Financial stress is real, but there are ways to deal with it. Here are 11 ways to “worry less and be happy” about money.
No matter what’s going on in the economy or in your life, stress about money can be a rollercoaster of emotions. No matter how much (or how little) money you have, most people feel financial pressure, especially when their future security is uncertain. We’ve all asked ourselves at some point: “Am I making the right financial decisions to be happy in retirement?”
Recent study It turns out that nearly all Americans (90%) say financial considerations affect their stress levels.
But stressing out won’t solve the problem.
Here are 11 practical steps you can take to worry less about money.
1. Focus on what you can control
If you can control inflation and the stock market, call President Biden, the head of the International Monetary Fund, and all the big business leaders. We need you.
But we likely have no control over the larger economic factors that affect us all.
So to reduce financial stress, focus on what you can control, like how much you save and how much you spend. For example, find cheap gas in your area and deposit the savings into your retirement account.
You don’t have to solve all your financial worries, but the sense of accomplishment you get from taking small positive steps can increase your sense of control and reduce financial stress.
2. To reduce stress and be happier, focus on happiness
Financial stress is bad for your health. Financial anxiety negatively impacts your health, happiness, home life, mood, social life, and your ability to pursue your dreams, passions, and interests.
Surveys show that six in 10 people now define the American Dream as a happy family life and financial stability, and two-thirds of U.S. adults believe it is attainable.
In today’s world, the perception of the American Dream has changed dramatically. Few people are interested in “keeping up with the neighbors” anymore. Financial stability and a happy family life have become more important than wealth or social class.
If you want to spend your retirement years happily and securely, try these things:
- Prioritize – Know what is important to you and forget the rest.
- Throwing things away – More stuff doesn’t make you happier. Psychologists have found that lessening or paring down your possessions can actually make you happier. (See 7 Reasons to Declutter.)
- Think about the experience – Social psychologists have proven that if you want to spend money on happiness, you should spend it on experiences. Having more material things doesn’t make you happy. Doing interesting things does.
- Expressing gratitude – You can always find something to be grateful for. Whatever your retirement life looks like, focus on the things that are meaningful to you: grandchildren, your health, your garden, a network of friends, a comfortable bed, money in the bank, a cherished pet, a hobby.
If you focus on what’s important, rather than trying to do it all, you’ll be much more likely to achieve financial independence and be happier.
3. Pay off your debts Reduce financial stress
The majority of survey respondents believe that getting rid of debt will have the biggest impact on their financial situation, even more so than significantly increasing their income.
Most experts would agree that eliminating or reducing debt is a great way to improve your financial outlook.
Depending on your situation, you can reduce your debt in the following ways:
4. Know how much you really need Saved
Figuring out how much you need to save can be confusing. This calculation involves many interrelated factors. And, frankly, facing the overwhelming task of saving enough can be intimidating.
But setting realistic goals based on personal calculations can be a great way to motivate yourself.
And many people actually Too much saving!
The NewRetirement Planner is a highly detailed and fully personalized retirement calculator that gives you a realistic idea of how much you actually need to achieve your desired retirement income.
If you’re still worried about where you’re going to get the money to save after you’ve set your savings goal, check out these articles: 22 clever and easy ways to boost your savings and 11 everyday expenses you can easily cut to boost your retirement savings.
5. Ignoring the financial markets
Sometimes the market will fall and economic times will look tough, and other times it will hit all-time highs. Remember, the highs and lows don’t really matter to your long-term financial security.
The only thing we know for sure is that while financial markets are unpredictable, we can be reasonably confident that the long-term outlook is favorable.
So you need to set up an investment strategy (preferably a diversified portfolio) and forget about it except for rebalancing once a quarter or half yearly to maintain your asset allocation strategy.
Experts say you should have a strategy and stick to it. Consider creating an investment policy statement to document how you’ll survive financially during a downturn.
Need help? A financial advisor can help you with this: Set up a free discovery session with NewRetirement Advisors and let’s work together on how to reach your financial goals.
Whatever you do, it’s probably not a good idea to sell your holdings when the market is falling. Always remember that a loss isn’t a loss unless you actually sell. If you can hold on to your investment, you have a better chance of recovering.
6. Maintain a detailed financial plan
Proper financial planning means knowing how much you have now, how much you’ll have in retirement, and how much you’ll have near the end of your life. You should also know how much you’ll need at each stage.
Recent study A study by the Employee Benefits Research Institute (EBRI) using data from 2005 to 2017 found that spending in retirement has declined over time. The authors concluded that “despite average spending being lower for older age groups, the probability of having a budget deficit, defined as total spending exceeding total income, increases with age.”
Essentially, for the past 15 years, retirees have struggled to create a retirement plan that accurately reflects how much they need to spend.
