Why We Worry About Money (And How to Stop)

[00:00:00] Dr. Kate Sweeney I like to think of this as kind of taking a little control back from the universe—when you can think, Okay, well, I can't control if I have cancer. What I can control is knowing my insurance coverage, knowing my work leave policies, thinking about how my kids will get to school if I had to be hospitalized for a period of time. You hope you never need them, but that kind of planning can be really reassuring in that moment because at least you feel ready, and there's something to be said for that.

[00:00:24] Jennifer Borget Whether it's waiting for medical results, navigating a career change or managing your money, uncertainty can stir up stress, fear and even full-on avoidance. That's what today's guest spends her time trying to understand. Dr. Kate Sweeney is a professor of psychology at the University of California, Riverside, where she studies how we navigate life's most uncertain moments. From bracing for the worst to the emotional roller coaster of waiting, Dr. Sweeney has spent over two decades researching the psychological tools that help us cope and how we can make decisions with more clarity, even when outcomes are unknown.

In this episode, we'll talk about why uncertainty can sometimes feel even worse than bad news, how flow states can bring relief, and what strategies can help cope with financial uncertainty. If you've ever spiraled into the what-ifs or struggle to move forward in moments of not knowing, this conversation is for you.

Remember, if you enjoy this episode, please leave the show a rating or review, and head to NorthwesternMutual.com to download and print our readiness checklist to help you prepare for your first meeting with your advisor. All right, let's dig in.

Kate, first off, tell me a little bit about yourself and how you got into your line of study.

[00:01:43] Dr. Kate Sweeney I went to graduate school many years ago to study social psychology. That's kind of a vague title, but it basically just means the ways in which humans interact with the world socially and otherwise. And when I went into grad school, I worked with someone who was studying at the time a phenomenon called bracing for the worst. This is something I've studied quite a lot since then. It's the idea that people tend to be really optimistic in general about their outcomes, yet when we start to approach some moment of truth ... so, in one of his original studies, he was looking at students taking an exam. Before the exam, they all felt like they were going to ace it. After the exam, maybe a little more realistic. And then right as he was handing the exams back, you saw people become really pessimistic. They all thought they failed. And I was really intrigued by this idea because I had experienced this many times as a student. So, I saw him give a talk. I thought that sounded pretty cool. I went to grad school to study that little phenomenon of this transition from optimism to pessimism at the moment of truth. And then 25 plus years later, I've kind of taken that idea and broadened it out and thought about the ways in which that process interacts with other ways that we cope with uncertain periods in our life.

[00:02:57] Jennifer Borget Wow, I'm just amazed that in something so specific you've made not only your degree but your studies and everything you're sharing now. I think that's true—sometimes right before something big happens, you're like, Oh, what if something bad happens? What is the emotional impact of uncertainty, and how does it weigh more heavily than maybe the outcome itself?

[00:03:29] Dr. Kate Sweeney When we're uncertain, there's a particular emotional profile that tends to really go with that particular kind of mindset. We are always uncertain about countless things, right? There are lots and lots of things that we don't even think about, that we don't know how they'll turn out, how the future will unfold. We really aren't studying all the various things that we don't know; we're studying the kinds of uncertainty that are front of mind. When you're walking into that doctor's office to get a medical test result, the uncertainty of what is my diagnosis is very prominent in our minds. When you're getting a major exam result back, of course, that's really front of mind. When we're experiencing those kinds of really acute, intense uncertainty, we tend to feel a lot of anxiety. We tend to worry and have the thoughts that go along with worry, which is that spiraling. We all know it: the spiraling of What will happen, what will happen?—that kind of anxious, repetitive thinking about the future. And that is really unpleasant. I'm sure I don't have to tell your listeners. Sometimes, for many people in many circumstances, even if they get some kind of bad news, the diagnosis is not what they hoped for. The exam did not go the way they hoped. Nevertheless, there is a relief of not feeling that anxiety anymore, not having to cope with that worry and being able to maybe take some kind of action to move instead of feeling that paralysis of uncertainty. It's not to say that getting bad news feels good. It certainly doesn't. But it does reduce anxiety, and in some ways that is, again, a relief.

[00:05:00] Jennifer Borget I'm curious; you mentioned bad news, like walking into a doctor's office worried about that diagnosis you might hear. What are some of the major or most common sources of uncertainty that people feel throughout their lives?

[00:05:21] Dr. Kate Sweeney You know, there are big, existential kinds of life uncertainties. I hesitate to bring this up because it's a little depressing, but one of my grad students used to say, “Life is one big waiting period,” you know, for how or when it's going to end, and that is, at some fundamental level, always present. But of course, again, we're not usually thinking about that. There are also, of course, financial uncertainties, there are relationship uncertainties, and there are health uncertainties—those are some that I've studied quite a bit—and professional uncertainties, and then the little kind of mundane but nevertheless emotionally impactful kind of stuff we experience in our day-to-day lives.

