Money stress… at some point in time everybody will have experienced it. In fact, if you believe the media headlines, more people are suffering money stress than are not.
With financial markets across the globe delicately poised, I thought it would be a good time to look at how you can manage or avoid money stress.
This week I have been working on material for my new product that is coming to you very soon. In preparing for the launch I have been reflecting on my journey…
It got me thinking about those times when I would be driving home from work, working myself up into a frenzy of money stress. How was I going to pay the bills this week, or next week if I managed to get through this week?
Have you had this experience, or are you having it now?
It was a difficult time, not knowing how I was going to spread the relatively small amount of money I was making across all the bills without running out.
On top of the bills there were the external factors, such as political changes that could impact my work and therefore ability to earn a living. As I look back on these times it is clear that I was doing a lot of worrying…
Money stress was a THING, and it was eating me up.
The process of stressing about money, or anything for that matter, will not change the circumstances. The only thing that will change your circumstances is actions, your actions.
If you are experiencing money stress, the first thing I can say is, you are not alone…
So what can you do to manage money stress?
7 Tips to Deal with Money Stress
Over the years I have discovered different ways to manage money and therefore avoid money stress.
The list that follows is not intended to be exhaustive, instead it is a list of 7 tips that I have found useful. You can choose to apply them all to your circumstances, or just pick a few that resonate with you.
Have a plan
I found myself in a conversation about Boy Scouts this week, so I’m borrowing their motto for this tip. The Boy Scout Moto is “Be Prepared”.
It is important to have a plan for your money with some basic contingencies based on certain circumstances.
For example, you might have a plan that says ‘if the stock market falls by 20%, I will….’. Now this might be that you will exit the market (not my recommendation), stop adding to your portfolio for a period of time, or look at some form of insurance, like put options.
The key is to have a plan, so you know what you will do in certain circumstances. This also has the added benefit of taking emotion out of the decision process, and that’s a big deal when it comes to money stress.
Automate your money flows
First establish a plan for your money and then automate the transfers to ensure your money is where it needs to be when you need it.
The benefits of automation also ensure that you are putting money away for your future self.
Effectively automation can guarantee your success, without having to develop will power, which we now know doesn’t work.
If you want to know how to set up your money plan and automate the process, make sure you access my 5 Steps to Financial Freedom course.
Monitor your accounts less frequently
How can I suggest monitoring your accounts less frequently when I am trying to overcome money stress?
Looking at them more often is not going to change them, or your circumstances.
If you have stock accounts, refrain from looking at them any more than monthly. Markets go up and down every day, it’s how they attract interest. But you’re a long term player and so the daily movements mean nothing to you.
One of the good things about property investments is that you can’t look up their value every day. They are truly set and forget. Which means less stress….
Have contingencies covered
You know about the need to have an emergency buffer for those unexpected moments that life presents.
To manage your money stress, make certain that your money plan includes possible contingencies.
We can never know every circumstance that can happen to us, but we can anticipate some. Having contingencies in place will make a big difference to your money stress levels.
For example, have some insurances in place to cover certain scenarios, like losing your job (income protection), getting sick or injured (trauma) and life insurance for the worst scenario for your family members.
Change your focus
What you focus on expands. So if you focus on money stress, guess what, you are going to get more money stress. This applies to anything in life. Any focus, whether good or bad, results in more of what you focus on. Think about that for a minute…
If you find yourself in a money stress scenario, change your focus. Simple, right?
In my circumstance from earlier, I could simply change the music in my car while driving. The act of thinking about what to listen to instantly changes my focus. Problem solved!
Remember it is not about the money
This is one of the more difficult tips to embrace when you are experiencing moments of money stress…
Take your focus off the money, and direct it to the process, and let the power of time and compounding take care of the rest.
Sure it is ok to have those thoughts and dreams where you are rolling in cash, but once you snap out of it, realise that focussing on the money will only derail your success. In fact, focussing on the money will only make the stress part worse.
Have an accountability buddy
This tip is often dismissed as either not necessary or too confronting.
Having someone that you share your plans with and then ask them to keep you accountable, might to some add to the money stress scenario…
But, if you use your accountability buddy correctly, they can be an amazing sounding board to help you overcome any situation you face. It’s not about getting their approval or proving to them that you are some genius with money…
It is about sharing what is concerning you at the time and having them help you through the process of resolving the issue. They don’t even need to know all the details, just having them to talk to will do the trick.
So there are my 7 tips for overcoming money stress. Let me know if any of these work for you, or if you have any other ideas. Let’s get the conversation started…