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Money Mindset - Overcoming Financial Anxiety

Money Mindset - Overcoming Financial Anxiety

January 26, 2021

With a new year comes new goals. This month, we've decided to focus on Money Mindset, and there's no time like the present to address one of the biggest obstacles surrounding managing that mindset: anxiety. 

 To help us along the way, I spoke with San Diego clinical psychologist, Dr. William Taboas. Dr. Taboas hails from Puerto Rico by way of New York City, and moved to the San Diego area just over 3 years ago. A Fordham University graduate, Dr. Taboas has spent the better part of the last decade studying the reasons why our brains and bodies react and behave the way that they do.

"To me, it is fascinating how the body is pre-wired to detect patterns and anticipate events, but some people end up evaluating these as potential threats or catastrophes, while others just see them as challenges to overcome." he said.  "Part of the reason I study anxiety is to untangle these questions to help further refine clinical interventions. Another reason is that I find that research can have a massive public health impact by educating each and every individual not just about mental health, but also about how their brain, behavior, and emotions are interconnected in their day-to-day."

Anxiety is often used interchangeably with other feelings and emotions - fear, stress, apprehensiveness, and worry, to name a few. Dr. Taboas stressed the importance of clearly defining what anxiety is, first and foremost:

"Unlike fear, which is defined as a reaction to a proximal and tangible threat, and stress, which is feeling overwhelmed to the pressure of certain demands, anxiety’s definition is quite different: it is an emotion that signals preparedness to a potential or an uncertain threat. Anxiety exists in a spectrum: it is characterized by mild concern for some people or as excessive and uncontrollable worry accompanied with intrusive thinking for others. But there are reasons why we experience this emotion: humans developed anxiety to prepare for future obstacles or threats; we just happened to evolve a tendency to overprepare. So, while anxiety can be helpful in motivating us to take action and prepare for events, the sensations feels very uncomfortable. This discomfort is something many people avoid by ignoring the things that make them anxious."

The good news is that, contrary to societal norms, having some anxiety is actually a good thing. "Anxiety is necessary for getting things done, so we don’t aim to get rid of it!" He went on to say, however,  that too much of this feeling can turn into a lot more than just an irritation.  "This can create a vicious cycle: a problem is imminent and needs attention, you become anxious and the problem becomes worse, nothing gets done and there is immense distress. This is when people tend to get help from a professional."  He went on to say that all major psychological interventions for anxiety change the relationship a person has with the emotion. So, in psychotherapy, a person learns to confront, plan, and put things into action, instead of avoiding, procrastinating, and ignoring the problem, while also acknowledging the necessary discomfort that anxiety brings.  

Now that we’ve accurately defined anxiety, if we consider money as something that people interpret as leading to potential threats (debt, foreclosure) or uncertain threats (stock market), it makes sense that people would get anxious over money. For some people, the mention of money can induce stress (pressure) and/or anxiety (worry). One may have the pressure to pay bills, mortgage, tuition, debt, or may be thinking about future events, like savings, retirement, the stock market, or world events that may impact finances. I thought this sounded familiar - in the past, I have had some serious issues speaking about and handling things related to my finances. I was never taught how to have any sort of relationship with money, and when the time came for me to handle things on my own in the Big Wide World, I was hit with a pretty large reality check.  First, I had no idea how to approach my finances on my own and second, I was so scared to confront the situation that I did the bare minimum to get by. Luckily, I discovered that I'm not alone in my anxiety. For most people, it's an issue that just creates too much anxiety in the form of chronic worry and discomfort.

Dr. Taboas brought up another good point - the effects that this anxiety can have on other aspects of your life. "If you are worried about managing your anxiety, this in turn can lead to multiple avenues of distress, including loss of sleep, irregular eating, interpersonal problems (specially with spouses and family), chronic avoidance of obligations (leading to job loss), and in some cases, medical complications (if your money anxiety goes unattended and you cannot afford medical care, for example).". 

So, how can we make sure we don't get to that point, and start to develop a healthy mindset in regards to our finances? Dr. Taboas provided 3 steps to achieving that goal.

First step - know thyself. Know your relationship with your money, and how that relation is creating the anxiety that you're feeling. Are you super frugal and never spend anything, therefore never enjoy what your money can do? Are you spending TOO much and getting into debt, and now you're anxious about that debt? Are you nervous about having those conversations with your partner and it's now starting to effect your relationship? Is your anxiety taking its toll on other things? Being honest with your relationship with your finances is the easiest way to address some of the problems your anxiety is creating for you.

Second step - make an action plan. Budgeting is a huge step in the right direction. Getting outside help with your finances is also a great resource. Dr. Taboas emphasized that everyone's plan will be different. "If you are an over-planner, you would need to identify your own internal “good enough rule” to refrain from money taking over you life. If you are an avoider, you will need to confront, plan, and execute your financial plan consistently. Regardless of your type of anxious reaction, make sure you always have the a broader perspective of your plans and expectations, and while planning on both the short term and long term, to not get caught up in the short term." 

Last - and perhaps most important- step - don't be afraid to pivot, and learn to be flexible. Not all plans and foolproof,  "And that is perfectly ok - which is the hardest part about successfully managing anxiety: learning to accept the things you cannot change and confront the things you can.

Stoic philosophers developed an antidote for anxiety centuries ago - radical acceptance of life. Life will always have curve balls – accept life and its wonders, mysteries, blessings, and curve balls for what they are instead of trying to control everything. Try to be as rational as possible with your money, and responsible of course, but in the end, don’t let it consume you – enjoy life itself. After all, money is just a facilitator of happiness – not the thing that BRINGS the happiness.”


Dr. William Taboas is a licensed clinical psychologist providing psychotherapy services at Coronado Psych for anxiety and mood disorders. Dr. Taboas is also a postdoctoral research fellow at the Center for Understanding and Treating Anxiety at San Diego State University where he conducts translational research using physiological markers that underpin anxiety to further refine psychological treatments. Dr. Taboas has presented at national conferences, including the Association for Behavioral and Cognitive Therapies (ABCT), the Anxiety and Depression Association of America (ADAA), and the International Obsessive-Compulsive Disorder Foundation (IOCDF) and local organizations such as OCD SoCal.