Managing Financial Fear and Anxiety
During this season of political, economic, and social uncertainty, it’s not surprising that many people are wrestling with fears about the future.
In its most recent annual study on financial resolutions released at the end of 2024, Fidelity found that more than half of Americans feel overwhelmed by their personal finances, and nearly 30% describe their relationship with money as ‘stressful.’
Interestingly, financial worries affect people from all walks of life, regardless of financial position and net worth. A reported 89% of Americans do not consider themselves wealthy, despite the income and assets they’ve accumulated, and four-in-10 say that they worry they could suddenly lose their wealth.
Getting to the Root of Financial Anxiety
For many people, including Christians, money isn’t just about bank balances and net worth; it can be laden with emotional and spiritual context.
For some, there will never be enough money to manage their fears. Perhaps they had a difficult childhood or learned certain attitudes about money, such as those who were raised by parents who made it through the Great Depression. Others have now arrived at a place of relative prosperity after years of barely making ends meet. Or maybe they’ve worked hard throughout life to afford a “better” lifestyle for their family than they experienced growing up.
Living in fear of a downturn or losing everything can take away your peace of mind. The Bible cautions about the connection between anxiety and placing too much value on material treasures. Matthew 6:19-21 says, “Do not lay up for yourselves treasures on earth, where moth and rust destroy and where thieves break in and steal, but lay up for yourselves treasures in heaven, where neither moth nor rust destroys and where thieves do not break in and steal. For where your treasure is, there your heart will be also.”
One way to address financial anxiety is to accept that it’s a normal response to external circumstances. We can look at it objectively as part of the human experience and understand the underlying behaviors and attitudes that can drive emotions about money.
Our research has found that all investors experience discomfort and fear about 65% of the time, regardless of their chosen investment strategy. We call these “behavioral seasons.”
- Fear of Loss (FOL) can occur when portfolios experience downside volatility. Behavioral economists have found that for most people, the pain of losing even a small amount of money outweighs the joy felt by gaining the same amount. FOL is one explanation of why so many investors flee to cash and other relatively safe investments during market downturns.
- Investors experience a Fear of Missing Out (FOMO) when their diversified portfolios underperform broad market indices or they believe their portfolios are underperforming their peers’ portfolios.
- Both FOL and FOMO cause investors to experience the Fear of Failure (FOF) as they consider whether their investments and financial holdings will be able to support their future hopes and goals.
Realistically, investors should anticipate that they will feel uncomfortable at times. Yet, because we all naturally seek contentment, sometimes our expectations fall short of reality.
Antidotes for Financial Anxiety
In addition to practicing acceptance when it comes to financial anxiety, another powerful antidote is generosity. Our firm’s founder, Ron Blue, sums it up: “If I could boil down everything I have learned into one sentence or thought, it would be this: Generosity and financial freedom are inextricably linked. If you want to replace fear, guilt, and frustration with freedom, confidence, and joy, you have to hold your treasures ― your money, your possessions, your time and talents ― with an open hand.”
As many of us wrestle with ongoing fears about money, remember these points:
Trust scripture for reassurance about God’s provision. Blue Trust’s foundational scripture found in 1 Timothy 6:17-19 provides wisdom in times of uncertainty. “Instruct those who are rich in this present world not to be conceited or to set their hope on the uncertainty of riches, but on God, who richly supplies us with all things to enjoy. Instruct them to do good, to be rich in good works, to be generous and ready to share, storing up for themselves the treasure of a good foundation for the future, so that they may take hold of that which is truly life.”
In this verse, we see that practicing stewardship is showing faithfulness and obedience to God. We are to live our earthly lives with the future hope of eternity. Despite our daily worries, the Bible tells us that God knows our needs better than we do. If He cares for the birds and lilies, He will provide for us. “Look at the birds of the air: they neither sow nor reap nor gather into barns, and yet your heavenly Father feeds them. Are you not of more value than they?” Matthew 6:26
Answer the question, “How much is enough?” Money itself is simply an object to be accumulated; its meaning lies in helping us meet our immediate needs, reach our goals, and help others. If you consistently consider the question, “How much is enough?” before making financial choices, you may find that you’ve saved more than adequately for your needs. Such peace of mind can give you greater satisfaction with your decisions and a greater sense of control over your financial future.
Hold money with an open hand. It’s important to remember that God owns it all. People at all income levels suffer financial fears, but a powerful remedy is generosity. Over and over again, we have seen the impact of generosity on the lives of our clients. We have found that, rather than clinging to the comfort of money, you can find great joy in giving it away to help others.
Click here to hear some impactful generosity stories from our clients.
Follow a financial plan consistently. You can work with your Blue Trust advisor to discuss your behavioral biases and underlying beliefs about money and investing. In our experience, it’s wise to 1) establish a financial plan, 2) understand that seasons of doubt will challenge your resolve to stick to that plan, and 3) set expectations accordingly. Prioritizing investment goals and understanding the associated trade-offs helps investors weather all behavioral seasons and stay the course.
Blue Trust advisors are equipped with the expertise to help you address your emotions and anxieties about money. If you’d like to learn more about our services, please contact a Blue Trust advisor by calling 800.987.2987 or emailing blog@bluetrust.com.
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