How to Reduce Financial Stress

For many of us, stress and money can go hand in hand, and if you do not know how to reduce financial stress, your life can be thrown greatly out of balance.

So what can you do to begin making changes toward greater balance in your life? Some clues can be gained by rethinking how you spend your money and time. The following three exercises can be helpful for figuring out how to reduce financial stress:

1. Make a three column form on a piece of paper. In the first column, record each purchase you make, and in the second, note how much you spend on it. In the third, note the level of satisfaction you gain from that choice. If you like, you can use a scale of -10 to +10, indicating the level of dissatisfaction or satisfaction that you experience.

   For example if you spend $10 to go to a movie that you didn’t enjoy, your level of satisfaction might be -8. If you buy a jacket that you really enjoy and that keeps you dry and warm, perhaps your return on that investment will be a +9. Make similar notations for every purchase you make.

2. Keep a similar log of how you spend your time, noting the quality of satisfaction that you gain from experiences that you have that don’t really cost any money. For example, watching the sunset, talking with a friend, playing with your child, holding a loved one in your arms. How much fulfillment do you gain from how you spend your time in these ways?

   (This is a great exercise for finding more time in your life for things you want to do--it’s amazing how much time we fritter away on things we really don’t care about.)

3. Take some time to figure out your hourly earnings, after taxes and other deductions. Once you’ve done this you will know how much your “life-time” is really worth. With a clearer sense of what your “life-time” is worth to you, you will be in a better position to evaluate how you invest your time, energy, and attention.

   For example, if you make $10 an hour, then a movie ticket or a meal out for $10 is equivalent to investing one hour of your life. Remember, the choice is always yours, and to the degree you are awake to what the real costs are, you will be more likely to create balance in your life by “spending your time” in more fulfilling ways.

Stepping back to analyze how your investments of time, energy, attention, and money create balance or imbalance in your life can offer valuable insight into how your choices create or detract from the quality of life you want to live. This can offer a much clearer picture of the root causes of financial stress in your life, which may in turn help you identify ways to better manage that financial stress.

Many people notice that as the cost of maintaining their lifestyle falls, the amount of free time in their lives increases. The decision to slow down and simplify often adds quality time to your life.

With more time you will be more likely to discover and explore what truly satisfies you in your life. It gives you the opportunity to improve and strengthen your relationships, and to focus on the values and life priorities most near and dear to your heart.

[Adapted from the book "Living in Balance" by Joel Levey
and Michelle Levey]