What Financial Anxiety Reveals About Modern Life and Your Mental Health

Money is meant to support our lives, not control them. But for many people, it can feel like the opposite. Emails promise deals you can’t miss. Friends are planning group gifts and nights out. Ads whisper that love looks like luxury. Somewhere between wanting to be responsible and wanting to belong, our relationship with money can turn into anxiety.

According to a 2024 survey from Discover Financial Services, 80% of Americans feel anxious about their finances, and nearly one in three say that anxiety increases during the holidays. In a separate poll, 76% of people reported feeling isolated when it comes to money worries, which often peak right before and after big shopping events like Black Friday.

Beyond personal habits and spending choices, financial anxiety often reflects something larger: the growing gap between how people live and what life costs. Over the past few decades, wages have stagnated while housing, healthcare, and education costs have soared. The result is a widening divide that shapes not only our bank accounts but also our sense of fairness, security, and belonging.

In today’s polarized climate, that divide often becomes political. Economic frustration can influence how people vote, which issues gain traction, and whose struggles are seen as legitimate. Conversations about “financial wellbeing” can’t be separated from the systems that make it easier for some to thrive and harder for others to get by. The truth is, financial anxiety is about so much more than just money. It’s about identity, opportunity, self-worth, and what people believe they deserve from the society they live in.

That mix of pressure, guilt, and comparison—what some experts call the spending spiral—is a key reason many Americans are feeling the constraints of financial anxiety.

What is the spending spiral, and how is it related to financial anxiety?

The “spending spiral,” also called doom spending, is the loop that turns emotional stress into financial stress. It’s a cycle where feelings like guilt, comparison, or exhaustion lead to impulsive spending, followed by regret or shame, which then triggers even more spending to escape the discomfort.

It often looks like this:

1. Emotional trigger → You feel stressed, lonely, ashamed, or “behind” (for instance, seeing friends post expensive gifts or deals).
2. Impulse spending → You buy something to get quick relief or feel in control.
3. Temporary high → The purchase briefly soothes anxiety or gives a sense of accomplishment.
4. Regret or guilt → Once the high fades, you feel worse about your finances.
5. Avoidance or more spending → To escape that guilt, you avoid checking your balance, or spend again to distract yourself.

According to financial therapist Lindsay Bryan-Podvin, “Shaming yourself doesn’t help you make better financial choices. If anything, it makes it harder to engage with your finances at all.”

That distinction matters because shame both fuels and follows overspending. Feeling guilty or embarrassed about money can lead to avoidance, like ignoring your budget or distracting yourself with another purchase to feel temporarily better. Over time, that emotional escape becomes part of the spending spiral itself, where shame triggers the very behavior that deepens it. Breaking that loop starts with recognizing that financial anxiety isn’t a moral flaw, but a pattern that can be understood and changed.

Unfortunately, we live in a world where this loop shows up everywhere. Limited-time sales and emotionally charged ads play on scarcity—telling you time is running out or that success looks like spending. Social media intensifies it when everyone seems to be living a little larger, traveling more, or owning more. The result is a powerful urge to buy relief, not just things. 

Breaking the spiral starts with noticing it. Pause before clicking checkout and ask, “What am I actually trying to feel right now?” That moment of awareness interrupts the automatic pattern and gives you space to make a conscious choice instead of a reactive one.

Your brain and financial anxiety

Spending goes beyond simple finances. At its core, it’s a neurochemical behaviour. Every time you browse, anticipate a purchase, or click “buy,” you’re engaging your brain’s dopamine-driven reward system. Dopamine is most notably involved in helping us feel pleasure and reinforcing learning about rewards.

In consumer-neuroscience studies, activation in the nucleus accumbens (a key dopamine region) reliably precedes purchasing decisions—helping to explain why the anticipation of a purchase (rather than just the purchase itself) feels so compelling. What’s more, the dopamine response is amplified when the reward is uncertain or variable—so limited-time deals, surprise sales, “one-time offers,” and flash messaging all ramp up dopamine’s grip. Over time, this looping of anticipation → purchase → reinforcement can evolve into habitual or even compulsive spending behaviour. 

On the mental-health front, conditions such as bipolar disorder display clear dopaminergic dysregulation, especially during manic or hypomanic phases—marked by elevated mood, impulsivity, decreased inhibition—and overspending is a documented symptom during those episodes.

Additionally, low-friction spending, like using credit cards or digital payments, has been shown to “step on the gas” in the brain's reward centres, further facilitating the dopamine-driven cycle. This suggests that overspending might not only reflect poor budgeting or willpower, but likely signals a neurobiological vulnerability or maladaptive reward mechanism. Recognizing these links is crucial: it opens pathways to integrated care (financial therapy combined with other mental health support) rather than simply framing excess spending as a moral failure.

How financial anxiety affects mental health

Constant worry about bills, debt, or the future activates the body’s stress response, releasing cortisol and keeping you in a near-constant state of alert. Over time, that can lead to fatigue, irritability, poor sleep, and difficulty focusing.

A 2024 American Psychological Association report found that 65% of adults said money is a major source of stress, and nearly half said it negatively impacts their mental health. Financial strain also increases the risk of anxiety and depression, especially in communities where money stress is widespread.

Experts call this a feedback loop: worry about money worsens mental health, and poor mental health makes it harder to manage money effectively. The good news? Skills that support emotional wellbeing—like mindfulness, self-compassion, and open conversations about stress—also help ease money anxiety. Treating your financial health as part of your mental health builds calm, confidence, and clarity around your finances.

The quiet gift of contentment

At its core, financial anxiety often hides the same longing the holidays promise to fulfill: safety, belonging, and love. You can give yourself that gift long before you swipe your card. As Morgan Housel, author of the Psychology of Money, writes: “Realize that not all success is due to hard work, and not all poverty is due to laziness. Keep this in mind when judging people, including yourself.”

When money worries start to feel like more than budgeting can fix, it may help to talk to someone who understands both the emotional and practical sides of finance. Financial therapists are trained to help people unpack the beliefs, stressors, and patterns that shape how they spend and save. (Yes! Financial therapists are a real thing!) They help their clients understand their relationship with money, so they can make choices from clarity, not fear.

Maybe “enough” this season looks like staying home instead of traveling. Maybe it’s one thoughtful gift instead of five. Or maybe it’s just refusing to measure your worth by your receipts.

There’s no countdown clock on peace of mind. And when the holidays fade, that’s the part worth keeping.