HOW REDUCE ANXIETY WHEN IT COMES TO YOUR MONEY
Most of us would gladly jump at the opportunity to have more money. Very few people are likely to say that they would prefer to have less money…
One reason for this is that we can see how our future life and our current financial status are linked. And this leads to anxiety when thinking about financial futures.
Although it is not easy, it is beneficial to develop and maintain a positive outlook toward money to exercise greater responsibility for building our future financial stability.
In a recent email, Carl Richards shared some of the following ideas on creating a plan to continue reaching our financial goals by reducing anxiety.
Step 1: Pay attention to your spending:
Mastering our finances won’t happen overnight. We need to make a habit of keeping tabs on where our money goes. In short - we need to be more aware of our spending behaviours and habits.
Here are some of the best ideas on how to pay attention to spending:
- Create a budget and follow a spending plan
- Record all transactions
- Regularly check your card statements and stay present with what you’re buying
Step 2: Find wasted money:
Most of us are accustomed to the idea of saving money that remains after all the spending.
Hence, we find it challenging to find more money to save. Here the answer is not found in trying to make more money; instead, it’s to try and find money that we’re wasting.
We can find wasted cash by regularly reviewing credit card statements and cutting expenditure on things we don’t need anymore.
For example, if you’re being charged 250 bucks for a subscription fee on something you’re not using anymore (like a mobile data contract), cancel it and save that same amount every month.
In a year, you will have saved over two-and-a-half grand!
Step 3: Automate savings:
Setting up an investment vehicle and automating your savings can help establish the habit of saving.
Most of our banks will help you link a savings pocket to your transactional account into which you can drop a couple of bucks each month. (aside:your bills can also be automated so that you deal with less paperwork in your life and further reduce money anxiety!)
When building wealth, we need to retain a positive attitude.
Working with a professional financial adviser will enable you to make informed decisions and discern what other areas of your financial plan can be activated and engaged with in order to reduce financial anxiety and replace it with financial peace-of-mind!
SOURCE ARTICLE - From Carl Richards email campaign
Greetings, Carl here.
I’ve spent a lot of time traveling all over the world talking to people about money. During these conversations, one theme comes up again and again… Anxiety.
People are worried about their financial futures.
As we shift away from collective retirement solutions like government programs and company pensions, greater responsibility rests on each of us to create our own plan.
After having hundreds of conversations about this subject, I’ve come up with a strategy.
But first, a couple of disclaimers:
1- It’s hard.
Kind of like when your doctor tells you to eat more vegetables and exercise for at least an hour a day.
2- It’s boring.
I compare it to watching an oak tree grow. Think short-term boring, but long-term exciting.
...
For those of you I didn’t lose at hard and boring...
Allow me to present: Carl Richards’ Very Unexciting, Three-Step Plan to the Financial Life of Your Dreams!
Step 1: Pay attention to your spending.
Call it budgeting if you want, but I’m essentially talking about paying close attention as you spend money. This could be as simple as keeping an index card in your pocket and writing down every transaction, or purposefully reviewing your monthly credit card statement. Whatever your method, just start noticing how you’re spending money.
Step 2: Find wasted money.
The hard part of saving isn’t saving itself. The hard part is finding the money to save. Not long ago, I figured out a routine that helped. I printed out my credit card statements and went through each charge. On one statement, a few lines down on the second page, I found a charge for GoGo Internet Service. That’s the Internet service available while flying on many airlines. I recall the charge being $39 per month for unlimited access (now it’s $59 per month). After highlighting the charge, I leaned back in my chair, deep in thought. How long had it been since I last got online at 35,000 feet? In a moment of Zen-like clarity, I realized I hadn’t even been on a flight that month. I did the math and discovered it had been more than a year, 13 months to be more precise, since I had used this service. For 13 months, I’d been paying for something I wasn’t using. I’d wasted more than $500. It’s crazy I let it go on for that long, but I’m glad I found it!
Step 3: Automate savings.
If anything qualifies as exciting, perhaps it’s this: I just found $39 a month to start saving.
Because I was already spending that money, it wasn’t even going to hurt. All I had to do was log in (not at 35,000 feet) and set up an automatic investment for $39. Don’t get hung up on finding the best investment. That reeks of excitement, and we’re not into that. Just do something boring, like a Vanguard & P 500 fund, or send the $39 to your kid’s 529 accounts. The important part is automating the behavior. Just have the money pulled regularly from your checking account and put into whatever boring saving or investment vehicle you decide. No stamps, envelopes, or willpower required.
That’s it. Not very exciting but incredibly powerful. At the risk of making the plan sound fun, what if you decide to turn it into a game? You know…
like a treasure hunt!
Every month, pull out your credit card statements and carefully take notice of every charge, look for wasted money, and add it to your automated savings.
See how often you can move that number up.
See if you can start a streak and raise the amount each month, even if it’s just $5 or $10. I know it may sound boring to save $39, then $50, followed by $65 or even $67 (those two bucks matter). But over time, those dollars add up. How high can the number go?
Some friends of mine played this game. When they started, they had the goal of saving a million dollars. I remember thinking that goal was crazy. They would need to do something exciting, like find a hot IPO or invest in the best mutual fund ever to make that work.
Then, one day, I got a call. “Carl, we did it! We just crossed the million dollar
mark!”
Yes, it took 10-plus years of consistently doing boring things... but they reached their goal.
And all it took was repeating three boring steps religiously for over a decade.
Give it a shot yourself, and see how far you can go! What have you got to lose?
-Carl
