Is money stressing you out? Here are six tips from a financial therapist

When we think about personal finances, most of us picture accountants or financial planners as the experts who can help us get our budgets in order.

But, for many people, managing money is just as much an emotional issue as it is a practical one, explains financial therapist Jane Monica-Jones.

“Whether it’s the stress of making ends meet, the guilt of overspending, or the anxiety of looking at bank statements, money often stirs up emotions that can be hard to handle,” Monica-Jones says.

“High emotional states – whether from stress or excitement – can overwhelm the nervous system, clouding judgement and leading to poor financial decisions.”

How your emotions influence your relationship with money

“An Illion report on consumer spending during early Covid showed a massive increase in superannuation draw down, along with spending on online shopping, alcohol and gambling,” Monica-Jones says.

“This shows that under severe stress, we often make poor financial decisions.”

And there’s been plenty to cause Australians worry in the last few years.

As well as the pandemic, Monica-Jones points out Australians have faced bushfires, floods, droughts and the cost-of-living crisis.

While these can all contribute to rising mental health issues, which can in turn impact financial decision-making, Monica-Jones says sometimes it’s necessary to go back even further into a person’s childhood to understand their psychology around money.

“For people who have faced significant disruption growing up – experiencing trauma, or having an unstable family structure – they may not feel they have the tools to handle life’s demands,” Monica-Jones says.

“Money acts as a trigger for these feeling of overwhelm, so financial stress is not just about money – it reflects deeper emotional and psychological challenges.”

How can a financial therapist help?

Different to a financial advisor, who can guide you on what to do with your money, Monica-Jones explains a financial therapist blends financial expertise with emotional insight to help people understand the “why” behind their spending habits.

“I work with people who face ongoing financial challenges – like struggling to stick to a budget, overspending or feeling overwhelmed about creating a will,” Monica-Jones says.

“These are chronic issues that run deeper than just practical money management.

“I help people who feel unempowered or lack confidence in managing their finances and try to address the emotional and psychological patterns behind these persistent problems.”

By uncovering her clients’ deep-seated feelings about money, Monica-Jones then works with them to create healthier financial routines.

Simple ways to manage your emotions around money

#1. Recognise emotional triggers in spending

One of the first steps to reducing financial stress is recognising when emotions are driving your spending.

Monica-Jones suggests reflecting on previous purchases and the emotions behind them.

“Consider (whether they) were made out of stress, boredom or celebration?” she says.

To help avoid making purchases you’ll later regret, she recommends taking a moment to pause.

“Try waiting 24 hours to see if the urge passes,” she says. “This can help prevent impulsive buys driven by fleeting emotions.”

#2. Create a “Wants v Needs” list

Categorising purchases into “wants” and “needs” helps clarify priorities and maintain control over spending habits, Monica-Jones says.

“By writing down essential items versus non-essential desires, you can better assess which items truly add value to your life, making it easier to avoid unnecessary expenditures,” she says.

#3. Set limits on gifting

While it’s nice to shell out on the people we love from time to time, Monica-Jones says gift-giving can be emotionally charged, often leading to overspending out of love or obligation.

She recommends setting boundaries to help curb your enthusiasm around gifting.  “Establish a budget for gifts ahead of time and communicate these limits to loved ones.

“This ensure that you can celebrate special occasions without guilt.”

Monica-Jones points out gifting doesn’t always need to involve a purchase.

“Handmade gifts or thoughtful gestures can be just as meaningful without breaking the bank,” she says.

#4. Mindful budgeting

Mindfulness isn’t just for meditation – it can also be a powerful tool for managing money.

“Applying mindfulness to financial decisions means being present and aware of how spending aligns with your values and goals,” Monica-Jones says.

“This approach can help curb impulsive buying and encourage more thoughtful purchases.”

She recommends tools such as budgeting apps or spending journals to aid in tracking expenses and fostering a greater awareness of financial habits.

#5. Build an emergency fund

Having a financial cushion can provide peace of mind and lessen anxiety about unexpected expenses, Monica-Jones says.

This article first appeared in bodyandsoul.com.au