How to Deal With Financial Stress and Sleep at Night

When you lay your head on the pillow at night, are you flooded with money worries instead of drifting off into sweet dreams? Join the club.

According to the American Psychological Association (APA), money continues to be the top cause of stress among Americans. In its 2015 survey, Stress in America: Paying With Our Health, the APA found that 72 percent of Americans reported feeling stressed about money at least some of the time during the prior month.

For most people — 64 percent — money is a somewhat or very significant source of stress. This is especially true for parents, 77 percent of whom professed considerable anxiety about finances.

Nothing beats having a big balance in your savings account and an ample 401(k) if you’re over 50. But, in reality, millions of boomers are coming up short. Moreover, as a result of pervasive job layoffs, many in their 50s and 60s saw their earnings drop just when they thought they’d be reaching their peak salaries. The result: a high level of stress.

“People are very anxious about whether they will be able to pay for basic health care and the rising cost of prescription drugs,” observes Atlanta psychologist Mary Gresham, who specializes in finances. “Children are no longer launched after college, so a lot of boomers have to make the difficult decision whether to help their adult children at the expense of compromising their own finances. And most of us don’t have training in making those value-based decisions.”

But understanding the factors that fuel your financial anxiety and taking some simple steps can help alleviate it.

For example, many of us feel shame around money and finances, which fuels stress, says Brad Klontz, executive director of financial psychology & behavioral finance at Occidental Asset Management and author of five books on money. “I call that shame an ‘emotional glue trap.’ It keeps you stuck,” he says. “I see it among boomers all the time, a feeling of shame that they should have known better or done better in the area of money.“

Along with the shame, says Klontz, comes “money avoidance” and an unwillingness to deal with financial matters.

The antidote: Let go of the shame and deal with the avoidance.

Often, money anxiety is intensified simply by a lack of solid information. Not knowing exactly what you’re dealing with can trigger those nighttime panics. “It’s shocking how many people have no clue how much their 401(k) can yield for how long,” says Klontz.

As simplistic as it may sound, experts say your stress will diminish once you estimate how much money you have for retirement and how much you’ll need. You may be pleasantly surprised and find out you’re in better shape than you think. If you need help with this task, consult a financial adviser.

Don’t let yourself get tied up in knots about your ability to retire at 65. That retirement age is, in many ways, antiquated anyway — a number first used when life spans were 25 years shorter than they are today.

Rather than feeling panicked over retiring at 65, Gresham advises her clients to rethink the concept of retirement. “It’s outdated and doesn’t fit today’s reality,” she says. “It’s not realistic for most people to think that you can work for 30 years and then fund a 30-year retirement.”

She suggests considering part-time retirement — what author and Next Avenue blogger Chris Farrell calls unretirement and career coach and Next Avenue blogger Nancy Collamer calls semi-retirement. This means working two or three days a week at something new or starting a business.

Psychologist and writer Stuart Vyse, author of Going Broke, Why Americans Can’t Hold On to Their Money, recommends a practical approach to dealing with money stress: Get rid of the sources of stress, like credit cards that mount up huge debt. Easier said than done, perhaps, but even shifting to a more modest lifestyle will lower your stress levels.

“There’s nothing more calming,” says Vyse, who even proposes boomers get over the quintessentially American idea of home ownership and rid themselves of monthly mortgages. “Being debt-free helps you sleep at night.”

Sometimes, stress over money isn’t about money at all. Aging, health, relationships and a fear of not being valued anymore are powerful feelings that may hide behind a smokescreen of financial anxiety.

“Money is a convenient place to park anxiety,” notes Gresham, who says even people with huge financial resources worry about money. “Anxiety about money is a state of mind. If you live next door to someone who is quite a bit wealthier than you, you’re likely going to be less happy.”

Simple techniques like meditation and “living in the present” can alleviate stress, too. So can finding support from your loved ones.

In fact, the APA’s report found that Americans who said they have someone they can ask for emotional support, such as family and friends, report lower stress levels than those without emotional support.

So, the next time you’re worried about money, call a good friend and vent. It won’t add dollars to your 401(k), but it may provide a sense of emotional connection that can be extremely fulfilling.