain’s attempt to solve problems and uncertainties can lead to a repetitive loop of worry, making it difficult for individuals to disengage from anxious thoughts.

Financial worries, in particular, can be exacerbated by a cognitive bias known as “catastrophizing.” This is the tendency to imagine the worst possible outcomes, even when they are unlikely. A study published in the Journal of Cognitive Psychotherapy found that catastrophizing is linked to increased anxiety and negative emotional responses.

Understanding the Impact of Worry on Finances

Worrying about money matters may seem like a logical response to financial concerns, but research suggests that it can have detrimental effects on decision-making. A study published in the Journal of Experimental Psychology: General revealed that individuals under financial stress tend to make riskier decisions, potentially exacerbating their financial troubles.

Furthermore, chronic worry can lead to physical and mental health issues, impacting overall well-being. According to a study in the Journal of Psychosomatic Research, persistent worrying is associated with increased levels of cortisol, the stress hormone, which can contribute to a variety of health problems, including cardiovascular issues and compromised immune function.

Breaking the Cycle of Financial Worry

While meditation, exercise, a healthy diet, and strong social connections are all proven methods of overcoming stress, the best course of action if dealing with financial anxiety is to develop a financial plan.

Financial planning is crucial for overcoming anxiety about a secure future for several reasons. It provides a structured approach to managing finances, instills a sense of control, and helps individuals make informed decisions about their financial well-being.

Here are key reasons why financial planning is essential in alleviating anxiety about the future:

Financial planning gives you a sense of control

Financial planning empowers individuals by giving them a sense of control over their financial destiny. When you actively engage in planning, you are more likely to feel in charge of their financial situation, reducing the uncertainty that often fuels anxiety.

You’ll develop goals and priorities

Financial planning involves setting clear and realistic financial goals. Establishing specific objectives, whether short-term or long-term, helps individuals prioritize their financial activities.

This clarity contributes to a sense of purpose and direction, mitigating anxiety associated with uncertainty.

Budgeting and expense management helps put your hands around immediate problems

Creating a budget is a fundamental aspect of financial planning. By tracking income and expenses, you gain insight into your financial habits and identify areas where adjustments can be made. Knowing that there is a plan in place to manage finances on a month to month basis can alleviate anxiety about unexpected financial challenges.

And, if you have debt, developing a plan to managing and reducing them can be reassuring. You can see a path forward for financial stability.

Being prepared for an emergency builds confidence

The first step to a financial plan involves building an emergency fund, which serves as a financial safety net in times of unexpected expenses or income disruptions. Knowing that there are funds set aside for emergencies provides a buffer against financial stress and anxiety.

An investment strategy increases a sense of calm and increases resolve

Financial planning involves considering investment strategies that align with individual goals and risk tolerance. Constructing a diversified investment portfolio helps build wealth over time, contributing to a more secure financial future and reducing anxiety about retirement or other long-term financial needs.

When you can understand why, how much, and how you should be invested, you are more likely to actually save and invest adequately and feel secure about what you are doing.

A detailed retirement plan (including “what if” analysis) calms concerns about the future

Planning for retirement is a significant component of financial planning. Knowing that there is a strategy in place to fund retirement years can alleviate anxiety about financial security in the later stages of life.

You’ll feel even better if you have tried various “what ifs” and make sure that your plan can withstand different possible events. Explore 20 eye-opening scenarios to try with the NewRetirement Planner.

Insurance coverage alleviates reduces uncertainty

You don’t know what is going to go wrong in the future. However, you are reasonably assured that things are unlikely to go according to plan.

Financial planning includes evaluating and securing appropriate insurance coverage. Whether it’s health, life, or disability insurance, having adequate coverage provides a layer of financial protection, reducing anxiety about potential unexpected events.

Gaining tax efficiency increases a sense of parity

Emotions around taxes are complicated. There is a sense of obligation to contribute to our community. However, it is also stressful, especially if you feel that you are paying more than your fair share.

Planning for tax efficiency is a powerful way to reduce financial stress, especially if you have significant income or wealth.

Try these 25 retirement tax planning tips.

A Financial Plan Improves Peace of Mind

Understanding the tricks that worry plays on the mind is essential for breaking free from the cycle of anxiety, especially in the context of financial concerns. By incorporating evidence-based strategies such as mindfulness, financial planning, cognitive-behavioral therapy, social support, and problem-solving, individuals can take proactive steps to worry less about their financial future and enhance their overall well-being.

Financial planning is a proactive and practical approach to managing one’s financial life. By addressing key aspects such as budgeting, emergency preparedness, debt management, investments, and retirement planning, individuals can build a foundation of financial security that alleviates anxiety and contributes to a more confident and stable future.


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