How to solve financial problems and stress
Money is one of the biggest contributors to stress that steals thousands of lives a year around the world.
It has controlled mankind for thousands of years and there is no sign of it slowing down.
Worse yet, more and more people continue to pledge their entire lives towards acquiring money with the hopes that it will change their life and generate freedom for the better.
Contrary to somewhat popular belief I believe it can, to a certain extent.
But it depends solely on the individual’s intentions behind their need to acquire material assets.
We all need money in order to survive; to eat and drink, for shelter and warmth, and even to traverse across the globe to meet with long-distance friends, family and loved ones.
However the goal of this article is to teach you how to solve your financial problems once and for all.
To paralyze and remove money as a stress-factor from your life.
To instill powerful, positive beliefs about money as a concept, whilst delivering some hands-on solutions and activities, that can enable you to live a happy, content life regardless of the number of 0’s at the end of your bank balance.
Click any of the links below to jump straight to the hands-on strategies and activities.
Why is money so stressful to deal with?
Learning how to solve financial problems is difficult and stressful because money as a concept is stressful.
People rarely talk about money in a positive light, aside from their need to acquire it.
We’re socially conditioned to believe that it’s a necessity in order to enjoy life.
It is used as a bargaining chip to deny people from enjoying the things they currently have in their lives which overtime, results in a lack of appreciation towards those things in favor of something newer.
For practically everything in our household that we own, there are probably 500 adverts currently running on our television sets trying to convince us why we should ‘upgrade’.
That’s perfectly fine though, it’s simply the act of understanding human psychology in order to sell a product or a service.
However what’s comical is how we are judging each other by a perpetually changing and ever-expanding set of parameters, attributes and qualities with regards to finding a suitable mate to have a relationship with.
Not that this is wrong per se, but it seems like everyone has become an expert at playing ‘compare and contrast’ that we are now beginning to disregard others who lack qualities that contribute little to no value towards what makes a relationship truly great, in the name of ‘preferences’.
The glamorization of celebrity culture, consumerism and a desire to live a lifestyle that one cannot maintain
Learning how to solve financial problems begins with your ability to identify what kind of lifestyle are you trying to afford or sustain.
And figuring out whether your income can match the demands of that lifestyle.
From personal experience, I know that most people who struggle with money problems try to live lifestyles their income cannot maintain.
Whilst I’m a strong advocate of taking responsibility for your actions, it’s not completely your fault if you do ascribe to the above descriptor.
Everywhere we’re surrounded by celebrities and their outlandish lifestyles.
However its not their existence I have a problem with, but rather the way they are heralded as holy beings who require your undivided attention.
Unfortunately this attitude is negatively circumvented among our population.
It’s no wonder why so many people struggle to solve their financial problems when the top 1% of society are advertised as being more important to the world than everybody else is.
Just because of what position they’re in on the Forbes Richest list or how many twitter followers they have.
Think about it.
The same applies with regards to how consumerism is somehow rewarded socially.
Many people seem to have this idea that the more you own, the more respected and admired you are.
Sure, you may be respected, envied even but are you respected for the reasons you want to be respected for?
Solutions and activities for solving financial problems
Learning how to solve financial problems and money stress is not an easy feat to achieve.
However there are several things you can do to improve your money situation and live a stress-free life.
Substitute mental accounting to budget effectively
Mental accounting (video) is the idea of separating money into different accounts based on how it was acquired or where it came from.
It is one of the biggest reasons why people struggle with managing their money and continually find themselves out of pocket from month to month.
Firstly, you must learn and master the art of delayed gratification.
It is a very important life skill which has been touted many times as a prerequisite for success and achievement in life.
To delay your gratification means to put off activities which provide you with pleasure in order to complete tasks that are of more importance at the present time.
In the context of money, you can learn how to delay your gratification by creating an effective budget plan, that exists to curb your spending without removing all elements of fun from your life.
Create A Personal Budget Plan
I prefer to use a little ingenuity with regards to how I handle budget plans.
The benefit of this model is that it can help you build and strengthen your ability to delay gratification regardless of how good or poor you may be at budgeting.
If you’re spendthrift, and struggle to save money regularly, I would advise you to split your disposable income by a ratio that you’re most comfortable with.
Follow the steps below and all will become clear.
Step 1: Splitting Your Disposable Income
If you earn £1,800 a month and after all expenses you’re left with £320.
This is your disposable income.
You now need to assign a % ratio that you’ll use to split your disposable income into two separate accounts.
Spending money and saving money.
Don’t punish yourself by assigning a 10%/90% split in favor of saving money, especially if you find it difficult to save money each month.
You will undoubtedly fail to reach your money and financial goals if you force a new stimulus upon your mind and body without warning or gradual exposure.
Remember, learning how to delay gratification should not be interpreted or practiced in a way that makes you feel like you’re unnecessarily bullying yourself into oblivion.
You only need to curb your spending to a point till you don’t feel overly restricted.
Continuing with our example:
- You earn £1,800 a month…
- After all expenses, you’re left with £320
- You decide to split your disposable income (£320) by a % ratio which reflects your current spending habits.
- If you are quite spendthrift, you may decide to adopt a 20%/80% (£64/£256) split – saving money/spending money.
- If you’re already very good at saving and don’t spend very much, then you can probably adopt a 60%/40% (£192/£128) split.
If you are so utterly poor at saving money – I would suggest adjusting the amount you save per month at a minuscule level: e.g. increasing the amount you save/decreasing the amount you spend by 2-4% every month.
Why do I suggest such ‘extreme’ methods for learning how to save money and solve your financial problems?
The reason for this is simple.
Our mind and body has an amazing ability to adapt to almost any given stimulus, if it is exposed to that substance, stimulus or environment for a very long time.
Want to learn how to do a handstand?
Then attempt a handstand hundreds of times until you’ve built the muscle memory and dexterity to pull it off perfectly and with ease.
The same applies to learning how to manage your money efficiently.
By putting away even £10 a month in a savings account, you are subconsciously teaching your body and mind how to handle and manage the remaining £310.
Once you become used to this way of living, you will slowly but surely develop the willpower required to delay your gratification.
Overtime, by slowing increasing the amount you save – you’re adapting to the change of having less money to spend on things you don’t really need.
Eventually it becomes so easy that you’re able to shift away £100 or even £200 without thought, as you’re developing a skill I love to call ‘progressive willpower’.
In addition to learning the art of delayed gratification, you can solve your financial problems by becoming painfully aware of what really constitutes a need and a want.
Effectively distinguish between a need and a want
Too many times have I seen people spending recklessly as a means to justify the worth of their existence to others.
- Buying unnecessarily expensive designer clothing to look ‘chic’ and ‘upper-class’, or fitting into a certain niche or clique.
- Buying several rounds of drinks during a friends night out so you don’t look like a cheapskate or a sponge.
It’s not my job to tell people what they need and want.
I don’t even take issue with those who spend lavishly, in fact I’d argue that it’s beneficial to the economy for them to do so.
However, if its going to have a detrimental effect on the material wealth component of your life, then I’d advise against it.
The most important message that I’m trying to share is that you can derive pleasure off of other activities, goals and people on a daily basis, without the need for an influx of material goods or assets.
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