Lifestyle

Money Anxiety Ladder

Anxiety about money should be pretty low at the point where we are on our journey, however I continue to encounter it in different circumstances. The amazing Kara owner of Bravely Go and co-host of the wonderful Fairer Cents podcast has a great description of financial anxiety in her article entitled : I’m a Finance Professional and I have Hella Financial Anxiety.

For myself, getting closer and closer to our FI goal, and paying down our mortgage greatly reduced some of the money anxiety, but I still had to face it in the past and sometimes need to deal with it for future decisions.

That’s probably why, whenever I encounter some tools to manage anxiety, I start thinking about how I can apply them to money anxiety. One specific idea, that is often used for dealing with situations or circumstances that make you anxious or cause fear, is to practice gradual exposure to such situations. 

A Ladder for Gradual Exposure To Situations that Make you Anxious 

One helpful tool to plan gradual exposure to situations that cause anxiety, is to build a “Fear Ladder” which basically is a hierarchy that ranges from those situations in which the person is comfortable to the situation that would be the most anxiety or fear-inducing.

You then break down the ladder for different factors such as – activities, locations, and people – into various steps of increasing levels of anxiety or discomfort, in order to plan gradual practice focused on exposure to those situations. It is a very gradual process, where you only increase the difficulty for one factor, once the person is really comfortable in the current step. 

Moving slowly through the process is quite important, since the behavior of avoiding those situations or activities is really self-reinforcing as it does help avoid feeling that anxiety. You then end up not getting any exposure or experience with what causes you to be anxious and sometimes this can prevent you from achieving some of your goals related to money.

money anxiety ladder modest millionaires 1

Applying the Ladder to Money Anxiety

I reflected on how this tool could be applied to money anxiety as it is such an asset to learn how to manage that money stress, not only for your well-being but also for your wallet. Indeed, an important habit of self-made millionaires is that they know how to manage stress.

On the investment front, it could range from automating savings to using a self-directed online brokerage service such as Questrade. From a budgeting point of view, the ladder can increase from just tracking your spending to challenging yourself in specific categories to lower your spending. 

I believe that avoiding taking a decision on investing can be self-reinforcing as you avoid the anxiety that you feel from having to make that decision and of questioning if it was the right decision. On the spending front, you may avoid some of the anxiety by no longer tracking your spending and no longer seeing where you are spending more than you would like, or you might feel better since you perhaps indulged and just bought yourself something new and shiny (or, as it often is in my case, delicious) that brings on happy feelings. 

Don’t get me wrong, I have nothing against buying things that makes me happy, but sometimes I know that certain things I spend my money on that make me happy right now, are not things that make me even more happy and satisfied in the long run.  


money anxiety ladder 1

Anxiety as a Spending Trigger

I dived even deeper into the idea when I read Work Optional a few months ago. One of the exercises in the book, leads you to think about your spending triggers. As I was working through this, I realized that often times it was anxiety that triggered spending that did not align with my mission statement

This anxiety comes in many forms : fear of missing out on a deal, worry of needing more food or gifts for some holiday, anxiety while in social situations, coping during stressful times. All of these emotional triggers could be relieved, in the short-term, by various spending habits that caused me to spend above my long-term goals : amazon add-on items, stocking up on items we already had at home, overbuying food or gifts for holidays, impulse take out during stressful times or mindless food and drink spending when out in social situations. 

Planning your Next Step up the Money Anxiety Ladder

To help make the steps a gradual increase from one another, it’s important to reflect on the things that I might need to do to help myself feel more prepared to move up the ladder. 

For investing, this will likely be educational steps such as : learn about TFSA or RRSP, find out if your bank offers a TFSA or RRSP savings account or self-directed investment funds. Perhaps these steps can also be to talk to people that may have already used those investment vehicles, or research appropriate facebook groups such as Choose FI Canada for people’s related experience or questions.

For spending, it could be to connect better with what you feel in certain circumstances and identify cues that trigger your money anxiety and then make a plan of action for when you encounter these. 

