Many Millennials, even those with high incomes, feel stressed about money. When we understand the reasons (hint: looking at you mom and dad!), we create opportunities to adjust our financial behavior.

On this episode of the Millennial finance podcast Financially Well, I’ll talk about why so many people feel stressed about money. In particular, I’ll discuss how we can use this awareness about our money feelings to improve our financial behavior and minimize our financial stress.

How Do You Feel About Your Personal Finances?

Michael Batnick writes about personal finance on his blog, The Irrelevant Investor. And on September 14, he wrote an article entitled, “How You Feel About Money” The article begins:

“There is one thing that trumps everything else when it comes to how you feel about money. It doesn’t matter how much you make.… [or] how much you’ve saved. It definitely doesn’t matter where interest rates are. The thing that most influences how you feel about money is how you grew up around money.”

We all likely can remember a time recently when we felt stressed about money. But is it crazy to claim that how we feel about money is more important than our income? Or our savings habits? I don’t think so. Many of our financial choices are more straightforward than we believe. But there’s a disconnect between our actual options and how we perceive them. And it’s our past experiences with money that create the disconnect. It’s the beliefs that we hold about money that often make our personal finances feel so daunting, regardless of the reality.

The Things You Say Aloud When You’re Stressed About Money

Before getting into Michael Batnick’s article, I want to put his thoughts into context. I regularly discuss money with other Millennials, either as their financial advisor or through a financial wellness program. When these conversations first start, I never immediately start talking about specifics. For example, investment details. Instead, I ask clients to tell me what’s on their mind. And do you know what they typically choose to express first? Their confusion. Self-doubt. Their anxiety. In short, why they’re stressed about money.

And this dynamic is invaluable to me as a Certified Financial Planner. I can only help other Millennials put together a sustainable financial plan if I understand the reasons for their financial behavior. I recently worked with a couple in Washington, D.C. who would like to buy a vacation home in the next 10 years. Based on their financial circumstances, I believe they can invest some savings over this time span to help them reach their goal. But, if they grew up in a household in which their parents feared a stock market decline, this strategy may not work for them. If the stock market does dip during the second year of their investment timeline, they might withdraw their funds. And they might ultimately end up worse off.

The Link Between Our Experiences & Our Financial Behavior

Here’s the aspect of Batnick’s article that I value most: he shares just such a personal story about how his childhood experiences with money might influence his financial behavior today:

He writes, “One time I was at the diner, and my mother told me I couldn’t order something from the menu because money was tight. I don’t remember how old I was, but I remember exactly how I felt. I was angry.… ashamed. I feel bad for having those feelings, even though I don’t fault myself for having felt them. I was a child. It was confusing.”

I noted in the last episode, on employee financial wellness benefits, that we don’t talk openly about our money often enough in this country. This even extends to private financial conversations within our own families. It’s not easy to discuss finances with our parents or partners, especially when someone is stressed about money. But whatever courage you can muster can create so much more clarity around your own financial decisions.

There’s No “Right” Solution When You’re Stressed About Money

With that in mind, I want to bring up another situation in which our past experiences with money often impact our financial behavior.

College financial planning decisions bring up strong emotions for many Gen X and Millennial parents. This topic is a prime example of why people can unexpectedly feel stressed about money. Many young parents feel some abstract, societal pressure to invest some money in a college savings account each month.

But how much time have you actually devoted to thinking about this decision? How do you feel about your money being used for your child’s college education? A Millennial parent who continues to suffer through student loan payments may want to save as much as possible for college. They don’t want their kids to experience the same stressful situation. But a parent who attended a relatively low-cost in-state school and worked throughout college may prefer to invest more for retirement. One approach isn’t necessarily better than the other. They see the future differently, though, based upon how they feel about saving and paying for college.

Analyzing Our Financial Behavior to Improve Money’s Role in Our Lives

I want to highlight how Batnick ends his article. He writes, “I understand why these people have the relationship with money that they do. You can’t undo the experiences that formed you.”

This is a more pessimistic conclusion to this article than I would have written myself. I completely agree that our life experiences, especially those as children, fundamentally shape our financial behavior as adults.

But, most of us have so much room for improvement in how we think about money’s role in our lives. With the support of friends, spouses, and/or therapists, we can identify and become more aware about why, exactly, we feel stressed about money. Mitigating these feelings will take time and effort. The opportunity is there, though. 

Start With Small Acts to Feel Less Stressed About Money

I hope Batnick’s article and my discussion today encourage you to reflect on times that you recently felt stressed about money. You may not be able to change past life experiences. But you can talk about them. And you can pause the next time you need to make a meaningful financial decision. Even this minor act can help you to recognize when unhelpful feelings about money are influencing how you live your life. Those feelings may not change overnight, but the path to progress becomes more apparent when we going through this intentional, thoughtful process.

Check out Batnick’s article at The Irrelevant Investor. Again, it’s called “How You Feel About Money.” I encourage you to check out his blog and support him on social media. And, of course, subscribe to this Millennial finance podcast to learn about more ideas that you can apply to your personal finances.

[Editor’s note: this article reflects the transcript (which I’ve edited for clarity) of a recent Financially Well podcast episode.]

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About Kevin Mahoney, CFP®

Kevin Mahoney, CFP® is the founder & CEO of Illumint, a Washington, D.C.-based company that offers financial planning for Millennials. He specializes in navigating the new financial decisions that arise during our late 20s and 30s, such as repaying student loans, buying a house, saving for college, & learning to invest. In addition, Kevin also works as a financial wellness program provider to Millennial employees around the country, including group speaking engagements.