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Depressed and Worried About Finances? How to Become More Financially Savvy

No one starts off in life wanting to worry about money. In fact, most of us dream of achieving wonderful things, including the ability to buy what we want, when we want it. It’s only after a series of disappointments — some call them hard knocks — that we come to the realization that money only goes so far. If we fail to learn the lessons of budgeting and saving, we’re destined to keep running into financial problems. This can lead to many a sleepless night, accompanied by worry and depression about finances. Finding a path from what I’ll call financial illiteracy to being more financially savvy may not be easy, yet it is doable.

I know. I’ve been down this path and can firmly attest to the more secure and confident future at the other end of the journey. Here, I’ll share some of my experiences in the hope that they may be helpful to others struggling with financial woes.

Learn how to budget.

Making ends meet is a difficult lesson to learn and takes a lot of practice to feel comfortable stretching available household funds to cover necessities. Finding any leftover money to pay for non-essential items, gifts, entertainment, travel, personal services such as a much-needed massage or music or dance lessons for the kids can seem improbable. Here’s where learning how to set and stick to a budget comes in handy. In fact, without a budget, it’s too easy to fall into the trap of relying on credit cards to not only get you through the lean times, but also to give in to temptation to buy something you know you can’t afford.

When you first start using a budget, it seems punitive and disagreeable. That’s likely because you’ve never cultivated the discipline to live within your means. In my case, trying to raise my children after a divorce meant sacrificing many nice-to-have things just to keep food on the table, the rent and utilities paid, gas for the car, doctor’s visits and medications and more. There was never enough money. The worst part was that I never balanced a checkbook. I just wrote the checks with a vague idea of what was left in the account. Looking back now, I see how ridiculously naïve that was. Several bounced checks and tacked-on fees later, I faced reality with a sober understanding of the necessity for accurate financial accounting of what comes in and what goes out. Talk about feeling depressed and worried. I couldn’t sleep at night because of my financial incompetence.

My recommendation is to get help from someone you know and trust who can teach budgeting fundamentals. Online help is also available. Don’t overlook budgeting. It’s crucial for getting out of the pit of financial insolvency and making progress toward financial acumen and financial literacy.

Never buy out of guilt.

I always felt guilty and less than some of the other parents of the kids at my kids’ school. Almost all those kids had two parents, a nice house (we lived in a series of apartments), two cars, great clothes and lots of toys. In comparison, what I was able to provide seemed inadequate, at best. To say I felt tremendous guilt is an understatement. I compensated by overspending so that my children would be well-dressed and have at least a few toys they wanted. No, we couldn’t afford to eat out or go on vacations, unless it was a day-trip or somewhere we drove and could stay with friends. We did, however, have a strong, loving bond that continues even though they’re adults with lives and families of their own. With the help of therapy and learning from my many mistakes along the way, I did come to the realization that buying out of guilt is a misguided endeavor.

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Buying to fill emptiness always backfires.

One point I’d like to emphasize is that you can’t fill a hole with stuff. That is, buying to eliminate a feeling of emptiness only serves to deepen the hole. No matter how much you buy, it never fills up. I know this for a fact, having gone into debt on more than one occasion in my mid- to late-30s just to feel better about myself.

My recommendation if you’re lonely is to join a club, get involved in a hobby where you interact with other like-minded people. To learn more about healthy financial habits, go online and participate in chats and forums with experts. You’ll benefit from gaining worthwhile tips and realize that others are in the same position.

Get professional therapy for depression – shopping doesn’t work.

Not everyone who needs help figuring out their finances suffers from depression. It may be a contributing factor in certain situations, but it’s usually not the major one. Depression that sticks around for longer than two weeks may be a diagnosable condition of clinical depression. This requires professional therapy to overcome. Once again, I speak from experience. In addition to financial illiteracy and a few other bad behaviors I developed along the way, I felt a constant dread, a feeling that no matter what I did, it wouldn’t succeed. I couldn’t get past the feeling that I didn’t deserve to be happy, to enjoy having money in the bank. Maybe I was a bad person, selfish, a spendthrift. After all, my go-to way to stop feeling sad was to buy something. But shopping wasn’t working. There was more to my depression and anxiety than that, however, and the only way back for me was psychotherapy. Medication helped counteract the black hole I seemed to be in, while I slowly gained a better perspective on healthy ways to cope with disappointment, find value in my own self-worth, and not attribute overall well-being to how much money I had in the bank.

Interestingly, researchers have identified five new categories of mental illness that aren’t just broad depression or anxiety diagnoses. The intent is to disentangle symptom overlap and eventually provide targeted and tailored treatment choices. I’m sure this would have helped me greatly, so it’s an exciting development in the mental health field.

Start saving early. Every little bit helps.

I never thought I could spare a dime in my early adulthood. That was based on a childhood where, even though I received a weekly allowance, I always spent my money as fast as my parents gave it to me. On the rare occasions I desperately wanted something but didn’t have enough funds, my parents insisted that if I really wanted it, I could wait until I had enough to buy it. That lesson, however, was short-lived. After I got what I wanted from a few weeks of saving, it was right back to living from allowance to allowance. This continued into adulthood and trying to live paycheck to paycheck. The best thing that happened was that I worked for a large corporation that had retirement savings and a 401K (although I was completely unaware what any of that meant for a while). I did see pamphlets that touted saving early, so I guess the seed was planted.

Invest in a 401K, especially with company matching.

What did jumpstart my savings plan was when someone in Human Resources took the time to walk me through how I could get started in a 401K plan with a little each paycheck – going directly into savings before taxes – and build this over time into a nice nest egg. Best of all, the company offered a matching contribution. At the time, I believe it was $1 for each $1 invested, although that later dropped to 50% match and even disappeared during rough economic times. With a step-by-step analysis of how my money would grow and what I’d wind up with each paycheck, I wound up not suffering from too much less income. In fact, it was about the same. This was a win-win and a definite wakeup call for me. I only wish I’d learned about the value of sticking money into a 401K earlier. As it was, I did accumulate a tidy sum that continued to grow over time, even factoring in major stock market declines.

Always search for the best deals.

Becoming financially savvy also means spending your money wisely. Get in the habit of always doing price comparisons, looking for coupons, promo codes and deals. Compare offers from competing stores to see which is better. Look at apples-to-apples comparisons, not a budget item versus a high-end one. Is a warranty included? If so, how long? Does the store or company do price match if you find the identical item elsewhere for less money? It doesn’t matter what product or service you want or must buy, there’s always a deal. You must search it out, though. That’s being smart and frugal. After all, the wealthiest people know the value of a smart deal. Don’t think for a minute they’re eager to waste money by paying full price. They didn’t get wealthy by ignoring savings just waiting to be scooped up.

Depressed and Worried About Finances? How to Become More Financially Savvy

Suzanne Kane

Suzanne Kane is a Los Angeles-based writer, blogger and editor. Passionate about helping others live a vibrant and purposeful life, she writes daily for her website, She is a regular contributor to Psych Central. You can reach her at [email protected].

APA Reference
Kane, S. (2018). Depressed and Worried About Finances? How to Become More Financially Savvy. Psych Central. Retrieved on August 5, 2020, from
Scientifically Reviewed
Last updated: 8 Oct 2018 (Originally: 16 Dec 2017)
Last reviewed: By a member of our scientific advisory board on 8 Oct 2018
Published on Psych All rights reserved.