This is the first of a two-part series, examining seven ways to worry less about money. Living in San Francisco and being a CERTIFIED FINANCIAL PLANNER™, it amazes me to hear how often money is a topic of conversation. If you spend any time in the city before long, you'll listen to some form of money talk. Go to a coffee shop or restaurant, and people will be discussing money. Talk to your work colleagues, and it's often about money. It's a common topic among friends, neighbors, and even passing strangers. By no means do I think San Franciscans are alone in this regard. Money plays such a central role in all of our lives that people can't help but talk and worry about it. It's one of the most common sources of worry through all socioeconomic groups. Read on if you're interested to learn more about how you can worry less about money in your day-to-day life.
Money: The Universal Worry
If you're like most people, you worry about money. Millions of people, young, old, and everybody in between spend countless hours fretting over the state of their finances. Worrying about money is consistently ranked as the number one source of stress in America. Modern American life is expensive. No matter where you live, what your salary is, or how many assets you own. Keeping up with life's expenses, while also saving and planning for the future, can feel downright overwhelming.
There's no magic bullet to stop worrying about money. Most people would say if they simply had more money, this would ease their financial burdens. As a whole, this is and isn't true. With more money comes more problems. No doubt, having more wealth will alleviate some of your day-to-day financial worrying, but only up to a point. Our minds are programmed to be worrying machines. When one worry subsides, we find another to take its place.
Avoid Telling Yourself Stories About Everyday Money Experiences
The mind is a worry machine. As a natural process, we ascribe meaning to ordinary sensory experiences using predetermined internal assumptions. These assumptions lead to all kinds of projections and internal narratives. Additionally, the mind's assumptions tend to be negative, as human beings generally have a bias towards negativity. For example, we might meet a new person and say to ourselves, "He didn't smile at me. He doesn't like me." This is actually a visual experience, but the reasoning we apply is a mental one. The truth is the individual may not have smiled at you because they're having a bad day, they're tired, they may be in pain, or something could be troubling them that has nothing to do with you.
This subtle mental mechanism creates an emotional roller coaster in our financial lives. An unforeseen expense crops up. We tell ourselves this is the beginning of going broke. If we have a financial windfall, our mind instantly jumps to planning all the things we need to do with the money. We barely have time to enjoy the moment before the mind figures out ways to spend it, or worse, it focuses on the negative aspects of what the money will bring like taxes and hard choices about paying debts, investing, and planning for the future.
When it comes to investing, false assumptions can lead to disastrous mistakes. We buy when the markets are high, telling ourselves it has to go higher. The last thing we want to do is miss out on the party. We sell when the markets go down, because the whole world's collapsing, and if we don't, we'll lose all our money. We double down on losing investments, thinking there's no way it can go down further. Human investors apply all kinds of irrational thinking to investing based on faulty mental stories. Avoiding these psychological biases is one of the main reasons why smart people hire objective financial advisors to help them manage their financial life.
How do you counter mental reactivity and worry about money? The answer is deceptively simple. But simple doesn't mean it's easy. Next time you have a money situation that leads to worrying, listen and observe the assumptions behind the narrative in your mind. Notice how the mind likes to jump to conclusions without real evidence. If these thoughts are not based on objective reality, but instead are being fueled by internal assumptions, feelings, or unproven hunches, stop. Pause and ask if it's possible your mind is spinning a false narrative. If the answer is yes, find a way to examine the issue using reason and evidence. By testing the quality of your thoughts, you're applying a simple mental speed bump to your thinking. Consistently applying this mental check will go a long way to lessening your everyday worries about money.
Let Go Of Greed
Greed breeds worry and worry breeds fear. When greed ceases to exist, worry and fear disappear. This is an ancient law. Greed is an intense and selfish desire for something, especially wealth, power, or food. Greed is the excess of wanting; it's the obsessing of abundance. Greedy thoughts and greedy actions have a selfish malice quality, one which disregards the needs of others while overemphasizing sensory satisfaction. There is a difference between stewarding your finances so they serve you as you work to build a prosperous life, and craving wealth and money for the sheer power provides.
Greed exists in every human heart at one time or another. To let go of greed, and the worry it produces, we must first become aware of greedy thoughts. When you find yourself obsessing over anything, most notably money, take a minute to observe the nature of these thoughts. Identify their quality and intensity, rest with them a while, and see if you can untangle the emotions and motivations driving them.
The very act of observing your thoughts lessens their hold on the mind and frees up energy to let go of fear and worry. Eckhart Tolle, the author of the best selling book "The Power of Now: A Guide to Spiritual Enlightenment" said it best, "Be the silent watcher of your thoughts and behavior. You are beneath the thinker. You are the stillness beneath the mental noise.”
Purse A Goal and Enjoy Achieving It
To worry less about money, set a worthwhile goal, and enjoy working to achieve it. Worthwhile goals are as unique as the person who conceives them. They don't necessarily need to be financial. For example, a worthy goal may be raising a family, being a good neighbor, spouse, and member of your community. Money is a part of this goal, but not the primary driver. Worthy goals should rely on your own potential and should ideally bring about benefit to yourself and others. Achieving material success can also be a worthy goal, so long as this success is accomplished through just means, and its pursuit brings joy to your heart. Once you've set a worthy goal, money becomes a servant to this achievement and not an end to itself. In this way, worrying about your finances becomes subservient to a more grander vision of your life.
Being A Financial Planner and The Role Of Worry
One of the things I love best about being a financial planner is I get to help people reduce their stress and worry around money. I feel like, in some small way, this helps bring more peace to the world, one client at a time. For when we worry less, the world feels brighter, and where there was once fear, we now feel hope. With money playing such an influential role in our lives, finding novel ways to worry less about your finances, will add joy to your life, and pay emotional dividends for years to come.
If you find yourself wondering if you're on track with your finances, or if you'd like to learn more about how financial planning can help you, I'd love to hear from you. Feel free to reach out using this simple contact form.