The words
‘money’ and ‘worries’ go together so often they can seem inseparable. For many
people, their relationship with money is fraught with anxiety. In Sheconomics
we talk about ‘Money Anxiety Disorder’ (MAD) – a fixation with money worries
and a persistent sensation of simply not having enough. I also come across
something I call ‘net worth anxiety’ – where people assess themselves at a
certain stage of life and compare themselves to friends or colleagues or to
their own expectations, and feel that they’ve fallen behind.
Money
worries can leave you trapped in a relentless cycle of anxiety. Some clients
with ‘net worth anxiety’ come to me so focused on regrets that they waste all
their mental energy going over what they should have done or achieved in the
past. Others are so anxious about money that they can’t face actually dealing
with it, so they refuse to look at the figures, leave envelopes unopened and worsen
their financial situation through fines and late payment fees. (One client
calls this behaviour ‘fruitbowling’ as she stashes unopened bills and bank
statements under her fruit bowl!).
I’ve been
working with a number of clients recently to help them minimise the power of
anxiety over their thoughts and behaviour and to move towards where they want
to be instead. The first step out of these traps is to put their theories to
the test. One 46-year-old client was feeling anxious, out of control and
totally behind where she felt she should be with her money. We examined whether
this perception was actually true – assessing the figures for her finances,
putting her pension, mortgage and investments into a spreadsheet. The resulting
figures were nowhere near as dismal as she had thought. Her relief was
palpable.
Another
couple felt they were in a desperate position with the husband coming to the
end of a work contract and they were worried about how they could manage their
life. We tested this by going through bank statements and estimating their
current spending compared to their income. We tested the numbers using lots of
different scenarios for the future and discovered they could afford to spend
significantly more than they had anticipated.
It's
great when I can put someone’s mind at ease by demonstrating that the anxiety
is a feeling, not a response to a reality. But even when someone’s financial
difficulties are as real as they fear, it’s important to move forward by asking
how we can enhance their net worth and work towards their life goals, rather
than draining energy going round in endless circles of anxiety and regret. Here
I often work with the concept of the ‘slight edge’ based on the book by Jeff Olson – it’s a simple principle that
demonstrates how small changes have a compound effect and make a big difference
over time. We don’t often associate being in order and control with freedom,
flexibility and fun, but facing up to finances, with small steps and sound
planning, can put you back in charge of your life.
I’d
suggest these five steps as a route out of anxiety:
1) Test
the reality
Put your financial situation into actual figures, set them in a spreadsheet and create a projected cash flow. You may need outside help to do this as it’s hard to see the wood from the trees when you’re feeling emotionally charged. So seek help, whether from financially literate friends or family, or from a professional financial adviser or coach.
Put your financial situation into actual figures, set them in a spreadsheet and create a projected cash flow. You may need outside help to do this as it’s hard to see the wood from the trees when you’re feeling emotionally charged. So seek help, whether from financially literate friends or family, or from a professional financial adviser or coach.
2) Focus
on what you actually want
Focus on what you want, not what you don't want. Draw a picture of your future vision. Watch this inspiring TEDxTalk with Patti Dobrowolski, who offers an inspiring talk and a great template to help you do this.
3) Have gratitude
Focus on what is good and positive, and let go of regrets. Don’t beat yourself up if you perceive you’ve taken a wrong turning in the past.
4) Commit to action
What steps to you need to take to move towards your goals? Take small steps, embracing the ‘slight edge’ and knowing small actions will cumulate to make big changes.
5) Acknowledge and reward
Appreciate what you have done so far to get where you are. Maybe you haven’t made as much money as you’d hoped, but celebrate what you have gained in your life’s story – your net worth is not your whole worth. A life rich in experiences is another type of wealth.
Focus on what you want, not what you don't want. Draw a picture of your future vision. Watch this inspiring TEDxTalk with Patti Dobrowolski, who offers an inspiring talk and a great template to help you do this.
3) Have gratitude
Focus on what is good and positive, and let go of regrets. Don’t beat yourself up if you perceive you’ve taken a wrong turning in the past.
4) Commit to action
What steps to you need to take to move towards your goals? Take small steps, embracing the ‘slight edge’ and knowing small actions will cumulate to make big changes.
5) Acknowledge and reward
Appreciate what you have done so far to get where you are. Maybe you haven’t made as much money as you’d hoped, but celebrate what you have gained in your life’s story – your net worth is not your whole worth. A life rich in experiences is another type of wealth.
- See
more at: http://financial-coaching.co.uk/blog/post/coping-with-money-worries#sthash.4E3UYRN1.dpuf
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