In case you were wondering, stress is not good for your body at all.
Neither are lacking finances.
So imagine the result of those two put together. Suffice to say, you need to overcome your financial stress as soon as possible, otherwise, it will consume you whole.
I think that many of us at least faced the problem once in a while.
It doesn’t matter how rich or poor you are, but rather your ability or inability to afford something that you want or need.
Even a multi-millionaire may feel stressed that he can’t add another vastly overpriced car to his 50+ car collection.
On the other hand, a middle-class citizen may find himself not being able to pay the bills for the month, be it from his poor financial management or otherwise, I wouldn’t know.
This isn’t about solving you financial problem
That it is to say, I am not your money manager.
Sure, I do know a thing or two about finances (and I will briefly review some of that stuff), but that isn’t really the point here.
While the average person might struggle with things like paying rent or cover mortgage, the poor will struggle with putting something in their mouth, forget to live in an actual house!
This applies to rich people as well, in no way to a lesser degree.
I can already hear you doubting me, so here’s my proof right here.
Most people “worry” about money, even those who are rich (that is to say, with a high net-worth).
Money management isn’t really the problem here, either.
Rich people didn’t become rich by randomly throwing around hundreds of thousands of dollars, even though they can afford that kind of expense.
Financial awareness Is a burden to carry.
You can be the most well-balanced, well-managing, coin-counting financial geek as still suffer from stress over your money.
Ever heard the phrase “ignorance is bliss?”
It’s a half-truth in this case – the more aware are you, the more each and every decision matters.
Say you are fully aware of the consequences of an imbalanced lifestyle and go through all the trouble of organizing your meals, exercising properly, wearing the right shoes, having great posture and all of those little health and nutrition nuances.
Then you give up on snacks, you adapt to certain conditions that put some very obvious stress on your body and mind and the routine becomes mind numbing and outright torturous to you.
Then you have to manage every single detail of a healthy lifestyle, making every single living moment of your life a constant test for perfect health.
The next step would be to go to the mountains and become a monk.
In the case of financial awareness, this is very much so.
Every expense, every little detail, they all seem so very important to you.
While the average person may go all like “Meh, it’s just 20$”, the financial geek will weep and cry if he didn’t “invest” this cash into a long-term investment (for financial purposes or otherwise)
The idea is to maximize the value of every dollar, and that constant chase and penny pinching that some people subject themselves to are killing them from the inside.
Financial ignorance isn’t much better, either
On the other hand, spending your money וnwisely may lead to you having none in the end.
If you don’t overview your spendings to some degree you will find yourself unable to spend any more.
If you don’t deny you “here and now” pleasures then you will find yourself, very soon, mind you, being unable to have any more pleasures for a very long time.
While penny-pinching will lead you to unhappiness through denial of anything but bare necessities, spending your cash randomly on useless products will ultimately be just as bad, if not more so.
So neither is the answer – what is?
Money is a tool for freedom, and it goes both ways.
You pay for money with your free time, and your money buys you free time.
This rule may apply to some more than others, but we have to work (as in, pay with free time), in order to get paid cash.
Sure, there are people that this rule doesn’t apply to, but they are a vast minority when it really comes down to it.
And then, when you do get paid, you use that money to secure your freedom – from the bank, from your bills and so on.
Your money, in essence, is a tool of freedom.
The more you have the freer you are.
Those with little cash have no options but to work as hard as they can in their job, doing lots of extra hours and having little “freedom” to act upon.
Rich people are that much freer.
Sure, they might work a lot, but they do so willingly. Research shows that rich people (on average) raise expectations alongside their overall wealth, something which leaves their level of happiness unchanged.
This tendency is known as a hedonic treadmill.
Case in point, they can just as easily sell everything that they own, live on modestly, and do nothing for the rest of their lives.
So that’s a lot of data, but it doesn’t tell you how to overcome your financial stress.
To some of you, this entire explanation may seem vastly unneeded.
But in order to be able to solve the problem you need to learn what causes it in the first place.
So now that you do know, what can you do to make it better?
Well, here are a few ideas
1)Balance out your finances
We already agreed that the source of your stress is your relative lack of money and means to provide yourself with security and some pleasures.
Thus, the simple way to do so would be to balance out your finances.
It’s a very simple process actually, all you have to do is to earn more than you spend and you are pretty much golden.
Investing your savings may prove itself pretty valuable in the long run, but that’s not the point here.
If you make 10,000$ a month and spend 10,001$, then your financial situation is terrible.
If you make 2,000$ and spend 1,500$, then you are pretty much golden.
All you have to do is to manage your money in a way that fits this sort of balance and you will be fine in the long run.
Tactics VS Strategies
Another tip I could offer you is to not make “tactics”, that is to say, changes to win a certain “battle”, but rather strategies, a way for you to overcome the “war” of your financial situation.
