3 Reasons Being Broke Is Your Greatest Fear — and How To Overcome It
Written by
Cindy Lamothe
Edited by
Levi Leidy
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Depending on how you look at it, death can seem far away — while not having enough money in the bank is something you face on a day to day basis.
And it’s something weighing on many people’s minds. A 2023 report from Allianz Life found that 61% of Americans say they are more afraid of running out of money than they are of death. While that sounds bleak, according to experts, not having enough money isn’t as bad as living with long-lasting money anxieties.
So why do these money fears run so deep? GOBankingRates asked experts to discuss in-depth what’s behind these anxieties and how we can overcome them.
Our Childhood Experiences Shape Our View of Money
“As a licensed clinical social worker, I see the deep-seated fears around money that many people struggle with,” said Dr. Elizabeth Barlow, founder of Kinder Mind.
These fears, she said, often stem from childhood experiences of lack or loss.
“Witnessing family financial troubles or instability at a young age can lead to a lifetime of anxiety around earning and spending,” she said. “The most common way I see money fears manifest is in unhealthy financial habits, like overspending or hoarding money rather than investing it.”
She explained that these habits provide temporary relief from anxiety but ultimately make the underlying fears worse. “The key is recognizing these fears and habits, then reprogramming thoughts and behaviors.”
David L. Blain, CFA and chief executive officer at BlueSky Wealth Advisors, has also found this to be true for many.
“I often see the deep fear many people have around not having enough money or going broke,” he said. “These anxieties usually start early in life, often from witnessing financial hardship or instability in childhood.”
Money Fears Stem From a Lack of Meaning
When asked why people are so afraid of running out of money and not having enough, Jordan Grumet, hospice doctor, host of the “Earn & Invest Podcast” and author of “The Purpose Code,” said it’s complicated but mostly stems from issues having to do with meaning.
“Meaning concerns itself with our cognitive understanding of our past. It is the stories we tell ourselves about ourselves,” he said.
He explained that happy people tend to tell themselves a hero story, in which they had agency to effect change. Unhappy people, on the other hand, tend to tell themselves a victim story, in which they had no control over what happened to them.
“Ultimately, meaning aims to prove to ourselves that we are enough. Happy people tell themselves that in the past they were good people who might have had to deal with tough or difficult circumstances,” he said.
What does all this have to do with money? According to Grumet, our sense of meaning and our past is heavily learned through our surroundings.
“Often our beliefs about money are handed down through the generations through generational and lived trauma,” he said. “My grandmother, for instance, grew up in an orphanage during the Great Depression. She exhibited hoarding behaviors that she passed down to my mom.
“My mom was reluctant to spend money in the first place, but then my dad unexpectedly died at the age of forty.” Reacting to this trauma, he said, his mother modeled very conservative spending and saving beliefs for him while growing up.
Our Money Scripts Influence Us
“Money scripts are the unconscious beliefs and values that people have about money, which can shape how they feel about it and manage their finances,” said Grumet.
He explained that financial psychologist Dr. Brad Klontz first coined the term in 2011 after identifying distinct money “belief patterns” or “scripts” in his studies. “Klontz says that money scripts are typically developed in childhood and can reflect trans-generational beliefs.
“Tying this all together, often our sense of meaning is filled with these generational money script narratives that detach ourselves from a sense of agency when it comes to money,” Grumet continued. “We feel that we were a victim of having not enough, and we feel like we didn’t have control to improve things.”
He explained that we overcome these fears about money when we realize that we always had enough — and always were enough. “We are the heroes of these stories and survived against the odds.”
He said this process, called narrative therapy, is a reassessment of the stories we tell ourselves about ourselves. “We assign a new sense of meaning and control and let go of the feelings of helplessness.”
In this way, we can reassert our own sense of goodness despite being a part of difficult situations. Grumet added that money shouldn’t be a goal on its own — it’s a tool that can help provide a good life.
“Having a better sense of our past and telling ourselves better stories helps us realize that having more money won’t solve our [other] issues,” he explained.
Overcoming Our Money Fears
According to Dr. Barlow, cognitive techniques like challenging negative thoughts about money and setting small finance goals can help build confidence. “I also recommend learning budgeting and investment skills, so you feel more in control and can see your money working for you.”
She said taking action, however small, helps break the cycle of fear and moves you closer to financial freedom, and added that many find financial counseling or therapy helpful.
She recommended speaking with a professional to provide accountability and an outside perspective to overcome deep-rooted fears. “The truth is, while being broke is difficult, financial fears are often worse than the reality. With support, anyone can overcome them.”
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