Why Do We Worry About Money?
| August 30, 2012 | Posted by Roshawn Watson under Personal Finance, psychology |
By: Roshawn Watson
Some of us regrettably major in worry. Worry is sometimes easier than picking ourselves up off the ground, scraping together good solutions, and having faith that things will work out.
Although financial worries are very prevalent, particularly due to the economy, they are in no way innocuous. According to a poll on About.com (part of the NY Times ), 7 out of 10 report they are “very stressed” about their finances. The American Psychological Association found that 80% of survey participants reported having significant stress because of the economy, which was up from 66% in 2008. The National Sleep Foundation found that 27% of people surveyed in 2008 had sleeplessness due to economic anxiety. According to the NY Times , the National Suicide Prevention Lifeline calls jumped to 50,158 in January 2009 from 39,465 a month in January 2008, and economic stress more frequently “played a central role.” Financial worries are typically a top cause of clinical anxiety, depression, and relationship problems. Increasingly people are complaining about of is referred to as “Recession Anxiety,” for example, where they suffer panic attacks, have insatiable appetites for economic news, lose sleep, lose weight, are placed on medications, require therapy sessions, and have marital discord.
Interestingly, many of these people are gainfully employed and haven’t personally experienced “significant economic losses,” yet they are worrying that they will or are reacting to the “pervasive economic uncertainty” (NY Times ). Here are five reasons why we worry about money and some ways to deal with it.
Lack of Confidence with Money
One reason we worry is because of our lack confidence managing money. Consequently, we shy away from investing, eliminating debt aggressively, and maintaining adequate solvency and insurance. Lacking confidence with money often stems from incompetent education. Many of us are not being exposed to solid financial teachings.
Fortunately, we can become more confident and better equipped to manage our finances through experience and learning. After all, confidence is not the absence of ability but a lack of belief in your ability. Pick a few podcasts (such as Motley Fool Money and Dave Ramsey Podcast), read at least 3 solid personal finance books (such as Millionaire Next Door and Rich Dad, Poor Dad ), subscribe to a few popular personal finance magazines (such as Money and Kiplinger ), watch CNBC, read quality personal finance blogs (such as Watson Inc, Free Money Finance, The Simple Dollar, and Average Joe’s Money Blog), look for seminars and conferences in your area, join organizations, and post on forums (such as Savings Advice or Bogleheads). Of course, you don’t have to do all these things nor do you have to agree with all of the advice your read. Find a few that you like, and read and interact with (if applicable) them consistently, and you will be amazed at your progress. A knowledge deficit is among the easiest to address.1
Confidence is not the absence of ability but a lack of belief in your ability.
Fear of Screwing Up
Closely related to lack of confidence is fear. Fear of failure can be logical, but we often lose perspective. For example, anyone over 12 years old has made financial mistakes. In fact, expecting everything to be perfect would be more irrational than expecting some minor missteps. Fortunately, not all missteps, including financial flubs, are mission critical. Thus, we shouldn’t be so terrified of making them that we paralyze our progress. It was Henry Ford who stated “Failure is the opportunity to begin again, more intelligently.”
Related Article: The Price of Eliminating Failure
If you realize that you are in fear, it is paramount that you deal with it before it causes you to lose financial victories. For example, I remember when I resigned to purchase my first outright. At the time, it was a staggering sum to come up with, as I was still a teenager. I had plenty of reasons to doubt my then unproven plan. I knew I set myself up for ridicule if I was unsuccessful. However, I knew that I didn’t want a car note. Had I succumbed to fear, I would have never had the financial courage to demand that the dealer go down on price by 40%, which he did. Fear will halt you only if you let it.
Fear is pain arising from the anticipation of evil. – Aristotle
Conditioned to Worry
One reason worrying about our finances is so common is because there is comfort in the familiar. When we are conditioned to worry about money, intense focus on the bad becomes very familiar territory. We begin to see evil even in the most innocent situations. Nothing is above reproach, and just about everyone has an ulterior motive. We prepare ourselves for an inevitable disappointment in every situation. While mentally and emotionally preparing yourself for the worst can make handling a crisis more mechanical and remove some of the accompanying insanity associated with it, it is important to remember that many crises are brought on by worry in the first place. The following passage illustrates this point:
If you fear employees will rip you off, and set up spying processes—you will get ripped off.
If you fear employees will steal from you, and institute lie detector tests—they will steal.
If you fear your employees will talk to search firms, and tell the receptionist to screen calls—they will talk.
If you fear your employees will take your secrets to a competitor, and force them to sign non-competes—they will try to take secrets to a competitor, and if they can’t do that, they’ll bring on a whole lot of other nasty side effects. (Charles H. Green)
Mr. Green is right, “you empower what you fear.”
