Money Health

4 Useful Tips to Help You 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 around you? Does the thought of balancing your checkbook make your stomach turn? If so, you may suffer from a mild version of financial phobia.

Financial 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’ve ever experienced symptoms of financial phobia, you aren’t alone. A study from Cambridge University in the U.K. found that 45% of people who suffer from financial phobia 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.

The same Cambridge University study found that 20% of people living in the U.K. may experience some form of financial phobia, whether it is a fear of debt, a phobia of spending money, or a phobia of money in general. Although a study like this hasn’t been performed in the U.S., chances are that the results could be similar.

How to Deal with Financial Phobia

In 2016, the typical U.S. household that carried a credit card balance owed an average of $15,654 in credit card debt—an amount that has steadily increased in the past 20 years. If you’re one of the hundreds of thousands of Americans who owe $15,000 or more in credit card debt, 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.

If you feel so defeated by your financial situation that you’re beginning to experience financial phobia, 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 causes and risks of financial phobia so that you can make a plan to conquer your financial phobia and improve your finances.

What Causes Financial 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 financial phobia 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 phobias feel they have lost control over their finances and don’t know how to regain it. However, avoiding your finances because of your financial phobia could lead to more problems in the future.

What Are the Risks of Financial 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 are the 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 Financial Phobia

The first step in dealing with financial phobia is admitting that you have a problem. Acknowledging your debt phobia could help you set up a plan to overcome your fears. Here are a few techniques that could help you get rid of your financial phobia for good:

Take It Slow
One of the best ways to deal with financial 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 with your phobia could help give you the courage to address your issues head on instead of avoiding the problem.

Assess Your Phobia

Knowing why you’re struggling with financial phobia 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 financial phobia might be to make a plan to get out of debt.

Get Professional Help

You don’t have to deal with financial phobia on your own, especially if you’re struggling with a fear of debt. After identifying the reasons why you’re experiencing financial phobia, it may be easier to get help. Depending on the cause of your financial phobia, resources like adult education courses in personal finances could help.

If you’re experiencing financial phobia because you’re struggling with heavy debt, download our free debt guide to review your debt relief options and find the right solution for you.

Our Certified Debt Consultants talk to people every day who are anxious and worried about how to deal with $10,000 or more in debt. Their job is to help these people, and they could help you too. Over the phone, they will be happy to walk you through several debt options (not just the FDR program) and help you find a solution that might work best for you. Request a free debt evaluation 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 financial phobia in the past!

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.