Happy new year! Rather than publish a financial New Year’s Resolution, I’m posting a New Year’s Confession.
The confession? Despite all that I do in the world of personal finance, money still stresses me out.
- I write about money
- I think about money
- I make enough money
- I do smart things with my money
…and yet still get stressed about money.
My goal isn’t to eliminate this stress. I think it’ll always be there in some form, like a personal finance shadow.
Instead, I want to expose that stress to as much light as possible. I want to give it a name and understand it better. To make it less scary, and thereby reduce its magnitude.
To start: where does my stress come from?
Where Does My Stress Come From?
After admitting this stress to my Twitter followers, my friends The FI Couple asked:
“is there something specific about money that causes you stress?”
This is a great question and a generous question. Because the answer could be any number of causes, such as:
- Not saving enough
- Not earning enough
- Financial literacy confusion
- Housing instability
- Not knowing where my money is going
- Or a thousand other things…
But none of the above stress me out (thankfully). Instead, I’m stressed by what I perceive as an oncoming and hard-to-quantify wave of spending…
The Oncoming Wave of Spending
Let me set the scene for you:
- My fiancee and I are both 31 years old.
- We’re at turning points in our careers. I’m starting a new job next week. She’s working full-time and in the middle of an MBA program (go Kelly!)
- We’re getting married in September 2022 (woohoo!)
- And then…kids? I’m told they’re kinda expensive to raise.
- We share a small-ish house—about 1100 square feet. We’d like to upgrade eventually. And we’re currently living in the hottest housing market in the country.
- Her car is 15 years old. Mine is 9 years old. These too will need to be replaced sooner than later.
Look at that list. I’m looking pretty hard. We might spend a lot of money over the next few years. What do you think that list might cost us? An MBA degree, wedding, kids, house upgrade, cars…
Some of those costs will occur in the next 2-3 years. Others will be amortized over 10, 20, 30 years.
I think the near-term costs could be as high as $200K in the next 3 years. The long-term costs could easily surpass $1 million.
Life can be damn expensive, even if you’re making “good money” (our salaries are about 70th and 80th percentile). And those expenses are uncertain in magnitude and in timing.
I don’t know what our future income will be. I don’t know what our future expenses will be. That in itself is concerning. But when I add in the high-stakes of getting this planning wrong…yes, it stresses me out!
How to Reduce This Stress
I’m doing my best to keep the stress in check. The following four reminders have helped me a lot.
First, I’m reminding myself of where my fiancee and I are in our financial lives. Our only debt is from a low-interest mortgage. We have an emergency fund. Our budgets give us so much valuable information to plan our future. Our retirement accounts (401k’s & Roth IRAs) are very healthy. We already have a lot of good things happening.
Second, all spending can be prioritized. We don’t have to spend all that money over a short time period. We can choose which spending is most important and most urgent.
Third, hard work usually helps. If a magic genie came to me today and said, “In two years, you will both be earning enough money to eliminate your current stress,”…then I’d start relaxing today. What a pleasant genie! Sadly, that genie doesn’t exist.
But I can try to make the genie’s prediction come true. The easiest way to do so is through hard work, consistent work, and valuable work. Don’t take this as a “hard work equals wealth and laziness equals poverty” sentiment. Instead, it’s a statistical statement.
Hard work is one factor that improves the odds of your cream rising to the top. And it’s a factor that you can always control.
Fourth, the trail before us isn’t unblazed. Millions of people have taken similar paths before, albeit with different incomes and expenses. If they made it, I’m betting we’ll make it too.
We All Stress…
In writing this article, I found this quote:
“Stress is directly related to how out-of-control we feel.”
Part of the future is out of my control. That stresses me out.
Yet the four reminders above all point towards how we can regain and retain that control. We can choose smart choices. We can choose to prioritize. We can choose to work hard, and choose to emulate prior success stories.
Are you stressed about things outside of your control?
It’s completely understandable.
But ask yourself…
What can you do to regain and retain that control?
The answers to that question have helped me, and I think they’ll help you too.
I wish you nothing but a happy and healthy 2022!
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Come on buddy, you’ve got this. You are in one of life’s best possible spots, with so much fun stuff ahead of you! And you understand money, you’ve got a plan and you have a grateful, joyful outlook on life. It is natural to feel some stress when you have impending changes like new jobs, getting married, having kids…and some day teenagers!!!!! Try not to think about that last one, its a biggie. We didn’t find kids that expensive and we raised three to adulthood.
Part of my brain is 100% agreed with you, Steve.
Another part has some worry.
All part of the learning/living process, I think 🙂
I feel the same way. Even though I am fully capable of going back to work full-time in the event of a catastrophe, I still run through weird what-if scenarios when my brain runs wild.
When I get this stress, I just try to acknowledge it, just like you did here. Damn straight I am still stressed about money. But as soon as I acknowledge it, it usually begins to go away.
You have a great handle on the money side of life, you are tracking it and have control of the things you can control. Yes there will be some stress and unknowns, but I have faith you will be able to deal with whatever comes up.
I think you’re right 🙂
As Ray Dalio says, “If you’re worried, you have nothing to worry about. If you’re not worried, then you have much to worry about.”
e.g. the act of worry/stress is self-correcting