Worry doesn’t empty tomorrow of its sorry. It empties today of its strength. Corrie Ten Boom
At the end of the day, I don’t want crisis to become commonplace or an everyday concern. I don’t want to be weighed down by a hundred possibilities of why things won’t work out. I don’t want to die a thousand deaths because I can’t control my thoughts.
A coward dies a thousand deaths. A soldier dies but once.
Worrying Feels Like You’re Doing Something
Worrying also makes us feel like we are doing something. This is why it is vital to distinguish between busyness and productivity. Just because we are doing something pertaining to a problem doesn’t mean we are solving the problem. I consider it this way: you’re productive when there is an authentic alignment of your actions and your goals and when those actions correspond to incremental improvements in your situation. Anything else is deception.
For example, I think some financial news outlets can be a big culprit of this. There are many journalists who purport to just be stating the facts but do nothing to suppress their own fearful biases. Case in point, last year USA Today ran an article indicating Americans were so much poorer, but after we worked through the numbers, much of the commentary was unfounded and was hyperbole. It is amazing what you can do with numbers and statistics; people frequently manipulate or cherry-pick numbers to suit their arguments. Regardless of intention, this obscures the real issues.
Related Article: Did Americans Get Poorer or Is USA Today Wrong
While being uninformed about your finances carries its own liabilities, as you are collecting information, be sure to watch for biased commentaries designed to affect your emotions but lack the substance to improve your situation. If you don’t, it will be very easy to content with fretting over finances instead of doing the very things that would strengthen your financial position and remove the threats to your financial sustainability.
You’re productive when there is an authentic alignment of your actions and your goals and when those actions correspond to incremental improvements in your situation. Anything else is deception.
Sometimes Worry “Works”
As much bad as worrying brings, I admit occasionally “works.” For example, that uneasy feeling that you overspent can cause you so much discomfort that you choose not to spend other discretionary funds. Sure, it is technically the action of not spending rather than the worrying is what really improved your finances, but your wallet doesn’t know the difference! The worrying prompted a behavioral change, which is what mattered. This is one of the main reasons that many of us allow ourselves to worry: there are fortuitous times when it leads to a beneficial outcome.
Even a broken clock is right twice a day.
According to Jerry Porras, “lots of enduringly successful people suffer the dark side, the ‘shadow self’…(they) chose to use pessimistic behaviors selectively when the stakes were great. The most notable place for pessimism, of course, is when the cost of failure is death… Once you take death … out of the equation; however, it’s tougher to measure what is rationale…”
In other words, if you expect enduring success, you must possess an ability to discern the situational differences between when a mistake would be absolutely fatal (high stakes) versus when it would be of marginal consequence (low stakes). Otherwise, you run the risk of being so overly cautious that you miss out on many opportunities that would enrich your future.
Closing Thoughts
Who by worrying can add one inch to his stature is a paraphrased, popular biblical reference about the futility worrying. Simply put, worrying usually doesn’t accomplish anything but to weigh you down mentally, physically, and emotionally, and it takes you away from the very things that could prevent or solve your financial problems: strategic planning and acting on your convictions. I’m convinced that any benefit achieved by worrying is grossly outweighed by the havoc it wreaks on your life. Financial worries have been linked to stress, anxiety, diminished quality of life, and depression, and decline in physical health. 2 Additionally, worrying robs you of the strength to fight. It causes you to focus on how big the problem is instead of how big you are. The goal isn’t to deny that cares and concerns exist but to instead focus so much on the endgame or answers that they become more real to you than the challenges you face. Don’t bank on getting lucky by worrying. Make your luck today.
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1 This paragraphs includes affiliate links.
2 according to multiple studies including those conducted by the American Psychological Association and American Society of Clinical Oncology
Interesting. I second the part about "learning". Early on I used to "worry" somewhat about presentations to groups I didn't know. I learned that preparation and learning what the group was interested in made a huge difference in eliminating worry.
As an investment advisor the one thing I want to know on whether individuals can manage their own money is if they are worriers. If they are they will tend to do horribly with their investments as their emotions rule.
I can totally empathize with you regarding giving presentations. For me, preparation makes the difference between night and day in this regard.
In terms of investing, learning MY riskb tolerance has been pivotal.
You must be mistaken….those other places of learning are actually good ones! I'm sending this to my mother right now.
On a serious note, worry works for me. It's when I think I'm behind that I surge harder. It's when I become paranoid that there's something I need to know to be successful I actually go out and search for it. This worry takes my goal of education and focuses it toward the right topics. Another great piece!
You have a great approach to PF! Bravo to you! I am glad you are NOT paralyzed by worrying. I wonder if you are just being conscientious instead. I have just seen worry rob so many people of strenght to fight, as they have little hope for tomorrow.I rarely associate paranoia with productivity. That said, just because you are paranoid doesn't mean that are are wrong. Thanks for the comment.
