When it comes to personal finances, the majority of Americans are feeling spread thin – like an over-inflated balloon ready to pop.
The American Psychological Association has found in various surveys over the last two years that about 70% of Americans feel stressed about money.
That’s most people – 7 out of 10 to be precise.
Not surprisingly, this aligns almost exactly with the percentage of working Americans that live paycheck to paycheck.
That means that of your 20 co-workers, 14 of them are feeling an emotional or even physical impact from money stress while they sit in your morning meetings.
Statistically, most of your immediate family is stressed about making ends-meet.
700 out of the 1000 cars you pass in your short work-commute contain folks that are potentially distracted by their staggering debt-loads, unmanageable expenses, harassment from collection agencies, bankruptcy, or general fights about money with their loved ones.
Instead of perpetuating the situation, how do we flip the script on money stress? Here are four methods to relieve the pressure caused by money misuse:
Avoid adopting or settling for a ‘victim mentality.’ It is easy to blame the economy, our circumstances, or others on our stressful financial situation, but none of those things help to solve the issue at hand. Take a step back, take a deep breath, seek knowledgeable counsel, and look in the mirror. Ask yourself how much of the situation is a result of your own behavior, identify what actions you can actually control going forward, and own those areas. Then recognize things you can’t control, and let go in those areas. The Serenity Prayer by Reinhold Niebuhr can be a useful, quick way to re-focus our minds and hearts when we being to feel the uncontrollable taking control:
God grant me the serenity
to accept the things I cannot change;
courage to change the things I can;
and wisdom to know the difference
As soon as we ‘face the demons’ that are causing our stress, we can begin the process of proactively and systematically defeating them.
Destroy & Avoid Debt
In a recent study conducted by Facebook IQ on millennials and money, 45% of participants defined financial success as ‘being debt free.’ It’s no secret that debt is one of the single largest stressors in the American consumer culture, and that we were not designed to shoulder the chronic and pervasive stress that comes with carrying debt. Benjamin Franklin said it best when he said “rather go to bed without dinner than to rise in debt.” Create a written debt-elimination plan that focuses your budget on dumping debt while simultaneously following the next method. Use popular methods like the debt snowball as part of your plan. Once you’re out of debt, you can work your plan to include a focus on saving so that you don’t end up in the same painful position again.
Change Your Level of Thinking
You must right the ship by approaching the situation from a fresh perspective. Albert Einstein said “we cannot solve our problems with the same level of thinking that created them.” If you’re in a real bind, the first step is to stop using debt (see above), and re-build your budget from the ground up, covering necessities first (food, shelter, clothing, transportation), then going from there. Easy to say – hard to do. If you’re living paycheck to paycheck, look at your budget and identify areas that you can cut to minimize expenses while you create distance between yourself and your financial stressors. Making more money can always help, but it won’t really solve the problem and lower stress if you don’t fundamentally examine the root of the problems that got you here in the first place. Take steps to acknowledge your assumed constraints, and understand that because they are assumed – they can be broken.
Set SMART goals in each area of your finances. SMART stands for Specific, Measurable, Attainable, Relevant, and Time-Bound. Write your goals down. You are 42% more likely to achieve your goals by simply writing them down (Dr. Gail Matthews – Dominican University California). If we begin with the end in mind, then we can break large, stressful tasks down into manageable daily activities. Make goals for paying off debt, saving, investing, giving, and spending (budget). As you create your goals, always remember ‘WHY’ you are working toward them in the first place – to feel a peace and freedom that can come with having your financial house in order.
Take a step back.
Take a deep breath.