As if we don't have enough on our plates these days...Keeping Facebook and Instagram feeds up to date, cosmetically enhancing our appearance in a constant drive for acceptance among our peers, sitting around waiting for the next iPhone release...Gosh, so many thing to do, so little time. Who has time for good financial practices when all that more important stuff needs doing. [Sarcasm, in case you didn't know.]
We live in interesting times, pressurised times, and one thing is common to us all...Money - The pursuit of it, the collection of it, holding it, building it, spending it...Getting stressed over it.
Financial stress can be crippling. I read an article that suggested some 35% of people who experience financial stress have turned to drugs or alcohol to manage their negative position around money and financial matters; It's common knowledge that long-term stress, chronic stress, can lead to many negative physical issues and also that dependence on drugs or alcohol can be destructive.
But what is financial stress anyway?
Mental and emotional strain or tension deriving from a demanding circumstance or adverse situation is how many would describe stress itself. Financial stress is simply circumstances that centre around money. Stress through housing payments, vehicle or other chattels lending, paying household and other bills and credit card debt are the main offenders however there's many others including negative financial positions around gambling and drug or alcohol dependence.
Financial stress can cause people to become withdrawn, surly and depressed and also to strike out at those closest to them; Family and friends. This type of behaviour often spirals out of control bringing other issues with family or friendship groups and in the work place too.
It's probably not surprising that many who suffer financial stress seek to shift blame to others: Partners and children, or some other such convenient scapegoat they can locate to pin it on. This can lead to arguments over money or financial matters and through miscommunication these arguments can have broader implications for all concerned. Again, they spiral out of control. Have yoiu ever seen anything spiral into control? No, me either.
It's not easy to talk about money with partners or loved ones is it? Add to that mix financial stress and pressure and what could be a simple conversation can turn into something quite different. The blame game comes to mind.
I'm happy to say that my wife and I don't suffer this problem and have open conversations around money all the time. We don't always agree of course, however we always seem to find logical and responsible solutions to our financial challenges which carry us forward as a unit, confidently and with less stress. It's still there, but we work hard to minimise it. src
Here's a few tips I have come across over the years, some I use and others not, but all reasonable options to help a person or family manage their financial position, and therefore, stress.
Reduce financial stress
- Agree to discuss purchases from joint accounts. This single rule is one which not only prevents impulse or ego buying, but opens a line of communication around money, intelligent and effective decision-making and builds trust.
- Set free spending limits for partners and family members. Basic household budgeting really. Make sure you can support the spending though.
- Set a budget. We have a spreadsheet that includes incoming and outgoing money for almost everything in our lives. It auto-sums and calculates so changing one figure, income for instance, spits out revised figures right through the spreadsheet. It's not fool proof, but having that guide allows us to better track our money, and to remind us where we need to be at any given point. We revise it every three or four months as different times of the year have different financial needs.
- The budget as mentioned above also has the benefit of removing the need to constantly think about money and spending habits. A great deal of anxiety can be avoided by getting all of those deliberations and thoughts out of your head. Writing them down can help too, but don't forget to have an action plan.
- Set up direct debits for bills and pay them monthly or quarterly. This has many benefits as it removes the stress of having to constantly remember when to pay which bill, keeps more money in your account for longer through periodic payments and can remove those PAY NOW letters you may be getting currently - Which can raise your stress levels.
- Avoid ego spending - Spending to keep up with the neighbour down the street. This is a path to destruction. Attaching material things to your feeling of self-worth or value is also a fools errand. Consider applying a need over want ethos and even make a game of it. See how long you can go without purchasing non-essential items, maybe make it a competition with your partner. You may be pleasantly surprised with the result.
- Understand that your financial problem can be fixed [Usually]. Seeing that you have a problem is the first step but knowing that it can be turned around will offer you some light at the end of the bleak and dark tunnel you may consider yourself inside.
- Seek professional help for your financial woes. A professional can show you how to consolidate debt, limit spending and set up a system to get you on track. It's not embarrassing to put your hand up and say, "I need help here." It can be more embarrassing to have your car repossessed, your house foreclosed on and be forced into a yard sale of your stuff just to gather a few funds to put food on the table. Extreme case? Maybe, but probably more common than you might think.
- Limit takeaway food purchases. There's a thing called cooking and, believe it or not, this cooking can take place at home. It's cheaper, probably more nutritious and could be a good opportunity to gather the family for a meal and chat; Good quality time...Remember that?
- Say no to the kids sometimes. Nope, you can't have that game. Nah, you can't get a 17th pair of runners because they come in fluorescent yellow now. No, you don't need a new phone.
- Say no to yourself once in a while. It won't kill you.
These are just a few ways that financial stress can be eliminated. Dealing with it doesn't mean having to make more money - After all that's not always possible is it? It doesn't always mean going without everything either...Just some things. There's literally hundreds of ways to positively impact a negative financial position and whilst not every one of them are appropriate for all of us, a little effort, ownership and responsibility can solve many issues. Sticking one's head in the sand or heading down to the mall for some more comfort spending is not really much of a solution though.
Dealing with financial stress, reducing it, means making changes that may not always feel comfortable however the alternatives are not just uncomfortable but can be downright destructive. Do my wife and I always get this right? Nope, not always. We learned early on in life that arguing about money doesn't change the situation though...Changing the situation changes the situation. Doesn't your sanity deserve it?
I wrote this today after meeting with a client who is in a poor financial situation and will have assets seized. It's not nice when it happens, not for the the person suffering the repossession or indeed the person doing the repossession. I feel sorry for the family however, at the same time, they are a classic example of living beyond their means and spending to present a certain way outwardly. I hope this teaches them something for the future.
Design and create your ideal life, don't live it by default
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Note: This is not financial advice and the concepts mentioned in this post may not suit your situation. Do your own research prior to making changes to your financial plan and do not rely on the information contained within.