Money is, by definition, a tool to expedite trade. At some point in human history, someone decided it was easier to carry metal coins to the market than bartering chickens for textiles. Money was born and agreed upon as an acceptable unit of trade.
By its nature, it retains no moral or immoral attributes. It only makes trading goods more convenient. If I have enough currency to provide for my basic needs, it should not be a source of pain or anxiety in life.
Unfortunately, this is not typically the case. According to a recent study, Nearly three out of four adults reported feeling stressed about money at least some of the time. Despite living in one of the wealthiest nations in the history of the world, money continues to be the top source of stress in American’s lives.
This juxtaposition is fascinating to me. And I think it is important to understand why that is the case.
At the outset, I should mention money is a complicated conversation. There are very few specific realities that can be blindly offered—especially to such a vast and varied community as this one.
We vary in many ways:
Financial Standing: Some of us live with excess, some of us in debt. Debt, by its nature, brings anxiety and worry into our lives. And overcoming stress completely can be difficult until we get out from under it.
Income: Some earn a living well above our needs, some specifically allocate each penny for budgets to align, and others fall further and further behind.
Socioeconomic Background: Some of us grew up with plenty, others with very little. These backgrounds reflect themselves consistently in our expectations. James Altucher once famously wrote that he felt poor with less than $10 million in the bank, while most of us would never dream of having that much. Our backgrounds greatly influence our expectations.
Cost of Living: Becoming Minimalist readers are scattered all across the globe with various costs of living. Some live in areas where the cost of living is high (New York City) while others live in places where money can buy much more.
World/Religious Views: Our views of the world and humanity greatly influence our understanding of money. Sometimes these views offer peace, sometimes they bring guilt and shame, while others pile additional stress and anxiety on our lives.
Committed Relationships: There is little shock when people first hear that money is one of the leading factors in divorce rates. When two people with differing personalities and backgrounds come together in the same family, there is almost always some friction. And friction in our most valued relationships naturally results in a level of anxiety.
Consequences from Decisions: Some financial decisions take years and years to overcome. One foolish shopping spree in our twenties may still haunt our credit score today. Even if we are responsible spenders today, we may still be feeling the ill-effects of less-wise choices from our younger self.
Because of these variations, specific thoughts about money are almost impossible and sweeping generalities must be personally evaluated before they can be applied.
But as I consider the evidence, I see two main reasons that almost 75% of us experience money-related stress: 1) We wish we had more; 2) We spend as if we already have more.
1. We wish we had more. There are any number of reasons why people want more money—sometimes those reasons are healthy, sometimes they are unhealthy. Certainly, the possession of money is not contrary to a simplified life, but a simplified life is not possible if money possesses you. Those who love money can never be satisfied. They will never own enough. They will always desire more. And those who desire to be rich carry the weight of that burden every day. It will always hold hostage your thoughts, your attitude, and your actions. It results in extra stress. When the love of money is present, freedom is not.
2. We spend as if we already have more. Another significant reason for money-related stress is the propensity of so many to live beyond their means—going into debt by spending more than they earn. Sometimes this is a result of poor management or unexpected emergency expenses, but most of the time it is a result of excessive consumerism.
There aren’t necessarily easy answers for overcoming the reasons above. But at the very least, demystifying and labeling the reasons for our financial anxiety moves us one step closer to overcoming them.
What do people here think about paring down in the area of insurance? My husband and I are very risk-averse and have just about every type of insurance under the sun. We max out our coverages, too, although this is offset by our high deductibles, but still. I feel as if this has almost become a compulsion for us. But we need all that insurance, right?
Just to be clear, this is what I’m talking about:
(1) Whole life on him (retirement savings, so this probably doesn’t really count)
(2) Term life on me
(3) Large amounts on our auto insurance
(4) Maxed out homeowners insurance
(5) Umbrella insurance
(6) disability ins on him
(7) flood ins (not required)
(8) earthquake ins (not required)
(9) health insurance
You are so right about Target. I used to go in every week and spend spend spend. Now I never go there. Don’t even really like their clothes. I have saved so much money. Good advice to cut a store out of your list.
mary in Texas says
When my husband and I retired, I worried about whether we would have enough money while he was totally unworried. I thought it was just because I had always paid bills, etc. As time went by I discovered that we had so many fewer expenses due to not needing the clothes, meals out, etc that we had no more problems than before. As the years have gone by we have required less and less; the only increase being in medical care. Most of this goes to preventive care since we have a healthy diet and get exercise regularly. We save money for major purchases and have a paid-for car and a mortgage that will be paid in a few months. We have hobbies, contribute to church and charity, and enjoy occasional meals out with family and friends. We can make Christmas and birthday contributions to our grandchildren’s college funds. We can’t imagine spending a lot of money on anything. My husband dislikes much travel; so vacations are usually long weekends at interesting places rather than marathon trips that require huge amounts of time and money. We have a cushion for emergencies and can save more with a little planning. A simple life makes good sense in both comfort and lack of worry.
Tiffany @ HappyThankfulHopeful says
I loved how you break down how we vary in many ways – great reminders to see all the things that factor into how we see money.
While we could potentially live off my husband’s income (albeit after sacrificing some luxuries such as annual trips abroad, meals out, etc.) only one of us is comfortable with the sacrifice while the other feels they are accustomed to a certain standard of living.
However I’m on mat leave and just had one of the best, most productive, most fulfilling days of my life…and it’s making me realize that while having well-paying jobs can potentially reduce financial stress (potentially, because it depends if you’re still wanting more $), well-paying jobs can also deplete other resources like your available time, your mental capacity, your emotional well-being…while you can’t put a dollar to those things, I certainly value them more than the frills extra $ has provided.
