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.
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.
Hi Joshua,
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.
Cheers,
Tiffany
https://happythankfulhopeful.wordpress.com
New Post: Wouldn’t you like to re-energize your soul everyday?
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!
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 .
Linda
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?