Fear of Money Is Keeping You Broke: Here’s How to Fix It

The fear of money is the deep anxiety that stops you from negotiating your salary, trusting yourself with credit cards, or living your Rich Life. Once you understand how that fear is shaping your choices and costing you money, you can start to replace it with trust, control, and the freedom to live the life you truly want.

How to Tell if You Have a Fear of Money

You might constantly second-guess even minor purchases, stressing over whether you'll need that money later. You might avoid looking at your bank statements or credit card bills because the numbers alone trigger anxiety. When someone invites you to dinner or suggests a trip, your mind goes straight to the cost—not the experience.

When you’re afraid of money, you might feel guilty spending on things that aren’t strictly necessary, even when they bring you joy. You may assume you can’t afford something, like a house, even before you check the facts. You might decline promising opportunities—conferences, courses, or side hustles—just because they involve spending upfront. And worst of all, even conversations about money can make you feel exposed, like someone’s shining a light on your biggest insecurities.

A real-life example of fear of money

I see so many people who track every penny and still feel broke. On my podcast, I work with Kristen and Josh, who can’t shake the fear that money will always control them. Their story is the perfect reminder that freedom comes not from budgeting harder, but from shifting your mindset and trusting your plan.

The Brutal Truth About What You're Really Afraid Of

At its core, fear of money is not about how much you have—it's about not trusting yourself to manage it without losing control. Many people set strict financial rules to protect themselves from imagined disasters: Don’t use credit cards, don’t spend on fun, don’t trust yourself with financial freedom. These rules feel safe, but they block growth.

Take credit cards as an example: If you always avoid them because you’re scared of spiraling into debt, you’ll never give yourself the chance to learn how to manage them responsibly. That avoidance keeps you financially stuck.

Your invisible money scripts are running the show

What we say about money often reveals what we really believe. These beliefs—called invisible money scripts—shape our financial choices far more than we realize. They're the voice in your head that whispers "you can't afford that" or "that's too risky" without any actual analysis of your situation.

It's even more revealing when you can identify these money scripts by listening to the ways people talk about money:

Many of us make day-to-day financial decisions without realizing the invisible scripts that are guiding these choices. Money is wrapped up in fear—the fear of never having enough, the fear of judgment, and the fear that you’ll make a mistake and be stuck forever.

Why Smart People Make Terrible Money Decisions When They're Scared

Even people who seem financially savvy fall into the trap of fear-based decisions.

Fear turns you into a financial control freak

When you’re scared of money, you try to control every penny. You obsess over budgeting tools and receipt tracking—and you’ll likely avoid learning how to grow your income or invest wisely. You’ll spend an hour driving to save a couple dollars on groceries, but won’t spend that same hour learning how to automate your finances or negotiate a raise.

This obsession with the small stuff creates a false sense of control. It makes you feel like you’re being smart with money, but you’re really just avoiding the real work that could change your life.

You mistake being cheap for being smart

Fear often wears the disguise of financial responsibility. You tell yourself you’re being smart by skipping the vacation or never buying anything full price, but there’s a difference between being strategic and being fearful.

Strategic spending means cutting ruthlessly where it doesn’t matter so you can spend meaningfully where it does. Fear-based cheapness means cutting everything out of anxiety and guilt. Ironically, this ends up costing you more. You might buy low-quality items that need frequent replacing, miss out on opportunities to grow or connect, and waste energy agonizing over small purchases while avoiding the big wins.

What Having a Fear of Money Is Costing You

Left unchecked, a fear of money can quietly limit your career, relationships, and future in ways most people don’t recognize until it’s too late.

Your fear is costing you way more than money

Living in financial fear doesn’t just impact your savings account—it shrinks your entire life. When you live in a state of financial fear, you hesitate to ask for a raise, avoid building a business, or pass up networking events that could double your income. You stay in the wrong job because financial stability feels safer than pursuing your goals. You never calculate the opportunity cost of fear: the money you could’ve made, the skills you could’ve developed, or the life you could’ve created.

Fear destroys your relationships and social connections

Fear of money quietly chips away at your relationships. You may become the friend who never wants to split things evenly. You skip out on events because the cost feels too high. In romantic relationships, money becomes a topic you either obsessively control or completely avoid. You skip opportunities to connect with people—professionally and personally—because you’re too focused on the price tag. Even worse, your kids pick up on it. They learn that money is scary and scarce, and those are lessons that last for generations.

Take my podcast guests Matt and Eliza as an example of how fear of money can threaten a relationship. After building their wealth for years, they’ve gotten to a point where they’re too mentally paralyzed to spend it:

Their constant mental gymnastics over spending and depriving themselves of the things they enjoy has Matt and Eliza struggling to live life to the fullest. Follow along with the rest of the podcast below as I walk them through shifting their mindset, especially now that they have a baby on the way.

“Her socks have holes but she's too cheap to buy new ones”

Fear kills your ability to think long term

Financial fear locks you into short-term survival mode. Instead of looking for ways to grow your money, you cling to what little you have. You don’t invest, you don’t take calculated risks, and you avoid any decision that could backfire. In the name of playing it safe, you settle for financial mediocrity. Meanwhile, the people who are willing to take smart risks are building wealth, careers, and lives that expand year after year.