Taking shorter showers or skipping on buying coffee every morning are a few examples that aren’t going to do anything in the long run.
Making a budget, using public transportation (or heck, selling your car, if the situation is bad enough), or renting a cheaper apartment are a few long-term examples.
Sure, you may get into a tight spot saving a lot of money and giving up on things that you were used to, but living below your means is one very useful way to improve your situation.
As I said before, making more money isn’t going to make you any happier, but you do need certain guidelines to stick to.
One book I would recommend would be The Simple Path to Wealth by J L Collins, and he does have a free series about investing to review, these would be a useful read to you as well.
Now, there are a bunch of tactics to apply when it comes to finances, but none of them are ultimately going to make you any happier in the long run, so alongside these changes to your lifestyle you do need to adopt a new outlook on money, something which leads us to…
2) Disconnect your feelings from your cash
A lot of people seem to be making this mistake for some reason.
People believe that there is a direct relation between money and value, much like the fact that many rich people don’t seem to be all that satisfied with their cash (the hedonic treadmill, yeah?)
A friend of my father is an executive in some big shot company who had a very good year in 2016.
He closed lots of deals and made an all time high year in terms of income, as well as it being one of the most successful years in the company’s history.
So when they all brought out the champagne to celebrate, on of his fellow executives called out “Next year we are going to double this income!”
He just had his best year, and it didn’t come easily to him either.
Doubling his income would result in even more work, with this chance around money bringing him no actual worth (that is to say, it’s not making him any happier).
Quite frankly, making all of this money isn’t really changing anything.
So why bother? The guy makes at least 10 times as much as the average person, so why does he keep making more and more money?
It’s his sense of worth.
Money is often times viewed as a mark of status, success, and worth – people relate all of those things directly to the amount of money that they make.
In a discussion between Warren Buffet, Bill Gates and an audience, a question came up – how much money do you carry? Buffet replied with a resounding 500$ (but only because it was poker night) and Bill Gates had 40$ on him.
To put it simply, two of the richest people in the world don’t carry cash on them, like most of us do, they don’t need that kind of validation (however subconsciously we are doing it).
Their money means nothing to their overall sense of worth.
It works both ways, with people who are less financially successful being looked down by others due to their current situation.
Not only that, but they may very well end up looking down on themselves as well.
Your money doesn’t define you as a person, and your stress over money is, at least partially, due to its value to you.
When push comes to shove, you will have to ask yourself whether or not your money is worth your lack of free time, in terms of pure value.
Sure, your money may seem valuable because it can pay your bills, but using your income (or maybe lack thereof) to validate yourself and build confidence (and happiness) is a terrible mistake.
3) Don’t be so materialistic, it works against you
“To be content with little is difficult; to be content with much, impossible.” ― Marie von Ebner-Eschenbach, Aphorisms
Alright, so we discussed how money is a tool for validation, a measure of self-worth, to some people, and how it really shouldn’t be.
But there is a much more clear-cut reason for that.
We already talked about money as a symbol of status, but people can’t really see cash whenever they look at the person.
I mean, have a look at Mark Zuckerberg over here, you couldn’t tell from the way he looks that he is one of the richest people on the face of the planet, yeah?
Back when I was in school we had this Arab janitor named Shadi.
He was doing maintenance work and the like, he also owned a 120,000$ Mercedes-Benz.
Not something which he should be able to afford, right? Yet he did, he took a rather forceful loan and bought it, despite the fact that this type of car was well out of his reach and lost about half its value the moment he drove it away.
Don’t buy for pleasure, at least not as much
In psychology, there’s this entire concept called “retail therapy”.
Retail therapy is apparently quite effective, studies seem to largely conclude so.
This means that simply having money isn’t good enough, and this fact becomes actually worse (if that was possible) due to the fact that we actually enjoy buying stuff, to the point where it can potentially treat mental illnesses and be considered a legitimate type of therapy.
Now, this is great and all, but that is a terrible habit nonetheless.
Money is a tool for freedom, and if you are buying these short-term pleasures you are further sacrificing your freedom, it’s this very cycle that creates social stress.
Not only do you become dependent on these purchases, but you also validate them as necessities, even if they are a plain waste of money and nothing more.
Sure, having a new set of jewelry is pretty neat, but is it worth a whole month worth of salary? Probably not, there are bills to be paid and saving to be stashed, after all.
The only way to overcome your financial stress is to push through
Work on your habits and mindset, spend less than you earn and you will be fine, even if it might take some time to recover.
So here’s a question for you – what is one thing that you are spending money on, even if you really shouldn’t?
Be sure to write down your answer in the comment section below, I read every single one of them!
If you would like to contact me personally then please send me an email.