Even if you don’t have any pressing financial struggles, you still may find yourself tossing and turning at night thinking about money.
That’s the difference between financial stress and financial anxiety, says Megan McCoy, a financial therapist and professor at Kansas State University. Money-related stress “is something tangible that has short-term consequences,” she says. Think, “If I can’t pick up another shift this week, I won’t be able to pay off my credit card.”
Financial anxiety is tougher to pin down.
“Financial anxiety doesn’t have that external effect. It’s just this looming feeling,” McCoy recently told CNBC Make It. “It’s an ambiguous fear that something is going to go wrong or you’re not doing good enough or you’re not going to have enough in the future.”
To drill into why people may feel this way — and how they can best alleviate their anxiety — McCoy poses what she calls the “miracle question” to clients: “If you woke up tomorrow and by some miracle your financial anxiety was gone, what would feel different?”
The answer shouldn’t be about a number in your bank account, McCoy says. “What are the clues? What’s different about your life that makes you feel like the miracle happened?”
Pinpointing and addressing financial anxiety
If you do this exercise, you may find that what you thought was financial anxiety really had nothing to do with your money.
“It may turn out that you’re anxious about work or family, and money is just the tangible thing you can touch,” McCoy says. “We hyperfocus on it when it’s really the other issues.”
Or you may realize that your money worries are rooted in comparing yourself to other people.
“Many people have financial anxiety because they’re not where they wanted to be in life by a certain age, or they’re looking at their friends or even social media people and saying, ‘They’re doing better than me,'” McCoy says. “And so the financial anxiety actually stems from a self-esteem issue.”
The point of the miracle question is to refocus your thinking around money on you. McCoy suggests doing some further self assessment on this front. Ask yourself:
Do I have choices?Do I feel peace when I look at my finances?Am I aligning my spending with my values?
If the answer to all of these is yes, you may be in much better shape than you think. If not, or if life would look drastically different if the so-called miracle took place overnight, then you can start taking small, recurring steps to make that life a reality.
If the miracle version of you could, for instance, not worry about paying for your kid’s college and take vacations guilt-free, that won’t happen overnight. But you can open a 529 account and a high-yield checking account that you label “vacation fund.” Then set a certain dollar amount to put in every day, or every week.
The point is to identify how you want to feel and start taking concrete steps to get there, says McCoy.
“This question helps people articulate the kind of life they want to build — not just financially, but emotionally. Would they feel more free? Less tense? More present?” she says. “Once we clarify that desired state, we can identify a single, achievable action that brings that feeling a little closer today.”
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