Looking back, it’s safe to say that 2020 has humbled us all in ways we never imagined.
Never in my life did I think that one day the streets, malls and restaurants would be crowded, and then completely empty the next day, looking like a zombie apocalypse movie. I also didn’t think we would still be here to fix this almost a year later, but here we are.
See all personal finance games from NFL linebacker and collaborating editor Brandon Copeland at Kiplinger.com
During these months of isolation and uncertainty, I thought a lot about mental wellness and how it relates to personal finances. Looking for more information, I spoke recently with Joe Holder (see our full convo above), a leader in the health and wellness industry, founder of the Ocho System and a Nike Master Trainer. Joe provided a thoughtful perspective on the relationship between money and stress and offered some great tips on how to manage your mental and financial well-being.
Holder spoke of money anxiety disorder, a concept that has stuck with me since our conversation. Anxiety around money can arise at any level of wealth or income. As Joe explained throughout our presentation, hypersensitivity to financial decisions can take many forms. Whether you frequently spend too much money trying to keep up with the Joneses, or are so frugal that the stress of spending money outweighs the experiences life offers, an unhealthy relationship with money can lead to mental anguish.
As I reflect on my personal financial journey, I realize that I am up to the diagnosis of Money Anxiety Disorder. Even though I have worked hard to earn, save and invest my money while living within my means, the following thoughts constantly cross my mind:
Am I saving enough? Will my family and I have enough? Should I invest more or am I overexposed? And when I’m older? Will I have enough to comfortably retire? Can we afford this vacation?
One of my goals for 2021 is to cultivate a healthier and more balanced relationship between my personal finances and my mental well-being. From a financial standpoint, I plan to achieve this by first redefining my “Why.”
Our personal “why” can act as a safeguard during the ups and downs of life. He can also be your “North Star” when adverse situations arise. It can be difficult to find motivation, maintain your focus, and stay disciplined day in and day out without a purpose for what you’re doing. In sports, most athletes can identify their “why”, which fuels them mentally through grueling practices, practices and even injuries to play in the next big game. Outside of sport, your “why” can help you meet your financial goals.
Of course, life will inevitably throw some curveballs at you, but understanding your reason (s) for working, saving, and investing will help keep you on track throughout your mission.
The next financial steps are easier to tackle (see what I did there?). Calculate your monthly recurring expenses, then create a financial plan for yourself that ties your “why” to your budget. Perform your own financial audit to view your finances at a higher level. It’s like watching a football game because of the nosebleeds. Yes, each player might look smaller, but you can see the entire pitch from that view, as opposed to the front row seat at the corner of the end area. You want to review your finances from the same perspective.
From there, you can create a plan consistent with your “why”. This is where critical thinking comes in. There isn’t a book, mentor, or financial advisor that can tell you what you really value in the long run. Whether you want to save for your child’s college education or want to start your first business venture, you’ll have a plan to help you reach your financial goals.
The final step in helping to minimize anxiety around your financial decisions is to automate your financial activities wherever possible. Automatic bill payments or deposits to your savings, brokerage, or retirement account will free up your mental bandwidth to focus on other things, so you don’t have to waste time on repetitive tasks. Tools are available to help you put your plan on autopilot this year. Do some research and make it work for you!
To gain more control over your finances and mental well-being, start by recognizing how important this is to your overall well-being. Watch my full conversation with Joe and make 2021 the year you take care of YOURSELF!