How to Stop Being Afraid and Start Trusting Yourself With Money

Breaking free from fear doesn’t happen overnight. Here’s how to begin moving from anxiety to confidence.

Know that you can trust yourself

You can treat yourself to a nice restaurant experience once—and truly enjoy it—and also trust that you're not going to fall into a habit of going there every single week.

You can use credit cards without overspending (especially if you follow the systems in my book). You can pay off your debt and avoid accumulating new debt. You can become rich and do good. Trust yourself.

The key is building this trust gradually through small wins rather than trying to overcome decades of fear overnight. Start with low-stakes decisions where you practice trusting yourself with money, then gradually work up to bigger financial choices.

Know that you can create more money

Your money is not a fixed pie that you have to guard and protect exhaustively—you can also expand the size of the pie altogether.

You can negotiate your salary or find an entirely new job. You can start a business, even if you don't have an idea. You can build your network to sidestep people with 10 years more experience than you and get perks you've never dreamed of. All of these things can dramatically increase your income. Stop being afraid of waste

For many Americans, one of the biggest financial fears is waste. You might even be thinking, “Oh no! Ramit, if I start spending more on the things I love, I might waste some of my money!”

If you spend your entire life worrying about waste, you’ll miss a simple fact of life: In any system of sufficient complexity, there will always be waste. Yes, you should take measures to control it, but you should also accept that there will be a certain amount of garbage and move on!

I know that I'll likely buy courses and attend conferences that won't be perfect for me. I know I'm going to eat at an unmemorable restaurant. I know I'm going to make bad hires. So what? I'd rather try new experiences and learn from each one than sit back and let the boogeyman of waste scare me into doing nothing at all.

Start with the 85% solution instead of waiting for perfection

Fear thrives in perfectionism; this might look like waiting to invest until you know everything, or continuing to tweak your budget instead of using it. The smarter move is to start with something that’s 85% good and improve it as you go. A decent investment plan started today beats a perfect one you start two years from now.

Apply this to everything. Use a basic budget app instead of building the perfect spreadsheet. Start freelancing with the skills you have, rather than getting another certification first.

Practice making financial decisions quickly

Train yourself to make small money decisions without endless overthinking. Decide on any purchase under $20 instantly. Give yourself 24 hours for anything under $100. For bigger decisions, give yourself a reasonable deadline, such as one week for investments under $10,000 or one month for major purchases like a car. This builds trust in your instincts and helps you move through money choices with clarity—not anxiety.

The Easiest Antidote to Fear of Money

If fear is the problem, clarity and confidence are the cure. These simple, practical strategies can help you take back control.

Build your Conscious Spending Plan to eliminate money anxiety

Fear thrives in ambiguity. When you don’t know what’s coming in or going out, every purchase feels like a potential mistake. A Conscious Spending Plan eliminates that anxiety by giving you a clear framework for every dollar you earn. Once you’ve used it to plan your fixed costs, savings, and investments, you’ll know exactly how much is left for guilt-free spending.

Identify your Money Dials and spend extravagantly on what you love

Your Money Dials are the few things you love spending money on. Maybe it’s travel, so you’ll happily spend $5,000 on a fantastic vacation but still drive a 15-year-old Honda to work every day. Or maybe it’s convenience, so you’ll pay for house cleaning and grocery delivery, but never buy expensive clothes.

When you spend intentionally on your Money Dials—and cut costs elsewhere—you feel in control. You’re not "splurging," you’re living. And there’s no guilt when your spending aligns with your values.

Create a "fear fund" for financial experiments

Set aside 5% of your income for trying things that scare you financially, whether it’s taking a class, investing in a business, or trying a new tool. When that money is earmarked for experimentation, you can take smart risks without endangering your core budget.

Track what you learn from each experiment—and not just the financial return, because the education and confidence you gain are often more valuable than the money. This fund can transform fear into curiosity, helping you build the risk-taking muscles you need to create wealth.

Build financial confidence through small wins

Confidence is built through repetition and success. Start by automating one financial task each week: your rent payment, your investment contribution, or your credit card payment. Every automated system proves you can handle money responsibly.

Set mini-challenges, keep a log of your wins, and review them often. Did you spend exactly your budgeted amount on groceries for the month? Did you save $100? Celebrate these wins, big or small, because they’re evidence you can trust yourself with bigger financial decisions.

What Are You Going to Do Today?

You can’t afford to sit in fear any longer. It’s already costing you more than you realize—in money, in missed opportunities, and in quality of life. You’ve got three real options to start tackling right now:

Start building financial confidence immediately. Download the Conscious Spending Plan and fill it out with your real numbers, not what you think they should be.

Focus on expanding your income first. Start learning how to negotiate or explore a side hustle that matches your skills.

Get your foundation solid before tackling fear. Pick up my New York Times bestselling book I Will Teach You To Be Rich and go through it step by step.

The one thing you can’t afford to do is stay stuck. Fear won’t go away on its own, but your confidence will grow the minute you take action.