Money and Stress | Spencer D. Sherman gives you the tips you need to create financial success

MONEY MATTERS
SPENCER D. SHERMAN, CEO OF ABACUS WEALTH PARTNERS AND AUTHOR OF
THE CURE FOR MONEY MADNESS, GIVES YOU THE TIPS YOU NEED TO CREATE
REAL AND LASTING FINANCIAL SUCCESS FOR YOUR WHOLE FAMILY

MONEY AND STRESS

Balanced Budget The American Psychological Association reports that 75 percent
of the population says that money is the No. 1 source of stress
in their lives. There are a lot of reasons for this. We know that
incomes have not kept pace with inflation. We know that the
economy and the sudden loss of wealth, income, homes, jobs and security have been great stressors.

But beyond the things that we have no control over, there are actually quite of lot of things we can do to reduce financially related stress in our lives.

For one thing, we can take back control of our spending by tearing up our plastic. There may be good reasons for buying with credit cards, and I don’t dispute those. But did you know that people spend 10 to 20 percent more with plastic than with cash? It’s just not that easy to plunk down cash for unnecessary or extravagant purchases. Somehow using plastic makes us feel like it’s not really our hard-earned money that we’re spending. We’re a bit more easygoing with the purchase of extras at the supermarket. We’re more likely to buy the cashmere rather than the wool. All those extras add up. Remember, it’s simply not possible to overspend when you are only using cash.

We underestimate the stressful effects of overspending. For example, if you are stressed out over a break-up or an argument or a difficult boss and you decide to treat yourself to a night out or a massage or a new sweater, remember that spending money on things we can’t afford can be mighty stressful, too.

I invite you to start spending within your means and notice if your stress levels decrease. Download my Spending Intentions Sheet from www.curemoneymadness.com. Once you’ve calculated your fixed spending (mortgage, rent, insurance, car payment), take the rest of your income and think how you’d like to spend it. You’ll notice that both saving and charity are fixed categories. This is because it’s very difficult to think of yourself as poor or incompetent with money if you are saving it or being generous with it.

Rather than a budget, this sheet asks for ranges of numbers. Psychologically, this is very powerful. A fixed number can feel like a straitjacket. A range of numbers gives us freedom, and we don’t feel the need to rebel against it. For example, instead of writing down that you’ll spend $100/month on entertainment and $200/month on clothing, write $50 to $100/month on entertainment and $100 to $200 on clothing. (It’s more difficult to overspend when you’ve given yourself a low and high range.)

Be nice to yourself, but don’t compound your financial stress by overspending. This is the time to find inexpensive or free ways to treat yourself. For the next month, use cash instead of credit cards and stick to your spending ranges. Notice if your stress levels change. Notice if you’re spending differently and if you are finding new (and less expensive) ways to enjoy yourself.

Spencer Sherman is the author of The Cure for Money Madness and the CEO of Abacus Wealth Partners. He lives in Northern California with his wife and their two children. For more, please visit www.curemoneymadness.com and www.abacuswealth.com.