3 Powerful Ways To Decrease Your Financial Stress

By: Roshawn Watson

These days people are fraught with economic stress. The mere thought of aspiring to financial peace seems radical and even delusional for some people. Sixty-one percent of people live paycheck to paycheck, meaning it does not take much to push them to the brink of financial cataclysm. It certainly doesn’t have to be this way, but somehow we have been convinced to accept this foul bag of goods. Here are 3 powerful ways to decrease your financial stress.

1. Decrease Financial Stress By Knowing What You Really Value

What do you really value?

All too often we pursue and stress out about financial matters that don’t matter, at least not in meaningful way. That’s because they don’t reflect our true values. There is nothing wrong with wanting nice things, but things don’t define us.

In fact, if your contentment is based on materialism, then money is the least of your worries.

Focusing your resources on items, experiences, and relationships that compliment your core beliefs and values is infinitely more fulfilling than simply buying stuff. That could mean taking the trip of a lifetime over buying the dress or flat screen of the minute.

In your quest for great wealth, remember that there are many things that you may value that cost little to no money, such as a warm embrace from a loved one; a phone call from an old friend; kind smiles from your children, nieces, or nephews; attending a religious service or a motivational conference; playing with your puppy etc. Indeed, Thomas Stanley’s data suggest that millionaires are consistently more likely to participate in “cheap date” leisurely activities emphasizing relationship building and wealth building versus more “costly” activities. While I would never suggest that this is always the case, this correlation hardly appears incidental.

In short, by focusing our money on value-oriented spending rather than keeping up with the ~~Kardashians~~ Joneses, we decrease stress by relinquishing the constraints of materialism.

2. Decrease Financial Stress By Stopping The Insanity

Recognize that when someone gives you a loan, he or she is NOT doing you a favor.

We must break the self-defeating cycle of consumer debt in our lives. Borrowing one’s way out of trouble is extraordinarily difficult. People can go on about “good” debt and “bad” debt. After all, labeling debt to make it more palatable is quite common.

My primary concern with debt, particularly consumer debt, is that with it comes risks that typically nullify any leverage advantage received by using the debt in the first place.

Earlier this week, I read about someone thinking that getting a $500,000 loan to purchase 8 rental properties with nonexistent cash flow was a good idea because he was “getting over on the banks through the power of leverage.” With the numbers he shared, he would be a bankruptcy waiting to happen. Remember, a plan that only works if everything goes right is hardly plan at all.

Without belabouring this point, let’s keep it simple:

Debt equals risks.
Risks cause stress.
No debt equals decreased financial stress!

A major shift happens when we stop trying to use debt to solve our problems. The choice is yours, but when I made the decision to live debt free, my financial life instantly simplified and my stress decreased precipitously.

3. Decrease Financial Stress By Rethinking Budgeting

Budgeting is NOT the enemy.

Personally, I used to think of budgeting as limiting, but I now see it as liberating. That’s because budgeting enhances economic productivity, which is something we can all used more of. Regardless of whether one makes $40,000 or $400,000, he can still be broke if his money is mismanaged. This is ignored by those who only focus on the income side of the equation. Perhaps this is the reason most millionaires budget. Budgeting is the tool that helps you reign in your income.

However, I can certainly appreciate that some people find budgeting stressful. Dealing with money can be inherently unpleasant. The very act of budgeting forces acknowledgement of money’s limitations and possibly confrontation of misbehavior. Additionally, despite the fact that we deal with money on a daily basis, there is a lack of personal finance education. Some of the very courses that supposedly aim to increase our financial intelligence are little more than cleverly packaged marketing tools for companies that are far more concerned about their profit margins than serving us well.

Given those facts, it is unsurprising that many find proper money management particularly difficult. If you fall into that category, then perhaps it’s time to rethink budgeting. See it as a mechanism for your freedom, and use it to your advantage. Here are some tips to help you do just that:

Pay yourself first. Even if you simply create an artificial sense of economic scarcity by “paying yourself first” and using the remaining money to cover all other expenses, that would be a great improvement over ignoring budgeting altogether. At least this way, your savings and investing would be taken care of.
Use technology to assist you. Consider employing tools to make it easier, such as using automatic drafts into your savings and brokerage accounts and using the "envelope system" for groceries.
Eradicate the idea of a “perfect” budget. Let your budget change as your life changes. Perhaps you are not yet in a position to allocate funds to every single line item. That’s perfectly okay. Few are.
Note, a more detailed discussion on the power of budgeting is available in my FREE eBook.

I think the old adage of “don’t throw the baby out with the bath water” is particularly relevant with respect to budgeting. Embrace a system that works for your household and use it prudently.

Closing Thoughts

Financial peace are two words that typically do not go together. That doesn’t mean that it’s unachievable. When your purchases are aligned with your values rather than the values of clever marketers, when you free yourself from the madness of robbing tomorrow’s prosperity for today’s pleasures, and when you develop and live by a sound spending plan that works for your household, you are taking ground financially. You are on the road to prosperity. You are reclaiming your financial peace!

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