Excellent article about fear, uncertainty, conditioning, and behavior.
Thank you Dave. I appreciate your support!
If you are only worrying, you are wasting a lot of energy. If you use your concern over problems to be proactive or solution oriented, you are better off. Worrying in it self is a little lie the complainer, they wast energy and affect others with their negative thoughts unless it leads to action.
That's pretty insightful. It also makes me sad because it is easy to fall into this situation.
awesome post, roshawn.. i think we are conditioned from a very young age to think that money is really one of the very most important things in life.. money is needed to care for yourself and your family.. money is needed to get a date.. money is why we have to go to college.. money is what we will need for retirement…
with all this talk pervasive throughout our entire childhood.. it is no wonder we all have such anxiety about losing it and/or not having enough…
-jefferson
Thanks so much Jefferson for sharing your insights. Money is DEFINITELY important, just like you say. Unfortunately, we (society at large) spend so much time coveting and worrying about it rather than earning and managing it properly. Great comment 🙂
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I don't spend a lot of time worrying about money anymore. We make enough money to pay our bills and we have saving to last us through the rough patches. The confidence comes from keeping our expense down and working hard in the past to save up.
I guess it is like sports or anything else. Practice gives you confidence to face the game without worrying too much. Just do it.
Joe, I'm so happy that you shared your journey. If you can give up worrying, then perhaps there is a great deal of hope for some of the rest of us seasoned worriers. It is a good habit to break, especially the way you did, which is by improving your working knowledge and confidence about money. That's a lesson we can all take to the bank.
Gosh this post is about me. I come from a long line of worry warts. It is really hard to undo when you have been conditioned to behave that way. I must say I am much better than I was but I still have moments that catch up to me. I definitely think realizing you can't control everything helps. It also helps to think before you act and have a plan. That seems to help me make good decisions where I don't worry about the outcome.
Thanks for sharing your progress. I think most of us have to resist worrying. I know I do. I have broken the habit, but there are times when I can't necessarily figure out how I want to accomplish big things that I am tempted to retreat to worrying. By being knowledgeable about what is going on and being diligent about not worrying, I think we can overcome this urge. Great comment!
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Do you have a background in psychology? I forget, but your posts always remind me of something I'd hear from a therapist (and I mean that in a good way!). For me, I fall into the category of "worrying feels like I'm doing something." I can convince myself that thinking about my finances (aka, worrying about them) is a productive way to spend my time.
I've had a few courses in psychology (three I think), but that's the extent of my formal background. I do tend to read psychology books and fancy the topic in general.
With regard to "worrying feels like I'm doing something," I think it is very sad that we tend to allow worrying to masquerade as productivity, when it is typically anything but helpful. Thanks for the comment Elizabeth.
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I think you nailed it with there being comfort in the familiar. It's true. I think that's why a lot of people don't turn things around for themselves. They're just not famililar with how else they can be. And learning new things or trying a new way of life can be so overwhelming.But trying and failing again and again is still better than not trying at all and just stewing in misery!
Agreed. Our comfort zones are designed to maintain the status quo, even if that means worrying about our futures. I say no thank you with a status quo that limits my potential. I appreciate your comment.
I had an acute fear of financial failure when I was a young adult. A lot of it had to do with some poor deicsions that left me very broke and not having the financial experience to deal with it. Another part was growing up as a kid in a household where money was always tight. I thought the fear was normal for someone in my situation.
I was easily able to overcome my fear by learning to save money. The more I saved, the less I had to worry and the more I could relax. Even major problems like a layoff or a broken car, don't make me upset, because I have the resources to deal with them. There is nothing money can buy that equals the peace of mind from having some saved.
Dear Bret,
That's really profoundly insightful. The origins of financial worries are often rooted in negative past experiences and multifactorial, just like you indicate. It's amazing what we accept as "normal." I'm glad you were able to overcome your fears through building a solid financial foundation. Unfortunately, to many people "financial peace" is an oxymoron. Thanks for the comment!
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Just because you make decisions to minimize a financial hit (ie, good stewardship) does not mean that you are worrying about money. Worry is rooted in fear whereas good stewardship is rooted in faith.
Actually car accidents are really bad that we all know and also we know that these accidents happen only because of two reasons. One is because of the careless driving and another is for the vehicles break down. So, to avoid these accidents we have to drive our car carefully and properly and also we have to repair our vehicle from good repair centers whenever required to avoid our vehicles break down and for its smoother running. .
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Being a prodigious, is a simple term of lack of guidance and lack of knowledge on how to handle on certain things that we always think that we couldn't do. People should know that a lot of confidence should take place and strong mind to overcome our fear.
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