[00:05:55] Jennifer Borget And you talked about anxiety before; they can come with that. And one thing you mentioned was financial uncertainty. So, what are some ways that people can manage that? I've had other discussions with other people on this podcast about how a lot of times we just want to say, Oh, I don't want to look at it. If I don't see it, it doesn't exist. You know, I'll have to look at it. This kind of avoidance, I'm guessing, maybe is not the way to handle financial uncertainty best.

[00:06:30] Dr. Kate Sweeney Good question. I actually have also studied information avoidance because, of course, it's part of this whole picture of how we navigate uncertainty. Whether it's good or bad depends on the circumstances. I think information avoidance can be incredibly productive and good for coping if you don't need the information right then. Sometimes we will get in a loop of going down a Google rabbit hole (or probably ChatGPT these days rabbit hole), asking more and more questions about something we really can't take action on. So, you know, when you've had that biopsy and you're waiting to find out the results, there's not much you can really be doing. You could get informed, but at some point that stops being productive. I think a little dose of avoidance is not the worst thing in those cases.

On the other hand, if you are concerned that your bank account is dwindling down, and those bills are about to come due, that's probably not the time for avoidance, though it may be incredibly tempting in that moment because it does manage anxiety. And that can be the front priority at the time, but in that kind of situation, of course, you risk getting yourself into a much worse situation, and you're not doing your future self any favors by taking that strategy. But it is one that people take.

Sometimes we seek information kind of frantically when we're uncertain. Sometimes, we avoid. A colleague of mine, Jenny Howell, and I just published a paper very recently on how that kind of information back-and-forth happens sometimes when we are worried. And again, what we found is that people seek and people avoid information in those moments. It's kind of this balance you're trying to seek, in one moment thinking, Well, more information will be helpful, and in another moment, Never mind. Information is terrible. You know, I'm not going to look up anything.

That's all part of the process of coping. Again, unfortunately, none of it works very well. That's another thing I've learned in my research: That kind of very intense uncertainty we experience very often in our lives is, frankly, just really hard to cope with. And we try lots of things. Not all of it works. I've certainly tried to identify at least a small toolbox that might help us, but if someone hearing this finds it really hard to cope with that kind of uncertainty, they're definitely not alone. That's kind of how we're built.

[00:08:37] Jennifer Borget Well, hey, I want to open that toolbox! What are some things that people can use to manage some of those feelings that they're going through?

[00:08:48] Dr. Kate Sweeney The thing we found that I think is the, I guess, easiest in some ways to implement is a state called flow. This is an idea that's been around since the, I think, maybe '60s, '70s. There was a researcher named Mike Csikszentmihalyi, who really kind of popularized and studied this idea of flow. And probably lots of people have heard of it, but basically it is this state of exquisite distraction when you are completely absorbed in whatever you're doing. There's no other thought in your mind because there's just no room for it. Worries fade away, time passes, and you don't even notice it's happening.

For lots of people, that's some kind of gaming. People who make video games are very aware of the research on flow, and they seek to put people into that state because then they'll keep playing it, they'll keep buying the games.

But lots of things can get us in flow. You want to find that thing that drags you into the activity such that you're really not thinking about anything else. And, go figure, that is really good for quieting those worries and thoughts and calming the whole system so that you're not as freaked out (to use a technical term!).

It doesn't work forever. Once you put the game down or close your computer for the day, you know that you may meet those worries again right there, but I think very often when we're in that really intensely anxious state, any kind of relief is beneficial and might help us to cope a little bit better. So that's one tool that's probably my favorite one because anybody can do it at any time almost, especially since we're carrying around little gaming devices at all times. And I think it can be really helpful as a dose of relief during those periods.

[00:10:29] Jennifer Borget I think sometimes a lot of us maybe turn up our noses to that or think that's not productive, that's not getting us anywhere. And obviously, if you spend too much time in that, like you said, eventually you have to close your computer and come back to life. But giving yourself time to get into that flow and feel okay and step away from that anxious feeling, I think, is really good advice.

[00:10:55] Dr. Kate Sweeney Absolutely. I agree. I think sometimes we might judge ourselves harshly for engaging in these guilty pleasures. But frankly, many guilty pleasures, you know, they're pleasurable because they're getting us into that flow. And, exactly—you have to know the right amount and the right time, not get into that flow state 10 minutes before you have an important appointment. But you know, if you dose it right and time it right, I think it's a really powerful tool.

[00:11:20] Jennifer Borget Dr. Sweeney's research really shines a light on something many of us feel. Sometimes it's not the outcome that's the hardest part; it's the waiting. Up next, we're going to dig into the strategies that can help restore a sense of control during uncertain times. But first, let's hear from Northwestern Mutual on how you can prepare your finances for life's uncertainties.