Thanks for the reminder that money stress is often created by ourselves (by wanting more). If interested, feel free to check out my recent post describing a day I earned no money, but felt more productive and fulfilled than ever before.
New Post: Wouldn’t you like to re-energize your soul everyday?
John P. Weiss says
Yes, many folks desire more money yet spend beyond their means. A certain amount of money helps ease worry for things like health care costs, unexpected expenses, etc. But overconsumption weighs people down.
What I love about minimalism is how it frees us. We can let go of ego, competition, and the stress of accumulated stuff. Less truly is more. Thanks!
Linda Rouse says
Your articles have always been a help. I had no choice but to become a minimalist. It has been a eye opening journey, I am 77 lost all my money to a Ponzi? I think its been 8 years and my husband left me after 31 yrs for a younger woman and took what I had left.
Have sold all my jewelry, some clothes a trailer, furniture, and in three weeks another sale, antiques furniture, etc, so getting sparser and sparser and I actually like it. less to think about .
Pete Williams says
I’ve reached the point where I think in terms of time rather than money. How much time does someone need to devote — through work or successful investing — to afford that car/house/lifestyle? Wouldn’t I rather have a lesser, though more than adequate, car or home, which likely requires less maintenance? I could work longer to afford more. But why give up my most previous asset?
Jeffrey Pillow says
One way my family eased financial stress, and this is something you touched on a few months ago in your Target post, was a conscious decision not to shop at certain stores — Target being one of the main culprits.
We were spending, as you say, as if we actually had more. We didn’t. We were in the red.
It took some time to get my wife on board, but since doing so we’ve saved a small fortune.
The thing about stores like that is, they just want to get you in the door. Once you step foot in, they’ve won.
Sure, a lot of things are cheaper so why not go to Target? You’ll save money. The big lie they and we tell ourselves. Not so fast.
Stuff you didn’t know you wanted until you were there. That’s how they make their money and how you lose yours.
Could be anything really. So many choices.
That’s advice I would offer. What store is your weakness?
Now, don’t shop there.
Another good one: not allowing yourself to go down the middle aisles of the grocery store except for toilet paper and coffee.
Instant money saver.
Like you said, Joshua…there aren’t any easy answers. Everyone’s situation is different.
I am blessed to never have gotten in trouble with debt with never having more than a mortgage and one car payment. I can probably thank my parents who ingrained this in me. However, minimalism has pointed out the freedom and discovery that comes from truly considering what I need verses want, what brings joy verses a temporary fix.
Focusing on acquiring memories verses things has really given a perspective to purchases. I still falter and buy things for the wrong reasons but find I am returning many purchases as I grow in this mindset.
Minimalism has also brought a newness in my spiritual walk that is more pure. Getting the clutter out has helped me focus on the important.
Thank you Josh for allowing God to use you in this way.
Very interesting. I’m about to start university, meaning it’s time to get to grips with money and it’s already proving very stressful.
Kalie @ Pretend to Be Poor says
I agree that the love of money and desiring to be rich are a cause of financial stress. Many people may not realize that’s their desire, but the constant search to acquire more possessions, comfort, or savings/security can reveal a heart that loves money.
I’d add, on the point about most debt being due to excessive consumerism, that student debt is possibly an exception. However, I’ve seen many (and was among them at one point) pay the minimum while spending on materialism, rather than paying them off quickly by living simply.
Thanks for this post Joshua. I clicked because I do have stress when it comes to money like most people but you’ve provided some useful and insightful points here.
Luke (Dollarwise) says
Thanks for your thoughts Joshua.
The human heart is a strange beast. I noticed that you didn’t offer an answer to the abundant love of money and things in our cultures (I’m an Aussie).
By way of adding to the conversation, I think you need to begin to grasp the ways that money controls our hearts. The love of money is rooted in a love of what we think money can do for us at the level of our deepest desires. Namely, things like happiness, security or status. Deep down we believe money will give us these and hence we love it, chase after it or the things it can buy. It controls us by first controlling our hearts.
So if you can convince yourself of the lie that money gives you these things it goes a long way to severing it’s control over you and in turn the stress you feel. The next step is to replace the lie with something better. You can check out more of my thoughts on this on my blog, see ‘a philosophy of money and how it controls you’,
Brian Robben says
There’s definitely an interesting dynamic going on between money and freedom. Enough money can certainly buy freedom, but you also can’t obsess over money or you’ll never gain that freedom even if you become a billionaire. It’s all about your mindset toward money in my opinion, and not becoming a slave to it.
Stephen @ Thoughtful Growth says
Hi Joshua, great analysis as always!
Thanks for pointing out so many factors leading to our perspective of money. Perhaps I’m just naive (probably so!), but hadn’t considered how relationships and religion affect how we see finances.
Reading your two reasons for money-related stress reminded me of a book I finished yesterday–Cheap by Ellen Ruppel Shell. The book talks about how discount culture encourages consumerism. Specifically, cheap versions of formerly expensive items make us believe we need them.
The continual focus on bargains and cheap merchandise hurt consumers in the name of helping them. Stuff is cheaper, which makes us want more of it.
Like you wrote years ago about owning higher quality things, it’s better to own something that will last, even if it’s more costly.
Thanks again for the article.
I can definitely relate to paying for the consequences of some REALLY bad decisions in my youth, however I have now been fortunate enough to clear all bar the mortgage and have discovered through taking a purchase pause I can be more generous than I thought was possible. I’m now considering what I’m ‘voting’ for when I make purchases: is it ethical? is it fairtrade? etc. This is obviously after I have worked out if I actually need to be making the purchase!