I participated in a discussion on MMM forum today where a poster said the following:

More than 1 in 4 Americans report they feel stressed over money most or all of the time, and most say their stress over money has either remained about the same as last year (59%) or gotten worse (29%). http://www.latimes.com/science/la-sci-sn-stress-report-money-inequality-20150205-story.html

After reading the post and thinking about my own experiences, I realized that Uncertainty about the future is a big part of stress in any area…be it money stress, job stress, relationship stress or health stress. Unfortunately, I have been there, done that in all the areas I mentioned here. But, over time, I have managed to come to somewhat come to grips on each of them to varying extents. Today, I thought I will write about how I am handling my Money stress as a way to help some folks and as a way to learn from some more folks.

In my mind, there are three kinds of money stress I have seen/been around/experienced.

Type 1: Stress about money decisions made in the past

Examples in this type of money stress are:

• Bought a home in the peak of 2007 in a HCOL area (friend)
• Did not buy a home in 2009-2011 (me)
• Did not invest money when I was young….(me)

Type 2: Stress about money decisions of today

Examples in this type of money stress are:

• How will I pay my bills this month? (me)
• My car broke down..how can I pay for it?  (me)

Type 3: Stress about money decisions of the future

Examples in this type of money stress are:

• How will I pay for retirement? (me)
• How will I pay for my parent’s care? (friend)
• Will I have a job in 3 months? (me)
• Can I even buy a house? (me)

People can be in any of the above three OR all three. At many points in life, I have experienced the following combinations of money stress:

• Type 1 only.
• Type 1 and 2 only
• Type 1 and 2 and 3

My attempts at overcoming Money Stress

But, as I have grown older and started chipping away towards FI, I have reached the following state of mind:

I am least stressed about Type 1

• stress is not zero..but I have mostly come to peace with my past

I am about 30% stressed about Type 2

• An emergency fund has really helped.
• A life insurance policy has really helped.

I am 70% stressed about Type 3

• Figuring out what financial independence means to me really really changed my life. It reduced a huge amount of Uncertainty on what the financial future looks like for me and my family.
• Putting a $ value to each goal helps me stay focussed.
• Tracking my progress towards financial Independence via this blog really helps in the following way:
  • reminds me of my goals pretty much every day.
  • reminds me to work hard to protect my current income.
  • reminds me to keep expenses as low as possible
• Working towards Passive income streams before buying a house.
  • Sacrificing current desires for certainty about the future
• Worry about smaller periods of time.
  • For example, if I only consider tomorrow, I have some worries. If I consider 1 year, my worries increase dramatically.

The Future

It has been a constant battle with money stress and basically uncertainty in life and I am sure that the battle is far from over. But, the above tips I have been practicing have helped me control the stress by slowly chipping away at the Uncertainties in my life…one chip at a time.

Hopefully, the above tips are helpful to others as well. Please share your own tips with me so that I can better my life by learning from your experiences.