This condition can hinder personal achievements and lead to overwhelming debt.

More than just fear, the mere idea of dealing with financial matters can leave a person feeling paralyzed, unable to manage their finances effectively.

Worrying about finances should be a normal part of daily life. However, for many people, opening a bank statement out of fear or organizing bills triggers discomfort, even physical symptoms such as heart palpitations, anxiety, and insomnia.

For those who feel out of control when it comes to personal finances, this could be a sign of “financial phobia,” explains financial education expert Simone Sgarbi.

What Is Financial Phobia?

First of all, a phobia is a type of anxiety disorder characterized by an irrational fear of a situation. “What the person feels is disproportionate to the circumstance itself,” says Sgarbi.

Financial phobia is an excessive fear related to issues like finances, bills, and debts.

The causes of financial phobia can vary from person to person. Some develop this fear due to past traumatic experiences involving financial problems, such as bankruptcies, job losses, or witnessing financial struggles within their families. Others may develop financial phobia due to a lack of understanding or education about financial matters, leading to feelings of inadequacy or an inability to handle money effectively.

Symptoms of financial phobia can include avoiding financial activities, such as refusing to check bank statements, pay bills, or create budgets. It can also lead to extreme behaviors, such as compulsive shopping or excessive financial conservatism, preventing individuals from investing or spending money even when necessary.

Beyond the fear of money itself, the mere thought of dealing with financial matters can leave a person feeling stuck, unable to organize their finances.

According to financial education expert Simone Sgarbi, some signs of financial phobia include:

• Excessive worry: Constant anxious thoughts about personal financial situations, such as obsessing over bill payments or worrying about future finances without immediate cause for concern. For instance, someone might spend hours stressing over how to pay a debt, even if their current financial situation is stable.
• Fixation on financial problems: Focusing solely on the negative aspects of one’s financial situation, even when viable solutions exist. For example, someone might always talk about their debts and financial struggles without considering strategies to resolve them.
• Irritability: Becoming easily annoyed when financial topics are mentioned or discussed. For instance, someone might get moody or irritable when conversations about saving or spending money arise.
• Difficulty sleeping: Stress from financial concerns can lead to trouble sleeping, insomnia, or interrupted rest. For example, a person might stay awake at night worrying about unpaid bills or failing to meet financial goals.
• Fear of losing control: An irrational fear of losing control over finances, leading to overly cautious behaviors or avoiding challenging financial situations altogether. For example, someone might refuse to invest money in growth opportunities out of fear of losing it all.
• Avoiding bank statements or credit card bills: Refusing to confront the reality of one’s financial situation. For example, someone might avoid checking their bank balance or credit card statements, knowing they’re accumulating debt.
• Being excessively frugal or reckless and feeling deeply uncomfortable when money is discussed: This happens when someone has a highly emotional relationship with money. For example, a person might refuse to spend on essential items or feel extremely uneasy discussing financial plans with others, avoiding such conversations entirely.

The Consequences of Financial Phobia

According to Sgarbi, financial phobia directly impacts daily life. It can prevent individuals from turning dreams into clear goals, as this process involves confronting their finances.

“Another consequence is financial disarray, where the person has no clarity about how much they have or where their earnings are going. This ends up turning their biggest fear into reality, making dealing with money seem terrifying,” the expert adds.

How to Overcome Financial Phobia

The financial educator explains that two highly effective tools for overcoming financial phobia are “exposure therapy” and “cognitive-behavioral therapy.”

Exposure therapy is a psychotherapeutic approach commonly used to treat various anxiety disorders, including financial phobia. The main idea is to help the patient gradually face their fears and concerns by systematically exposing them to situations or stimuli that trigger anxiety.

In this context, exposure therapy would involve gradually introducing the individual to financial activities they avoid due to fear or anxiety. These activities could include checking bank statements, reviewing credit card bills, creating and maintaining a budget, or even discussing financial matters openly with a partner or family member. Working with a financial planner can help the person feel more secure during this process.

Cognitive-behavioral therapy (CBT) is a psychological treatment approach based on the interplay between thoughts, emotions, physical sensations, and behaviors. According to Sgarbi, the idea is that by modifying one of these elements, the others can also be affected.

In addition to addressing the patient’s thought patterns, CBT focuses on altering maladaptive behaviors linked to financial phobia. This might include gradually introducing financial activities that the patient avoids due to fear or anxiety, utilizing techniques of gradual exposure.

Consulting a therapist with expertise in economic psychology can accelerate this process of change.

The expert also emphasizes the importance of not creating “money-phobic” environments within families and discussing money naturally.

A money-phobic environment is characterized by anxiety, stress, and discomfort around financial matters. In such settings, people may avoid talking about or dealing with money, evading conversations about finances or even avoiding checking their own bank statements or credit card bills.

Overcoming a money-phobic environment requires shifting collective mindsets toward a healthier and more open approach to financial discussions. This could involve financial education, honest and open communication about money, and seeking professional help to address financial concerns and related anxiety.

“This is a way to prevent the emergence of new phobias in those who don’t already have them. However, if you already suffer from this phobia, it’s crucial to seek professional help and resolve it as soon as possible,” concludes Simone Sgarbi.