Constant dollars

2 Steps I Take To Cope With My Money Anxiety After Debt


  • After paying off $ 100,000 in debt, I expected my anxiety about money to go away. This is not the case.
  • Instead of worrying about the debt, I was worried about not saving or investing enough.
  • But checking my investments less often and tracking my spending helps allay my worries.
  • Read more stories from Personal Finance Insider.

Last year, I got rid of my debt at the age of 44 for the first time in my adult life. It was an important step, especially since I had tried to reduce a $ 100,000 debt incurred by a combination of law student loans, low paying jobs, high rents, living on top of it. of my means and financial mismanagement.

As I worked towards my debt-free goal, I assumed that all those panicked moments I had experienced, such as my checking account going overdraft, or having to borrow money from my boyfriend on a trip during Hurricane Sandy because I didn’t have enough to cover an unforeseen longer stay, would go away with my debt. Money was a constant source of anxiety for me, and I was sure it had to do with my net worth being negative.

Even though I’m not in debt I’m still anxious – my worries have just changed

But one funny thing happened over the course of the year and the more debt I got: I was just as concerned about money as I was before. The reasons why I am anxious may be different, but the feeling remains the same. Before, I insisted on the huge sums I paid for interest, on whether, if I died, my partner should assume my debts, and how I would, at some point, have raised such a child. of my money was already spent. for.

Debt-free, the things that worry me include how to save for retirement (and if I can even afford to retire), if I ever save enough to feel like I can give to my unborn child, who will probably cost tens of thousands of dollars in adoption fees before I even start raising them, the lifestyle I envision for them, how and where to invest, and whether I will be able to maintain my lifestyle as a freelance writer with a precarious income.

I got so used to debt being a part of my life, it was as constant as getting up every morning, taking vitamins and having breakfast. I didn’t like it, and was often ashamed of it, because the debt was on my own, but it was a familiar burden. Earning more than I spent was unfamiliar to me, and the trite but true saying “more money, more problems” began to torment me. I had assumed that I would continue to be as diligent in my spending as before, but not having to pay hundreds of dollars the first of every month for my debt meant that I now had to figure out what to do with that money.

I wanted to be more thoughtful about my spending, not just buying things on a whim because I could technically afford it. But being “careful” with money isn’t as easy as it sounds, especially considering the time involved. I discovered that I could easily buy essentials, but spent hours looking for the perfect deal on a sweater, forgetting that if time is money, those extra two hours of comparing prices and Search for discount codes should really be added to the pull. Cost.

The same can happen with my investment decisions. When my bank account goes over a few thousand dollars, I immediately start researching how to invest that money. No matter what I decide, these investments can also become a source of anxiety when the market goes down. I often find myself guessing how I invested my money and worrying that I “wasted” it if my investments don’t pick up after a few weeks. It can feel like an endless worry cycle, a cycle where I have little control over the outcome.

How I deal with my new worries

1. I check my investments less often

I decided to check my investments once a day, unless something very unusual happened, and for the most part I adopted a “set it-and-forget-it” mindset. When there are huge market declines I have confidence that my selections will bounce back, or when it seems unlikely for an extended period, I sell. I will never have the mental or emotional courage to act like a day trader, and knowing that it eased my nervousness about the market.

One of the reasons I got into debt is that I can easily justify spending that seems necessary to add to my zest for life, regardless of the long-term financial impact of those consumer choices. I used to travel all over the world as long as I technically had money in the bank, not thinking about why I would need that money in my forties, fifties, or sixties.

2. I keep a close eye on my expenses and save for big expenses

In my debt-free life, I found myself waking up at three, four, or five in the morning, logging into my accounts and, if they didn’t seem “good” enough, frantically trying to think about how from which I could earn more money. Even though making money isn’t a bad goal, the way I go about it wasn’t healthy. So, to help counter my financial anxiety, I started to put every penny I spent and every penny I wanted to spend the following year into my budget, which also contained my expected income. Since I don’t always know my income in advance, I lowered my estimates. I didn’t allow myself to buy anything over $ 25 until I had carefully considered it in my budget for at least a day and made sure I felt at home. comfortable with spending.

It helped me see that a major purchase in January could impact my results in December. I saved up for big purchases until I had more than enough to cover them, with some extra to spare in case an independent check was late or a gig failed.

This year, while I have been generous with myself, my friends and my charitable donations, I have also more than doubled my net worth. Part of this is due to my pandemic lifestyle at home, but it was mostly about trying to consolidate not only my retirement savings but also my peace of mind. I don’t want to wake up wondering how I’m going to pay my bills or if I can afford to give my little cousins ​​gifts for the holidays. My financial anxiety has eased because I trust myself to make smarter decisions about money, regardless of my income.