BY BRAD BRAIN
People will often think of money problems as math problems. They think that if they could earn more, or save more, or have better investments then everything would settle down, and things would turn out okay. But if that were true, high-income earners would be the calmest people in the room.
I want to talk about is how money is often not a math problem, but an emotional one, and what you can do to reduce your money stress.
I have high-net worth clients who realistically have all the money that they will ever need for the entirety of their lifetimes but nonetheless are constantly anxious about money. I have clients that will consistently do objectively dumb things with their money because, in their mind, it makes sense. I have clients who will check on the value of their long-term portfolio on a daily basis. I have clients who are unable to make real progress because they can’t bring themselves to make a decision. I have clients that will impulsively spend a lot of money because they think it will make them happier, only to suffer with regret and remorse from doing something they logically knew made no sense to do.
These are not bad people. All of them, in their own way, is stressed out about money. And that stress is grinding them down.
One of the most common stressors is the fear of not having enough. The fear of running out of money often shows up around retirement. People will worry that they won’t have enough to afford to do the things that they want, or that they won’t be able to keep up with the cost of living, or that a bad investment could wipe them out.
These fears can drive unproductive behaviour. Sometimes people will just perpetually roll over low-interest, short term GICs rather than considering investments more appropriate for long-term planning. Sometimes people put off making important, necessary decisions because they “need to think about it”, but needing to think about it turns to permanent procrastination. Sometimes people will feel compelled to make an emotional, knee-jerk reaction decision to every alarming headline.
The irony is that these unproductive behaviours often increase risk rather than reduce it.
Another source of stress is human tendency to compare ourselves to others, which has only gotten worse in the age of social media. People see vacations, renovations, new vehicles, early retirements, and think they are falling behind. But the filtered world of social media has very little to do with financial reality and everything to do with perception. Comparison feeds anxiety, and anxiety leads to poor financial decisions.
Some people try in vain to deal with financial stress by avoiding their finances altogether. They will not open their account statements because they do not want to think about money. They will avoid conversations with their spouse because that leads to nasty arguments. Avoidance is not a solution though. Pretending an issue does not exist is not the same thing as solving it.
Then there is market noise. Every correction is framed as a crisis. Every rally comes with the urgency to get in before it is “too late.” Some people consume financial news like junk food. A little might be fine. Too much is unhealthy. Compulsively checking your account balance over and over and over does not create control. It creates anxiety.
Money matters. Money lets you do the important things. But when money becomes a constant source of mental strain, it stops being a tool and starts becoming a weight.
What I have found is that the difference between clients who are stressed about money, and those who are not, is not the size of the account. It is clarity. People who have a financial plan that they understand are at ease.
Good financial planning is not about chasing maximum returns or proving how smart you are. It is about creating stability and predictability. It is about understanding what you can control and letting go of what you cannot.
Here is what I want readers to take away from this.
Clarity reduces anxiety. Know your numbers and your plan. Uncertainty is more stressful than reality.
Stop measuring your life against other people’s highlight reels. Comparison is corrosive and financially useless.
Limit noise. Constant market monitoring rarely improves outcomes and often damages peace of mind.
Have a plan you trust. Not because it predicts the future, but because it gives you a framework for decisions.
Remember the purpose of money. It is not just to buy things. It is to help you do the things that are really important.
Taking care of your finances is not just about building wealth. It is about protecting your ability to live well under pressure. When managed properly, money should reduce stress, not add to it.
Brad Brain. CFP, R.F.P., CIM, TEP is a Certified Financial Planner in Fort St John, BC. This material is prepared for general circulation and may not reflect your individual financial circumstances. Brad can be reached at www.bradbrainfinancial.com.