Money Stress…how I am trying to manage it.

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%).

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 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

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.


Causes of Stress in Life

I run into many people who are stressed about various things in their day to day life. Apart from me, one such person happens to be my wife. My wife has been stressed out lately and that has resulted in her asking some questions much more frequently

  • When can we have a normal and relaxed life?
  • When can we buy a house and settle down?
  • When can you not work weekends?
  • …..

I have tried to offload work off of her plate, but push comes to shove, I have to put food on the table and hold the fort. To me, the answer is quite simple…it boils down to two things:

  • You got to do what you have to do to survive in the area you live
  • We all want everything, but do not want to give up anything.

So, it is hard for me to understand sometimes why my wife is having issues…we live in the Silicon Valley…some of the brightest minds come to work in the Valley and everybody wants the best for themselves and their families. This is bound to make things more competitive and such….basically, a rat race. If you have to survive, you have to run the race. Or do you?

After one such emotionally charged discussion, I decided to explore the question of what factors can cause stress in people. Having paid a costly price w.r.t health in the fight for survival, I have some personal expertise in this area. But, I wanted to be fair and treat this as a new problem and see what come up. I wanted to see if I can solve my wife’s issues better than I have been doing. If she is happy, the family is more happy 🙂 So, I did some digging.

The following factors seem to be the most common causes of stress in life

  • Uncertainty about various things
    • Work Life
      • unemployment, colleagues leaving, company dying, etc etc
    • Social Life
      • Friends moving away, Peer pressure, politics of social life, etc etc
    • Financial Life
      • Can I afford a home at all? Can I afford a new car? Can we handle an emergency? When can I achieve financial independence? etc
    • Personal Life
      • Am I being a good parent? Am I being a good spouse? Am I being a good friend?
      • etc etc
  • Quality of Life
    • Cost of living, Commute Time, Crime, Pollution, Weather, Population Density, Integration into Neighborhood, Work Hours per day, Sleep hours per day, time spent with family per day, etc
  • Health
    • Family Health, Parents health, etc
  • Standard of Living
    • Nice House, Nice Car, Travel the world, etc

Over the next few weeks, I will take each of the above stressors and talk about the stressor and potential solutions to the problems that arise out of the stressor.