Saving too little? Spending too much? How to know if your money worries are rational (or not).

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It’s normal to worry about money. The trick is figuring out if your worries are valid or not.

Worry is tied to uncertainty. We fret about potential outcomes that breed fear and adversity. Running out of money is among the scariest of those outcomes: The very thought of losing money can trigger a downhill spiral where we imagine a grim future beset by deprivation.

If we’re going to worry about money, the real test is separating rational concern from irrational panic. How can we differentiate between the two?

For starters, step back. Place your worry in a larger context to determine its validity.

“When a client worries about money, I think about what other factors are going on in the environment that might be contributing to that worry,” said Sarah Mouser, a certified financial planner in McLean, Va. Examples include periods of sustained market volatility, stressful milestones or transitions in one’s life.

A common irrational worry arises among pre-retirees as they look ahead. Even if Mouser crafts a financial plan that ensures they’ll have enough money throughout retirement, angst can take hold. “It’s not just about the numbers,” she said. “It’s about the big emotions around major life decisions” like segueing into retirement.

Those emotions can stoke runaway worry. Shifting from what financial advisers call wealth accumulation to wealth preservation is disorienting, and even harrowing, for many newly retired folks.

On the other hand, it’s entirely rational to worry about money if you don’t have enough to get by. Advisers urge clients to set aside at least six months and preferably one year of cash reserves for emergency expenses. Many people lack sufficient funds to do so.

In addition, feelings of fear or resentment can undermine our efforts to manage our finances. That’s why some advisers ask new clients to reflect on the role of money in their life, starting in childhood. As they relate their “money history,” they reveal how they view money and their earliest memories of it.

“If you’ve seen your parents be wasteful with money, then you might become miserly with money even if you have lots of it,” said Judy Ho, a Los Angeles-based clinical neuropsychologist. “It’s based on, ‘I can’t be like my parents.’ You want to be the opposite.”

If you grew up watching your parents equate their self-worth with their net worth, you may worry that you never have enough. “You might see money as an end-all to your success and happiness,” said Ho, author of “The New Rules of Attachment.” “It becomes central to your self-esteem,” she notes, as you crave more and more of it to feel good about yourself.

Large expenditures can also spark irrational money worries. Even wealthy people can feel antsy about purchasing a new home or taking an extravagant vacation.

“They can have lots of liquidity and a very strong cash flow and still have an irrational fear about money,” said Reese Harper, a certified financial planner in Salt Lake City.

Clients who worry about money often harbor deeper concerns, he adds. By listening attentively, he encourages them to open up and share their struggles. “Usually, they get around to talking about an adjacent topic like a divorce, a business transition or a conflict with someone at work,” Harper said. “The fear and worry most often comes from a different part of their life, not money.”

For example, a client of Harper’s fretted about what he perceived as poor performance in his portfolio. It turned out that his anxiousness had more to do with the high cost of his daughter’s wedding and a new vehicle he purchased. Then he revealed his anguish about selling his business to a management team that he believed was running it into the ground.

Harper understood that the real source of his client’s agitation had little to do with money: It focused on his dismay in selling his business to a buyer that was ruining it. In trying to distinguish between sensible concern about money and aimless nail-biting, try this thought experiment: Imagine it’s a year from now. Ask yourself, “Am I still worried about money?”

Through this exercise, you can tell if you’re right to worry because, say, your overspending habits jeopardize your long-term financial plan. Or you might realize that despite a market downturn’s impact on your stocks, your portfolio can withstand the hit. In this way, you’ll learn to separate real money problems that merit serious attention from emotional flare-ups that dissipate over time.

More: ‘If I wasn’t afraid of finances, I would just retire.’ I’m 67 and have an annuity, but I’ve spent nearly $100,000 just paying bills. Do I need professional help? 

Also read: Here’s proof that underdog stocks can make you more money than the market’s ‘best in show’

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