De-Stressing Money

Money can be one of the greatest sources of stress in our lives. Do we have enough now? Will we have enough in the future? If we have enough, what do we do with it? This may be especially true if you are a student struggling to get by or will soon be graduating and supporting yourself fully for the first time in your life . 

Dealing with money is a part of living. We can’t get away from that fact. Money can buy some level of stability and comfort. (But not happiness it turns out. A well-known study out of Princeton University found that people were no happier making $10 million than they were making $75,000¹. In fact, making anything above $75,000 provided no increase in happiness.) So, we have to deal with money. 

But money can begin to take over our lives if we aren’t careful. Thinking about money, worrying about money, always seeking more money, constantly spending money – these can become habits that leave us feeling stressed, empty, and anxious. Dealing with money is complicated and brings up all kinds of feelings for many of us. Money is one of the primary sources of tension among married or cohabiting couples. It can tear families apart and drive individuals to make bad ethical decisions. Money has a remarkable amount of power. If we let it.

Who (or What) Is in Charge?

Instead of letting money–and thinking or worrying about money–control you, you can actually take control of it. Manage your money. Don’t let it manage you. 

As a young adult (student or recent graduate) you may feel as though you have very little control over your financial life. You may be learning how to manage your financial life completely on your own for the first time. Certainly, many events that impact our finances and money are out of our control – the massive unemployment due to COVID-19 is one example. But most of us do have some measure of control over our finances, or at least over how we approach them. Consider these three tips for managing your money so it doesn’t manage you².

Tips for Managing Your Money

1. Cultivate enoughness in your life. 

In her book, The Soul of Money, Lynne Twist observes, “Everyone is interested in money, and almost all of us feel a chronic concern, or even fear, that we will never really have enough or be able to keep enough of it³. ” This is as true for those who have far more money than they can spend in a lifetime as it is for those who truly live in need.

Many of us live with a constant sense that there is never enough money and we constantly strive for more, more, more. But this striving for more never ends. There is always going to be someone with more money than you. And at what point do you have enough? More is not always better. It’s a bit like a cancer that grows and grows and grows–but that is not a good thing. Be wary of letting a constant striving for more take over your life. Cultivate a sense of enoughness so that you can experience the life you are living and rather than just wishing for more. 

2. Count all the costs. 

Sometimes we can be caught off guard by expenses that may be hidden from our awareness–or take us by surprise. One of the most stressful experiences is running out of money when we least expect it. Losing a job or a major unexpected expense can happen despite our best efforts at planning. As you begin to take control of your financial life, consider all the uses of your money that you now have to deal with. 

• How much does your monthly cell plan cost? 
• Who will be paying for your health insurance; will you be on your parents’ plan or have to get your own? 
• What about your car insurance, your Netflix or gym membership? 

Many of you may have gotten help–from parents or financial aid–paying bills during college. Maybe your apartment lease included the cost of internet and electricity, so you never had to think about what they cost.  If you have student loans, you will soon need to begin paying those back. 

There are many hidden expenses that you may not have been aware of as a student. Count them all as you begin to put together at least a simple, basic budget. Divide your income into buckets so you have enough for all your major expenses: charitable giving, taxes, living expenses, short-term savings, long-term savings, debt payments, and discretionary expenses like travel and fun. Everyone’s financial situation is different and you may or may not have enough money to cover all of these buckets. Start with the “life jacket” buckets, but work to understand and plan for all the costs so that you can reduce the stress of surprise expenses or spending money on the wrong things.

3. Set it and forget it. 

Dealing with money can take a lot of time and energy if we let it. But it doesn’t have to. There are a number of ways to automate and simplify your money management so that you can get on living your life. Here are just two suggestions: 

• Automate your savings and investments. We’ve heard the stories about people that bet on GameStop and made a mint. But that doesn’t work for most people. Playing the stock market like that is closer to gambling than investing. And very few people beat the general market over time when picking their investments. You could spend hundreds of hours of your life trying to maximize your investment decisions and still come out behind an index fund that just sat and grew with almost no effort. The real power in saving and investing money comes in making steady, consistent progress. Set up an automatic transfer of some of your paycheck into two places: a short term saving account set aside for a rainy day (most experts recommend building up 3-6 months of cash savings to cover unexpected expenses or a lost job), and a longer-term investment account. Consider a low cost index fund, social conscious screened mutual fund, or some other simple investment portfolio. Put a small amount in every month or every paycheck and just let it grow over time. You don’t need to be thinking about it everyday for your savings to grow. 
• Automate your bill pay: Many of your expenses will likely be the same each month (rent, cell phone bill, utilities, insurance, etc.) Set them up to be paid automatically on a credit card or via ACH transfer from your bank account. A word of caution here – make sure you will always have enough in your account to cover the automatic transfers out. You don’t want to be surprised with a hefty overdraft fee because you didn’t have enough funds in your account to cover automated transfers. If you set up automatic payments on a credit card, be sure to pay it off at the end of each month. Credit card interest rates are extremely high and will cost you a great deal if you carry a balance past the end of the month. 

Dealing with money is complicated. You will likely experience times of stress related to money at some point in your life. But don’t let it take over your life. By managing your money rather than letting it manage you, you can take some of the stress out. 

Written by Mark Elsdon, M.Div. & MBA
Executive Director of Pres House

1. Daniel Kahneman and Angus Deaton, “High Income Improves Evaluation of Life but Not Emotional Well-being,” Proceedings of the National Academy of Sciences 107, no. 38 (September 21, 2010): 16489–93 [↩]
2. Disclaimer: I am not a financial adviser, tax accountant, or attorney. These are suggestions to consider but do not consider this formal financial advice. [↩]
3. Lynne Twist, The Soul of Money: Transforming Your Relationship with Money and Life (New York: Norton, 2017), 6. [↩]