[00:11:41] Segment Having a plan can give you a sense of peace when facing the unknown. When it comes to your money, having a solid financial plan and sticking to it can help you feel ready for just about anything. Sure, most plans focus on growing your wealth through investments, and that's definitely important. But research has shown that investments alone may not be enough if you're looking to stay financially secure and stable in the long run. That's why we recommend taking a more holistic approach, one that combines investments with the right kinds of insurance products, like life insurance and income annuities. This way, your investments can help your wealth grow over time, while the insurance can offer protection against unexpected events. Research from EY and Dr. Hal Hirschfield has shown that a comprehensive approach like this can lead to better outcomes, both financially and emotionally. So, if you're ready to feel more prepared for the future, head over to Northwesternmutual.com/podcast and download our readiness checklist. It'll help you get organized for your first meeting with your advisor.

[00:12:38] Jennifer Borget Have you met anyone in your community or maybe noticed something in your research where people have been able to navigate these feelings of uncertainty really effectively?

[00:12:50] Dr. Kate Sweeney Our research shows that if you're optimistic, there are other personality traits that can be a bit of a liability. In the classic big five of personality traits that personality psychologists love to talk about, one of them is neuroticism. And that's basically being emotionally all over the place, having a lot of negative emotions. Go figure, that doesn't help us out when we're in these periods of uncertainty. I think my dad is an optimist who is very low in neuroticism, and lucky him! But you know, I think for even the most optimistic, emotionally stable person, one thing that I think has been revealed in a lot of the work I've done is that no one is immune. I think even for the most hearty, resilient person, there are some of these periods of really deep uncertainty that will sort of take us apart, which is, I guess, bad news—but again, also very humanizing: Everyone experiences this. There's something about that; it can be somewhat comforting to know we're not alone.

[00:13:48] Jennifer Borget I feel like I'm that person in my family that's optimistic sometimes to a fault. And my husband's like, You didn't think about this. You didn't plan this, and I'm like, It's going to be fine. We go with the flow. Do you feel that planning can help restore that sense of control or maybe help people with their anxiety?

[00:14:08] Dr. Kate Sweeney It definitely can. And that's true more for some people than others. There was a concept that was identified, I don't know, a few dozen years ago, called defensive pessimism. I would bet all the money in the world that your husband is a defensive pessimist. And the idea there is basically that there are people who, and I'm a little bit this way too, for whom thinking the worst will happen, getting anxious about it, is really motivating. And it doesn't necessarily make us feel too, too bad. I'm sure he's still excited about the vacation, enjoying himself, but that kind of feeling of I'm motivated, I'll prepare, I have this under control is really comforting.

For other people, strategic optimists they're called, and this might be you, that would be like the worst thing in the world. If someone said, Think of all the worst-case scenarios and plan for them, that's going to be really undermining for you; instead, what you really want to think about is here's how it's going to go great and everything's going be fine, and that's sort of the best way to motivate you to ready yourself and get the vacation taken care of.

So it is the case that people differ in that way, but I think also for maybe everyone to some degree, when there is a really stressful experience of uncertainty ... let's take a familiar one from my research: waiting for, let's say, a biopsy result for breast cancer. I've talked to many women who have undergone that kind of uncertainty, who have said that in that period where they're waiting for the result, planning is really comforting. There's nothing really you can do, right? You're out of control in that moment, and that's very distressing. So I like to think of this as taking a little control back from the universe, when you can think, Okay, well, I can't control if I have cancer. What I can control is knowing my insurance coverage, knowing my work leave policies, thinking about how my kids will get to school if I had to be hospitalized for a period of time. You know, those are the kinds of things that you hope you never need them, but that kind of planning can be really reassuring in that moment because at least you feel ready, and there's something to be said for that.

[00:16:11] Jennifer Borget Yes, that makes sense to have something that you can do. I like how you called it “taking some control back from the universe” because sometimes we feel like, Okay, it's all out of our hands. There's nothing we can do. But like you mentioned, looking at the insurance benefits, you can take some steps to help manage that. That's a really good tip.

So, Kate, Hal Hershfield, a professor at UCLA, did some research with Northwestern Mutual and found that clients with a financial plan in both risk and wealth products said they feel almost 22 percent more optimistic about their financial futures than general consumers. When it comes to finances, having a plan really seems to help. Why is planning especially important when it comes to money?

[00:16:53] Dr. Kate Sweeney You know, I think that sort of tells us two things. One, having a plan and feeling like you've thought ahead, thought about all the contingencies and worked through them, is psychologically reassuring. But it also, of course, makes it much more likely that you are, in fact, ready when those problems occur. And so again, if you're in the position to make those plans, that is of course, financially a really important strategy.

[00:17:16] Jennifer Borget That phrase—hope for the best, plan for the worst—in the ways that you're describing some of these things, it sounds like it's not just a saying but an actual psychological strategy.

