Busey Bank | Overcoming Financial Anxiety: Strategies for a Healthy Money Mindset

Given recent U.S. foreign trade policy decisions and the subsequent market instability, it’s tough to avoid that feeling of anxiety that may be lingering in the back of your mind. Recent events have led to headlines and chatter that can cause fear and panic. In times like these, how can you find an oasis of calm for your financial anxiety?

While your feelings may be surfacing based on a multitude of situations—from previous experiences, societal pressure or even your own beliefs—it’s important to identify the source. Maybe you’re overwhelmed by debt, paying for a child’s college tuition or worried about your retirement savings?

No matter your personal financial history, it’s important to work on building a healthy money mindset. Both your attitude and cognitive biases can shape your decisions about money.

Learn how to overcome mental roadblocks and make better financial decisions by implementing some of the tips below into your everyday but, first, let’s discuss the money mindset itself.

The Money Mindset

Research shows that many individuals, no matter their income or credit score, likely have some level of worry over their finances. This suggests that the feeling of stress is common among all types of people.

• Your financial decisions can be affected by your mental state, including worries about the stock market’s volatility, which can lead to selling investments prematurely.
• Long-term thinking encourages saving and investing for the days to come, while short-term thinking can lead to impulse spending, resulting in immediate gratification.
• With an abundant mindset, there is the belief that plenty of opportunities and resources are available, while a scarcity mindset focuses on the fear of running out of resources.

A Shift in Attitude

When stress and uncertainty set in, you're more prone to falling victim to several pitfalls, including poor financial decisions, impulse spending and a short-term focus. How can you shift this way of thinking?

• Be mindful and carefully consider the entire situation before jumping into action.
• If you’re stressed, consider avoiding making impulsive financial decisions and consult someone you trust first.
• Define your values and use them as guideposts in your financial decisions—making sure they match your life goals.
• If you’ve made financial mistakes in the past, try to accept and acknowledge them while you come up with a plan to avoid similar errors in the future.

Some specific thought patterns—known as cognitive bias—can lead us to make irrational decisions. Cognitive biases can significantly impact financial decisions because they cause people to make emotional choices rather than rational ones. Common examples include:

• Overestimation: Can lead to excessive financial risks or ignoring professional advice because of an overestimation of your personal expertise.
• Framing Effect: Decisions are influenced by the amount of information available.
• Confirmation Bias: Leads to individuals favoring information that confirms a pre-existing belief and disregarding information that contradicts what they believe.
• Anchoring: Occurs when initial information is relied on too heavily.

Making Better Decisions

How can you make better financial decisions as you try to leave the negative thoughts and attitudes behind? Below are a few more practical tips:

• Practice mindful spending and saving by taking note of where your money is going and if it aligns with your future or present goals and values.
• Invest in personal development by seeking financial education opportunities—whether it’s an online course, app or even a podcast. Busey offers our complimentary Financial Pathways platform, which offers tools, tips and resources to help you build strong financial futures for yourself, your family and your community. Learn more at busey.com/FinancialPathways.
• Create a list of your short- and long-term goals. Then, add specific action steps that can help you achieve those goals or take steps in the right direction.

Clarity in why you do or don’t make certain financial decisions can improve your overall financial confidence.

Goal setting can be overwhelming at times. Consider implementing a practice like SMART goals to help you create an actionable and well-defined set of guidelines to go by when it comes to planning.

• S – Specific: Goals should be clear and well-defined.
• M – Measurable: Goals should be measurable so you can track your progress.
• A – Achievable: Goals should be realistic and attainable, considering your resources, abilities and constraints.
• R – Relevant: Goals should align with your broader objectives and be meaningful to you.
• T – Time-bound: Goals need a target date to create a sense of urgency and commitment.

By taking a big picture view of your finances, you’ll have a better idea of where you stand and develop a heathier money mindset. The financial advisors with Busey Wealth Management can help you create a plan that helps you reach short- and long-term goals. To learn more about our holistic approach, visit busey.com/wealth-management.

This is not intended to provide legal, tax or accounting advice. Any statement contained in this communication concerning U.S. tax matters is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties imposed on the relevant taxpayer. Clients should obtain their own independent tax advice based on their particular circumstances.

This material is provided for educational purposes only and should not be construed as investment advice or an offer or solicitation to buy or sell securities.

This presentation is for general information purposes only. It does not take into account the particular investment objectives, restrictions, tax and financial situation or other needs of any specific client.