Money Health

How to Understand and Conquer Financial Phobia

financial phobia
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Have you ever avoided your mailbox because you don’t want to deal with your credit card bills? Do you feel anxious when someone brings up the topic of money? Does the thought of balancing your checkbook make your stomach turn? If so, you may suffer from financial phobia.

This phobia is the fear of dealing with personal financial issues like budgeting, investing, paying bills, or even checking your bank account. It can come in many different forms, from refusing to open your bills, to panicking or feeling paralyzed every time you think about your financial situation.

If you feel so defeated by your financial situation that you’re noticing similar symptoms and behavior, there are steps you could take to overcome your fear and start making your financial situation better. But first, it’s important to understand the prevalence, causes, and risks of this phobia so that you can make a plan to conquer it, head on.

Financial phobia afflicts many

If you’ve ever experienced this type of fear, you’re not alone. A study from Cambridge University in the U.K. found that 20% of people living in the U.K. suffer from some form of this phobia, whether it’s a fear of debt, of spending money, or of money in general. Of those who have it, 45% feel their heart race when dealing with personal finances. Another 12% feel sick, and an alarming 15% become immobilized when they have to work on their finances.

Although a study like this hasn’t been performed in the U.S., chances are that the results could be similar. In 2019, the average credit card balance in the U.S. reached almost $6,200, but many people owe more than $15,000 in credit card debt alone. If you’re in a similar position, it’s very likely that you feel overwhelmed about your financial situation. You might even try to avoid financial matters at all costs because it’s just too much to think about.

What causes this type of phobia?

Some people experience financial phobia because they associate money with negative experiences like being in debt, losing a job, or having a serious financial emergency. Other people may have it because of past arguments they’ve had with loved ones over money, or because they never learned about personal finance and don’t know how to deal with it.

Phobias aren’t always rational, but many people with financial fears feel they have lost control over their finances and don’t know how to regain it. However, avoiding your finances because of your phobia could lead to more problems in the future.

What are the risks of this fiscal phobia?

If you’re suffering from financial phobia, your finances could be at serious risk for the following reasons:

  • You may run the risk of overdrawing your accounts if you don’t check your bank statements.
  • You could miss payments if you don’t check your bills regularly.
  • By avoiding your credit report and FICO score, you may not know that you’ve been a victim of identity theft.
  • Banking errors, overdrafts, and missed payments could lead to fees, higher interest rates, and fraudulent charges.
  • Saving, investing, and managing your money is very difficult if you don’t monitor your accounts.

The bottom line is that ignoring your finances could end up being much scarier than confronting your financial issues head on. While it may be hard to face your fear of debt, it is possible to overcome your debt phobia and deal with your finances better if you have the right resources.

How to deal with your phobia

The first step in dealing with your phobia is admitting that it exists. Acknowledging your fear could help you set up a plan to overcome it. Here are a few techniques that could help you get rid of this phobia for good:

Assess your phobia

Knowing why you’re struggling with financial fear could be the key to overcoming it. For example, opening your credit card bills may trigger your fear of debt because you’re worried that your debt is too high and you’re not sure how to deal with it. If that’s the case, the best way to overcome your phobia might be to make a plan to get out of debt.

Take it slow

One of the best ways to deal with this phobia is to address the issue in small doses. At first, it may be hard to confront your fears. But every small step you take, like using an app to monitor your monthly spending, could help you rebuild a healthy relationship with your finances again.

Talk to someone you trust

It’s important to have a support system whenever you deal with your fears, and financial phobia or debt phobia is no different. Having a friend or family member to call when you’re struggling could help give you the courage to address your issues head on instead of avoiding the problem. Depending on the cause of your phobia, resources like adult education courses in personal finance could also help a lot.

Get professional help

You don’t have to deal with financial phobia on your own, especially if you’re struggling with debt. Freedom Debt Relief is here to help you understand your options for dealing with debt, including our debt relief program. Our Certified Debt Consultants talk to people every day who are anxious and worried about their debt and can help you find a solution that will put you on the path to a better financial future. Find out if you qualify right now.

By adjusting your attitude about your finances, creating a support system, and getting help dealing with your fear of debt, you could put your phobia in the past!

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John Russo is a Creative Manager at Freedom Financial Network. His goal is to make the world of personal finance more accessible so that everyday people can find the right financial solutions for themselves. In his free time, he enjoys hiking, reading pretty much anything, and spending time with his fiancée and two cats.