Do you get sweaty hands and a racing heart when checking your bank account? Do you feel like an imposter when it comes to money matters? You’re not alone. In fact, 2 in 5 women suffer (46%) say money issues have negatively affected their mental health, prompting feelings of anxiety, depression, sleeplessness and stress. This manifests in 52% of women saying they felt stressed checking their bank account. It’s therefore no surprise that 57% of women say they don’t have enough saved for emergencies.
We've all been down this road. Ignoring bank statements and pretending our overdrafts don’t exist. But for some, the fear of money can be overwhelming and burying our head in the sands is often the default position. But fearing your finances and not facing them head on is proving to set women back financially. So here’s a breakdown of what financial phobia actually is and what you can do to turn that sense of fear into a motivating boost of empowerment.
What is financial phobia?
Researchers at Cambridge University have discovered a psychological condition they are calling financial phobia, which affects more than 9 million people in the UK alone. It’s essentially the “ignorance is bliss” (or not so bliss) attitude, which ends up manifesting in some alarming physical symptoms when faced with the task of managing your finances. The study revealed the following symptoms:
- 45% – have their heart racing
- 12% – feel physically ill
- 11% – experience dizziness
- 15% – become immobilised
Other symptoms may include feeling guilty or bored, anxiety and a lack of control.
Dr Brendan Burchell, of the faculty of social and political sciences at the Cambridge University, said: “Financial phobes can be intelligent people who are high achievers in most areas of their lives – they are not irresponsible, feckless or spendthrifts.They have become entwined in this psychological syndrome which makes it very difficult for them to deal efficiently with their personal finances.”
Why are more women experiencing financial phobias?
Well, traditional gender roles may just have some role to play in this. Over time, women have been programmed to believe that they “just don’t do finance” because they’re simply “not good at it”. There are countless studies which reveal women have lower financial literacy than men. It’s therefore no surprise that women don’t feel confident with an Excel spreadsheet or getting their financial priorities in order.
How to overcome financial phobia
With some quick-fire methods, you can conquer your financial phobia and feel financially empowered. From budgeting to setting saving goals, every step counts towards your financial independence.
Overcoming financial phobia means feeling empowered in your financial decisions.
Step 1: Consider why you’re afraid
Is it the fear of confronting your mounting debt? Or do you lack confidence when it comes to financial planning? Whatever the reason for your financial phobia may be, it's essential to recognise that avoiding your financial fears will only make matters worse over time.
Step 2: Take stock of your finances
Don't let the financial phobia control you any longer. Grab a pen and paper, or open up a spreadsheet, and start writing down your account balances and debts. Once you have everything laid out in front of you, you can begin assessing where you stand and planning for the future. Remember, if you're struggling with debt, it's okay. It's just proof that you have work to do.
Step 3: Check your account balance once a week
Checking your account balances at least once a week can be an empowering practice that translates to many financial benefits. It allows you to monitor your money inflow and outflow, giving you a clear view of your overall financial health. Knowing your account balances also helps you make informed decisions on your spending habits, helping you avoid overdraft charges and late payment fees.
Step 4: Tackle bills as soon as you receive them
Being proactive about your bills can be the best way to overcome financial phobia and protect your financial wellbeing. As soon as you receive a bill, make a commitment to open it immediately and review the details. Whether it's a utility bill or a credit card payment, it's important to know exactly what you owe and when it's due. Once you have a clear understanding, don't delay - pay your bill as soon as possible! Then you can avoid the niggling fear of it hanging over your head.
Step 5: Create a budget
By taking control of your finances and setting up a budget that works for you, you can feel empowered and confident in your financial decisions. A budget can help you track your income and expenses, identify areas where you can cut back, and ultimately achieve your financial goals. We advocate for the 50/30/20 rule, which will enable you to reach your financial goals with confidence and ease.
Step 6: Pay off debt
There is no need to let debt run your life. Empower yourself and push financial phobia to the side by taking action to pay off your debt, no matter how small that first step may seem. Not only will you be freeing yourself from the burden of debt, but you'll also be taking control of your finances and paving the way for long-term financial success.
Step 7: Set financial goals
One way to overcome financial phobia is by setting specific financial goals. By creating tangible goals, you can take control of your finances and feel a sense of accomplishment when you reach them. Whether it's paying off your debt or saving up for a vacation, having an achievable target can bring a sense of relief and motivate you to stick to a plan.
Step 8: Make talking about money a habit
Don't let financial phobia hold you back. Talk to your partner or friends about money and listen to what works for others. You don't have to go into details if you aren't comfortable, but the more you engage in these conversations, the more your fear will begin to fade. And if you feel paralyzed by money, seek professional help. A money coach or counsellor can assist you with debt problems while a fee-only financial planner can help set long-term goals for your accumulated assets.