Not knowing is stressful, and knowing can really help you make adjustments and set achievable goals. This knowledge can motivate you to save more, work longer, and spend a little less.
Best of all, retirement planning doesn’t have to be difficult. With the help of a good online calculator, you can create a detailed plan and stick to it for the long term.
The NewRetirement Planner is unique in that it is both easy to use and informative. It takes just five minutes to set up, and then you can spend as much time tweaking it as you like until you find a plan that works for you. The tool was recently awarded the 2019 Retirement Planner by the American Association of Individual Investors (AAII).
7. Create a backup plan
One of the fundamental fears about money is not knowing what the future holds. And when you retire, you no longer have job security and you have to rely on what you have. You can’t prepare for the unknown, but you can have a backup plan.
With the NewRetirement Planner, you can create not only a baseline plan, but also a plan for if everything goes wrong. Knowing you have options to deal with the worst-case scenario will reduce stress.
Your backup plan should include:
- Leverage home equity: Homeowners are especially fortunate because they have home equity that they can tap into during the crisis by downsizing or securing a reverse mortgage.
- Starting a side hustle after retirement or going back to work (doing something you love, etc.)
- Cutting costs in tough times
- Build sufficient flexibility into your budget and investment plans to weather tough economic times
8. Change your perspective
Saving for retirement is one of the biggest stressors for most people. But retirement is a very different life than work, so adjusting to the new world of retirement may require you to shift your perspective in many ways.
Retirement is a big change, and understanding your future retirement and looking at the opportunity from a different perspective may help reduce your stress levels.
Here are eight ways to change the way you think about retirement.
9. Discuss money with your family
Merrill investigation A staggering 79% of parents provide financial support to their adult children, and according to caregiver.org, 34.2 million Americans are providing care to an adult over the age of 50, usually a parent.
At the same time, a BlackRock survey found that 47% of Americans worry they will be a burden to their family.
Therefore, if you have concerns about providing or receiving care, it is very important to discuss your expectations and resources with family members (both children and parents).
Tips for discussing money with your family.
10. Take care of yourself
Want to reduce financial stress? Take care of yourself. Healthy eating and exercise will solve all stress.
Physical Activity: Make physical activity a part of your daily life. If you love exercise, this is easy. But if you’re not good at running, lifting, or heavy lifting, don’t give up.
Research shows that there are many ways to stay physically active as you age. Gardening, cooking, and working in the garage are all forms of physical activity that can help you stay healthy and active. Try to avoid sitting as much as possible.
Going somewhere/doing something: Study after study shows that having a reason to live – a reason to get out of your chair – is crucial. And if that purpose also provides you with a daily routine, even better. Having somewhere to go regularly has also been proven to help keep us healthy and motivated. A regular routine is said to be what makes work so beneficial for our overall health.
eat well: If you’ve always eaten healthy, it’s easier to keep it up as you get older. If you have bad habits, start with small nutritional changes like cutting back on sugar and increasing your intake of fish, nuts and legumes.
“Mediterranean diet” offers some excellent guidelines for diet as we age, promoting heart and brain health and helping to prevent cancer and diabetes.
Regular check-ups: Medicare covers the cost of yearly physicals and has many programs to help you stay healthy. Early detection and prevention are great ways to prevent serious health problems.
11. Stay mentally focused
There are many more things to worry about than money, and a way to reduce financial stress is to stay in perspective and actively participate in other intellectual and social activities. Here are three ideas to help you:
Find and commit to your purpose: He is a gerontologist, dean, and DeLaMar Professor at the Mailman School of Public Health at Columbia University. Linda P. Freed “We are a species hardwired to feel needed, respected and have a sense of purpose. A lack of these qualities is actually detrimental to our well-being.” Consider volunteering after retirement.
Acquire intellectual hobbies: As the saying goes, “If you don’t use it, you lose it!” Brain Research Learning new skills and knowledge and being able to switch between them flexibly is key to improving brain health.
Create a social habit: Having friends and meeting up regularly is an important way to lead a healthy, active life. Arrange to meet a friend for coffee every morning. Join a club. Find a volunteer or part-time job. Whatever you do, make sure it’s a habit and something you can be accountable for.
Don’t worry about money, be happy
Remember “Don’t Worry Be Happy” by Bobby McFerrin? If you’ve still got that song stuck in your head, let me help!
Let’s hum along as we work through our financial plans!
Here’s a little song I wrote, why don’t you sing it note for note.
don’t worry be happy.
There are always challenges in life, but worrying only makes them worse.
don’t worry be happy
Don’t worry, be happy now
(Woo, woo, woo, woo, woo, woo) Be happy
(Woo, woo, woo, woo, woo, woo) Don’t worry, be happy