It is three in the morning and you are lying awake. The car made a strange noise today. If it breaks down, I will not be able to get to work. If I cannot get to work, I will lose my job. And then what? Within a few minutes you have gone from a strange noise to rent you cannot pay. Your heart beats faster, but you are not a step further on.
Many people know these kinds of thought spirals, especially when it comes to money. The good news is that you can learn to recognise them and turn them around. Not by looking on the bright side of everything, but by turning your worries into a plan.
What happens when your mind makes a disaster
In cognitive therapy, which the psychiatrist Aaron Beck developed from the 1960s onwards, this is called catastrophising: you jump from a possible setback straight to the worst imaginable consequence, and you treat that consequence as if it were certain. Your mind does not do this to torment you. It is trying to protect you by spotting danger early. It is just that under stress the system often overshoots.
The psychologist Thomas Borkovec, who researched worry for decades, described worrying as an attempt to solve a problem that gets stuck in “what if” questions. You think about it a great deal, but you do not reach a decision. That is what makes worrying so exhausting.
What is more, most worries do not come true. In a study by Lucas LaFreniere and Michelle Newman (2020), people with an anxiety disorder recorded their worries for a while and later checked what had actually happened. Roughly nine out of ten worries did not come true. It was a small group and a specific population, so you cannot simply apply that figure to everyone. But it does show how far off our minds can be.
Worrying or planning: the difference
Worrying and planning look alike, because in both cases you are thinking about the future. The difference lies in the result. After worrying you feel worse and do not know what to do. After planning you know what your next step is, even if the problem has not yet been solved.
A powerful tool here is what are known as if-then plans. The psychologist Peter Gollwitzer (1999) showed that people carry out their intentions more often if they decide in advance what they will do in a specific situation: “If the garage says the repair will cost more than five hundred euros, then I will ask for a second quote and look at my buffer.” A review by Gollwitzer and Paschal Sheeran (2006) of dozens of studies confirmed that such plans make it easier, on average, to take action.
An example: Lotte
Lotte (35) is a self-employed graphic designer. When her biggest client paid two invoices late, she started to worry. What if he never pays? What if I cannot pay my taxes and social contributions? What if I have to close my business? She slept badly and no longer dared to look at her accounts.
Her coach asked her three questions. What do you know for certain? What would you do if the worst did happen? And what can you do today? Lotte saw that she knew for certain the client had been paying for six years, just sometimes late. If he really did not pay, she had enough buffer for two months and could ask the organisations she pays her contributions to about the options for deferral. And today she could send a friendly reminder and call. Two days later the money was in her account. More importantly, Lotte resolved to build up a small reserve for late payments from then on, so that the next delay would no longer cost her sleepless nights.
Exercise: from worst-case scenario to plan in four steps
- Write out the worst-case scenario in full. Put the whole train of thought on paper, right to the end. On paper, a spiral often looks less convincing than it does in your head.
- Separate facts from assumptions. At each step, ask: do I know this for certain, or do I just think it? Where necessary, look at the real figures, such as your account balance, your buffer or the date of an invoice.
- Make an if-then plan for the worst case. Ask yourself the question the psychologist Gary Klein (2007) uses in what he calls a pre-mortem: suppose it goes wrong, what would the cause be and what will I do then? Write down two or three concrete responses.
- Choose one action for today. Something small that is within your control: a phone call, an email, a look at your budget. Do it, and cross it off.
If the worries keep coming back anyway, schedule a fixed worry slot of fifteen minutes, for example every day at six in the evening. Borkovec and colleagues (1983) had people deliberately postpone their worries until such a fixed moment, and this reduced the time they spent worrying. If a worry comes up during the day, jot it down briefly and tell yourself: I will think about that later.
Everyone worries sometimes, especially about money. If you notice that worrying is persistently disrupting your sleep, your work or your relationships, or that you are constantly anxious, talk to your GP. A psychologist can help you further. If you want to talk to someone right away, you can call a helpline in your country day and night; if you are in immediate danger, call the emergency number straight away.
Resilient thinking brings peace of mind
Thinking resiliently about money does not mean you will never worry again or that you brush risks aside. It means you know what you will do when things go wrong. That certainty brings calm, even when the future remains uncertain. Peace of mind does not lie in the absence of problems, but in the confidence that you have an answer to them. That is a form of financial self-care you can practise every day.
If you want to know how much stress your finances are causing you right now, try the money stress thermometer. With the 30-day action plan you turn your plan into small, achievable steps. And if you would like to untangle your worries into a plan together with someone, a conversation with one of our coaches can help you think clearly again.