In the UK, there are approximately 9 million adults who feel blind to their spending habits1. Whether it’s overlooking how much they spend or not knowing exactly what they spend money on, this can lead to financial anxiety.
Life comes with its ups and downs, and at some point we may go through a period or an event that causes us to be concerned about our finances. It could be worrying about something significant like your income after a redundancy, or something seemingly more trivial, like losing count of the number of online orders you’ve made this month.
If you’re worried about money, read on as we define financial anxiety and provide some tips on how to relax and stay calm during financial stress.
Financial anxiety describes feelings of worry, concern, and sometimes stress in relation to your finances.
The underlying causes of financial anxiety are vast and varied, meaning that there’s no one true reason why some people feel it while others don’t. However, our recent data has shown that certain generations may feel anxious about their finances more than others.
According to our latest Aldermore Savings Tracker1, one in five adults avoid checking their bank balance due to financial anxiety. Of those adults, 43% were Gen Z and 35% Millennials.
Interestingly, there was a much lower number of older generations indicating this thought process, with only 14% of Gen X and just 5% of Baby Boomers claiming to do the same avoidant behaviour.
To get a clear picture of why people feel so nervous about their finances, we queried a few potential causes.
Our data shows a worrying number of knowledge gaps when it comes to money. Most prominently, the types of expenses that were disregarded for UK adults. Some of the most commonly overlooked outgoings included:
Having not accounted for a lot of these sometimes, costly expenses, many respondents admitted to dipping into their overdrafts to cover costs. One in three (36%) of adults said they had gone into their overdraft this past year. Of those, 13% said they do so occasionally, while one in ten respondents said they needed to use their overdraft constantly.
Your savings portfolio is like a financial safety barrier for when costs go up, or perhaps even fall off your radar. However, for some, savings accounts are often used to fend off monthly costs, rather than for more enjoyable reasons.
62% of Brits claimed to dip into their savings in the last year, with a third (29%) doing so in the last month.
While it can be easy to get anxious about money, there are some things to try that might help alleviate the intensity of it.
Getting to the bottom of your financial concerns is ultimately the first step in dealing with them.
Sometimes, to get a true diagnosis for these causes, you’ll need professional help. In which case, you can always reach out to mental health charities such as Mind, or speak to your GP.
Don’t suffer in silence. Regardless of how it arises, anxiety can make you feel isolated from the rest of the world, but remember, you’re not alone. Although it may seem impossible, speaking to your friends and family about your feelings can help you think them through and make them a bit less scary.
Budgeting is the cornerstone of any successful financial strategy, and everything ultimately begins here. Not only this, but budgeting allows you to keep track of your otherwise unexpected outgoings, helping you to plan ahead.
List out all your expected essential outgoings, including your rental payments, car costs, energy bills, food expenses, etc. and tally them up. Then, start allocating your monthly income to cover each necessary expense. After this, you’ll be left with a final figure that you can choose to either spend or save.
Thinking in this way can help provide some financial perspective, giving you a clear picture of where your money is going.
Having extra savings on hand is always useful in fighting back against financial stress. Extra funds stored in personal savings accounts can be a helpful buffer against fluctuating costs and can be used to restore balance to your financial plans to alleviate anxiety.
For more help on developing a healthy relationship with saving, see our article: How to Develop a Saving Habit : Good Financial Habits to Develop
Ultimately, the number one method in dealing with financial stress is to seek out help from qualified mental health experts. Nobody should be made to feel worried about their financial future, which is why places like the Money Charity exist.
Aldermore has partnered with the Money Charity for many years, helping them provide financial education, advice, and guidance across the UK.
Whether it’s dealing with money worries or if you need additional help with communication, our team is on hand to listen and adapt to your needs. Speak to our tailored support team today for more information on the bespoke services we offer to customers in need.
1 Research conducted on behalf of Aldermore bank by Opinium Research between 15th - 21st January 2025 among a nationally representative sample size of 3,000 UK adults.
This article is provided for informational purposes only and should not be considered medical advice. If you or a loved one is suffering from mental health conditions, please speak to a qualified professional.