1. How Does Money Cause Stress?
There is a lot more to managing
your money than getting the bills paid with a little left over or
maintaining a productive portfolio. We have all kinds of hidden and
not-so-hidden feelings about money, emotional blocks, obsessions, and
pretty strange ideas. The phrase “It’s only money” might be something
you say sometimes, perhaps to justify an extravagant expense or to make
yourself feel better when you don’t have any of it, but very few of us
really believe that the green stuff is “only” anything. Money is
important to us. It is important to our culture. Some might even say it
rules the world. But it shouldn’t rule you.
“Some might say money rules the world. But it shouldn’t rule you.”
2. Take a Look at Your Past
In The 9 Steps to Financial Freedom, certified
financial planner and investment advisor Suze Orman lists “Seeing How
Your Past Holds the Key to Your Financial Future” as step number one.
Money memories from childhood can reveal how we feel about money right
now, even if we don’t realize it. Maybe money was highly valued in your
family, or not valued much at all. Maybe you were taught to manage it,
but many of us weren’t given those skills and, as adults, don’t have the
slightest clue what to do with the money we earn beyond paying the
bills and buying the groceries.
3. Don’t Buy into the Stereotypes
Added to our personal experiences are
cultural stereotypes galore. Television shows, movies, and books often
represent rich people as heartless snobs, poor people as slovenly
thieves. Old misers who hoard their riches must be a little crazy.
Generous souls who give all their money away must be angelic.
In America, the “middle
class” has been consistently held up as the ideal and has grown to be
such a broad category that most people now consider themselves to be
part of it. Most of us aren’t in poverty, but wouldn’t call ourselves
rich, either. And isn’t that what makes us comfortable? Yet, we remain
obsessed with money . . . with wealth, with the fear of poverty, with
the material objects it can buy.
4. De-Stress Your Financial Life
Money is no simple matter. But that
doesn’t mean it has to be complicated for you. To de-stress your
financial life, you need to do several things:
• Understand exactly how you really feel about money, including your prejudices and preconceptions.
• Continue to recognize with vigilance your financial preconceptions so that they don’t control you.
• Have very specific financial goals, for both present and future.
• Have a very specific plan to meet your financial goals.
• Know exactly how much is coming in and how much is going out.
• Start by building a financial cushion.
5. Ask Yourself Some Questions
To get you thinking about how you really feel about money, answer the following questions on a sheet of paper or in your stress journal.
1. How do you feel, emotionally, when you think about your financial situation right now?
2. Examine any negative feelings about your financial situation. Why do you think you have these negative feelings?
3. How do your parents feel about money?
4. When you were a child, what was your family’s attitude toward people who had more money than you did?
5. When you were a child, what was your family’s attitude toward people who had less money than you did?
6. Describe an incident from your childhood that revealed your family’s attitude about money.
7. Describe a specific book,
movie, television show, or other source that you think could possibly
have affected your feelings about money in some way.
8. If you had all the money you
could possibly ever spend and you knew you would continue to be wealthy
for the rest of your life, how would it make you feel?
9. List the things in life that you honestly believe are more important than money.
10. What, specifically, has to change in your life so that money no longer causes you stress?
6. Recognize Your Financial Preconceptions
Look back at your answers for
clues to some of your financial preconceptions. Keep those in mind as
you work on simplifying your financial life. If you have the
preconception that there is something wrong with having money, you may
have been subconsciously keeping yourself from financial security. Maybe
you strongly believe that money shouldn’t be important, but the lack of
it in your life is controlling you, and now, in its absence, money has
become the most important thing in your life. Maybe you believe that
self-worth is related to financial worth and you feel like, apart from
money, you aren’t worth much. Whatever you believe, know that you
believe it, and continue to question your preconceptions so that they
don’t sabotage your financial life.
7. Make Specific Financial Goals
If you know where you are headed
financially, your life will be less stressful. Make a list of your
financial goals, no matter how impossible they seem, either on your own
or with the help of a good financial planner.
How much money do you need
to be able to spend each month? (Most people underestimate this
number.) How much do you want to have saved by retirement? Do you need
college funds for the kids? A down payment for a house? Would you like
to be able to have extra money for investing? How much do you need in
savings to cover your expenses for six months if you should become
unable to work?
8. Have a Plan
It isn’t enough just to have goals.
You also have to have a workable plan to meet them. If this seems
overwhelming to you, get help from a good financial planner.
Part of meeting your
financial goals might be focused on how to live on less rather than how
to make more. Simplicity, frugal living, and other downscaling trends
have been popular in the last decade as people realize they’ve been
making lots of money and not getting much in return in the way of
spiritual rewards. Books, websites, newsletters, and other sources are
rich with information on this trend.