Money issues making you lose sleep? You're hardly alone. The American Psychological Association's annual "Stress in America" survey consistently cites money as the biggest source of stress by about two-thirds of respondents.
In the aftermath of the 2008 financial crisis and resulting Great Recession, therapists have begun to explore what's colloquially known as "money anxiety disorder," or MAD. Here are some of the symptoms that might indicate you're suffering from MAD, which—it's important to note—is not an official psychological designation, and does not appear in the Diagnostic and Statistical Manual published by the American Psychiatric Association:
This one is pretty obvious, and falls squarely in a category author Brad Klontz calls "Money-Worshipping Disorders." Over-spenders often find themselves stuck in a vicious cycle. They're nervous about money. The freedom of going on a shopping spree offers temporary relief from the anxiety. But of course, in the end, shopping only makes the anxiety worse.
This can work both ways. You might think of hoarders as over-spenders who can't stop accumulating more and more stuff. Some end up paying for storage units just to accommodate the stuff. On the other hand, some hoarders don't hoard stuff, but rather money, leading to the next issue...
Frugal to a fault
Some people are so anxious about future living expenses that they don't even spend the bare minimum on themselves. This "Depression-era mentality" might sound thrifty and even admirable, but it often has a dark side. Not only do under-spenders miss out on life's joys, like vacations or comfortable homes, but money hoarders might not even spend the necessary amount on home repairs or health care.
Overworking fits into the money-hoarding category, too. People who don't know when to take breaks, and feel the need to earn every penny they can, are often living an unhealthy lifestyle. Underspending can be a big problem for couples, particularly when only one partner feels compelled to hoard cash.
An extreme form of financial family conflict is sometimes called "financial incest," in which one or several family members control the others by taking full control of the purse strings and abusing that control. It's easy to see how this plays out in marriages where only one partner controls the budget and bill paying. Financial incest can also involve "teams" of family members using money issues, such as inheritances, to control other groups.
Another family financial power play involves simply lying about what's going on with money. One or both partners can hide income or expenses from each other; in extreme cases, one might even take out a loan and not disclose it, or put the family at risk through fraud.
On the other side of the spectrum, family members can spend too much on each other. Parents can pay adult children's expenses long after doing so is healthy for either party, as an example. Doing so can put the parents' retirement at risk, but it can also stunt a child's move into adulthood and enable bad behavior.
Anxiety as the cause of money troubles
While money troubles can cause anxiety, it turns out anxiety can cause money troubles, too. A Cornell University study released this year and published in Health Economics found people with anxiety and depression are nearly 25% less likely to have a retirement savings account; stressed married couples have 20%-to-28% less saved for the future vs. those with a healthier view of money.
"If your anxiety makes you think you're not going to live long, or makes you discount the future, you might not want to save," says study lead author lead author Vicki Bogan, "You might think, ‘Why should I save for that? I might not be around.'" (See also: Americans' Financial Outlook Survey Results)
Dollars and stress
On one level, our collective anxiety about money is hardly a surprise. Money equals food, shelter, and future in our culture. In Abraham Maslow's famous hierarchy of needs, money basically represents the first, widest layer of the pyramid. So it's normal that fear of not having enough money, for now or later, is a major source of stress.
And in today's America, the fear is perfectly rational:
- 43% of Americans say they're struggling to pay bills, according to the National Financial Well-Being Survey conducted by the Consumer Finance Protection Bureau.
- 57% of Americans told Bankrate they don't have enough cash on hand to absorb a $500 surprise expense without going into debt.
In sum, about half of Americans are living on the edge—walking a financial tightrope with little or no margin for error. (See also: Why You Need an Emergency Fund)
Meanwhile, a 2017 book called The Financial Diaries highlighted a more subtle but perhaps more stressful element of family budgeting: volatility.
For many Americans, there is no such thing as typical month. Incomes either spike or dip by 25% in five of 12 months each year. Spending is subject to these wide swings, too. That contributes to Americans' feeling of precarious uncertainty—some economists have begun to call this "precarity."
It's hard to ignore the enormous increases in healthcare premiums that have darkened consumers' moods recently, and raised even more uncertainty about future healthcare costs, says Kansas-based financial planner Desmond Henry. He says his family's own premiums just jumped 27%.
"I actually just took a client survey last week asking what their primary concerns were and retirement healthcare costs still ranks No. 1," he said.
How to get a handle on your money worries
While the drama and uncertainty over the fate of Obamacare is a major concern, what politicians do or say has far less impact on most people's financial situation than how much money they spent last month.
Henry suggests his clients focus far more on things they can control, and things that have impact, including "saving more of your paycheck, contributing more to your 401(k), spending less, paying off debt, investing in low-cost investments, establishing an emergency fund, writing a final will to protect your loved ones.
"All of these financial to-dos not only have a much greater impact on your overall financial health but also can actually decrease your financial anxiety," he said.
While making these kinds of financial changes can seem overwhelming, they don't have to be, Henry says—as long as you focus on taking "baby steps."
"Sometimes focusing on lofty money goals like building a retirement nest-egg and paying down hefty student loan debt can feel so impossible to achieve that it actually paralyzes us and we end up doing nothing," he said. "Instead, create baby steps and focus on accomplishing small money wins like upping your 401(k) contributions by 1% a year or not eating out for an entire week. These baby steps can really create positive momentum towards conquering your longer-term money goals and even [create] good money habits."
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This article was originally published on November 14, 2017, and has been updated.