Money Anxiety Ladder Examples

Here’s an example of how I feel I’ve dealt in the past with my money anxiety linked to investing and how those steps would be applied in a Money Anxiety Ladder:

The Timid Investor

Money Anxiety Ladder Investing in Canada

Does this mean someone should follow all these steps? Definitely not, but it is what I did to feel increasingly more comfortable with investing. Someone could go through each of those steps only with the knowledge aspect, without actually opening any account until they feel comfortable enough and opt for opening an account with an online brokerage such as Questrade right off the start.

This is what I ended up doing in the end, although I do keep my emergency fund in both a TFSA savings account and regular savings account, while also still having some money in an RSP savings account as well as some tax-sheltered investment funds offered through my bank. 

One major help with my investment anxiety is that Mr. Mod researched and tested out most of the options prior to myself trying them out. He was therefore a great resource to help answer some of the questions that would come up and trigger my anxiety before moving on to the next step that felt more complex to me. This helped me gain exposure and allow me to move up my investment anxiety ladder.

I highly recommend finding someone you trust that has taken those steps before you to discuss the options and questions you have to help ease your anxiety.

Here’s another example, this time on one of my major spending triggers : 

Holiday Spender

Money Anxiety Ladder Spending for holidays

As you can tell, I have a way of overspending when it comes to holidays. I go a bit intense with the gifts as well as food-wise, therefore we end up with way too much food and silly toys that don’t actually contribute much value to those moments.

This is in part anxiety linked to worrying my kids are missing out on some experience or of deceiving them, some social anxiety and some fear of missing out on food when we have a bunch of people over. 

I really want holidays and birthdays to be more about the time we spend together instead of the money we spend therefore I’ve been working on planning more conscious spending when it comes to holidays & birthdays. 

I’ve actually been implementing some of the learning tools listed here, specifically tracking of all I purchase for certain holidays. It’s been very helpful to recognize how much I’ve already purchased for an event. It also helps make me feel more prepared and stop thinking about it every time I step foot in a store where the holiday marketing is strong!

Steps to build you own Money Anxiety Ladder:

  1. Estimate you current stage of comfort dealing with money by keeping a regular log of your money anxiety in different situations.
  2. Identify a particular situation in which you feel money anxiety.
  3. Think of 2 or 3 factors that can affect this money anxiety, such as : activities, locations and people- or think of what influences your Money Anxiety like, for example, when you get paid or where you are in the fiscal year. 
  4. You’ll want to break down each of those factors in small steps that incrementally increase the difficulty thus creating a ladder for each factor. Begin with a scenario in which you start feeling minor money anxiety, then identify other variations of the same factor that become increasingly challenging for you.
  5. Combine each factor ladder into an integrated money anxiety ladder.
  6. In the last column, add your learning tools which are things you can do to help prepare you for the next step in your money anxiety ladder.
  7. Start practicing and track you progress, and make adjustments as needed.
Money Anxiety Ladder Template to deal with financial stress

In the end, doing the exercise of building your Money Anxiety Ladder can help you gain confidence in situations that trigger money anxiety as you have done an effort to identify and recognize all the factors that play a different part in triggering it, while also reflecting on tools that can help prepare you for the next step.  Just becoming aware of it is sometimes enough to let it pass and move on without spending extra.

Obviously I am no psychologist or financial advisor, I’m only reflecting on how I believe this process could be applied for my own money anxiety,  and this does not consist in any way in professional financial or health related advice. Consult the right professionals where needed.

How have you been dealing with your own money anxiety? What types of situations or decisions might be money anxiety triggers for you?


ladder to a money anxiety free world

6 thoughts on “Money Anxiety Ladder

  1. This is SUCH a cool idea!! I actually haven’t identified money anxiety in myself (yet?), but I definitely have a whole host of other anxieties that this same approach could definitely help. Thank you!

    1. Thank you! I’m happy you like it 🙂 and hope it can help with some anxieties in your life. Just knowing I’ve got some form of system to try and work through my anxiety has been helpful as I know I can sit down and organize some steps/tools to see if I can use this ladder to reduce my anxiety in certain situations.

    1. I’m glad you like them 🤗. It’s been really helpful for me, so I’m happy to share if they can help anyone else! Also, thanks so much for sharing on your Women’s Personal Finance Wednesdays roundup 💕!!

    1. Thank you Daniella! I hope it can be a helpful tool for it and really looking forward to continue exploring this subject further.

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