[00:17:27] Dr. Kate Sweeney Yeah, that's exactly right. I actually studied a long time ago with a collaborator. That kind of interplay between hope and expectations is bracing in the way that we think about it in my research. And really, what we have found is that you can do both in some ways: You can still hope that something good will happen. Again, think of something really small, like a student taking a midterm exam. They may keep hoping for that A while nevertheless kind of grappling with the reality that, yeah, maybe this isn't going to be their best outcome. They didn't really study like they should have. And so, that hope and that expectation or bracing for the worst can coexist. I think that in some ways, if you can pull it off, it's a delicate dance, but if you pull it off, it's in some ways the best-case scenario. You get to maintain the positive feelings that hope brings and, at least for some period of time, ride the high of Hey, maybe everything will work out great, but you're not letting yourself be completely caught off guard if things don't go well. And you're maybe, nevertheless, grappling with the reality of what's more likely to happen, again, while still maintaining that positive feeling of hope.

It can be hard. I think more often we probably vacillate really quickly, go back and forth between Maybe it'll be great ... oh, no, it probably won't. Maybe it will be great. Oh, no, it probably won't. That can be kind of tiring, I think. But if you can thread that needle, find that balance between hope and bracing, I think it's the best of both worlds.

[00:18:55] Jennifer Borget You've given us so many tips, but I'm wondering if you have one last piece of advice for listeners who are facing uncertainty right now.

[00:19:07] Dr. Kate Sweeney Yep, I can do my best to kind of synthesize, you know, all the things I've learned over all this research. I think there's a step-by-step process you can go through when you find yourself really beset by worry. You're not sleeping well, you're not focusing, you're not being productive at work because you're just worrying. What I think the best kind of strategy is to first ask yourself, Is there something I could do to actually change the outcome? So, if I'm worrying about my financial future, could I actually take some actions that would ensure a better financial future? That's a good thing to do. It can be hard, as we've talked about, to face that problem and to face uncertainty and to actually engage with it enough to take those actions. But if you're miserable, you may as well try that. Maybe it'll work. And so first check that box: Is there anything I could be doing to actually change my future? If you've run that down, there's nothing more you can do.

The next question: Is there any thing I can do to prepare? Maybe you can't change the future, but you can start to emotionally prepare, psychologically prepare. If you're worried you're going to get a diagnosis, maybe you check your insurance coverage. If you've run that whole checklist, too, and you've done everything you can, you're as ready as you can be, then you're really just in a worry management position.

So, then you are really going to be looking for those flow activities so you can just take your mind off the worry for a period of time. We've also studied mindfulness meditation. It's not for everyone, but if you are open to trying it, just sitting quietly, trying not to let your mind run away with thoughts of the future can be really helpful. If you've got a good hobby that you like that makes you feel good, go do that; spend time with your kids, play with your dog, whatever the thing is that makes you feel better in the moment. If you've kind of done all the other stuff, that's about the best option you have. And it might not work perfectly, but maybe you'll get a few little moments of relief from that worry.

[00:20:53] Jennifer Borget A big thank you to Dr. Sweeney for sharing her insight with us today. I love how she explained the idea that uncertainty is universal, but with the right tools, we don't have to feel powerless in it. Whether it's finding a flow activity, asking what's in your control or creating a plan, uncertainty doesn't have to be all-consuming. And when it comes to your finances, having a plan in place can be one of the best ways to take some of that stress off your plate. If you're ready to feel more optimistic about your financial future, visit Northwesternmutual.com/podcast. There you can download and print our readiness checklist to help ensure you've got what you need to meet with your advisor for the first time. Thanks so much for listening, and we'll see you next time.

[00:21:36] Segment: Hal E. Hershfield, Assessing the Value of a Holistic Advisor (2024). EY, How Life Insurers Can Provide Differentiated Retirement Benefits (2022). No investment strategy can guarantee a profit or protect against a loss. Northwestern Mutual is the marketing name for the Northwestern Mutual Life Insurance Company, NM, and its subsidiaries, including Northwestern Mutual Investment Services, LLC (NMIS) (Investment Brokerage Services), a registered investment adviser, broker-dealer, and member of FINRA and SIPC, and Northwestern Mutual Wealth Management Company® (NMWMC) (Investment Advisory Services), a federal savings bank. NM and its subsidiaries are in Milwaukee, WI.

Not all Northwestern Mutual representatives are advisors. Only representatives with advisor in their title or who otherwise disclose their status as an advisor of Northwestern Mutual Wealth Management Company and NMWMC are credentialed as NMWMC representatives to provide advisory services.

Kate Sweeney is not affiliated with Northwestern Mutual, and the views expressed by Kate Sweeney do not necessarily represent those of Northwestern Mutual or its subsidiaries.