Top 10 Financial Moves To Reduce Stress And Anxiety
Top 10 Financial Moves To Reduce Stress And Anxiety
Published: 05/15/2023 by Financial Samurai
I realized something important after writing about the best reason to retire early. Money doesn't buy everlasting happiness. However, having more money can reduce stress and anxiety. The goal of achieving perpetual happiness is not realistic. Happiness ebbs and flows. It's more exciting to be an 8 out of 10 on the happiness scale because there's still upside. You're already happy enough. But the thought of experiencing even greater happiness gives you more reason for being.
Life gets complicated as we get older. The responsibility of taking care of a family, experiencing declining health, and worrying about the future can suppress the mood of even the happiest person.
Therefore, I thought it wise to highlight the top financial moves you can make to reduce stress and anxiety. With less stress and anxiety, not only will you feel happier, but you'll also be less envious, less angry, more patient, and more empathetic.
Top 10 Financial Moves To Reduce Stress And Anxiety
Here are the top 10 financial moves I've made that have brought me the greatest stress relief. I've ranked the financial moves in order of least to most impactful. I use just two variables to determine the order of the rankings:
How easy the financial move is to do
How much stress and anxiety relief each financial move provides
10) Saving up at least six months of living expenses
At the minimum, every household should have at least six months of living expenses in cash or risk-free investments like Treasury bonds. With interest rates so high, investing in 3-month-to-1-year Treasury bills makes a lot of sense today.
After you have about six months of living expenses saved up, the stress relief you feel may start to wane. Depending on economic conditions, investing FOMO might take over as you feel your cash could be making a greater return.
Once you've got a 6-month financial defensive shield up, you will feel more confident to tackle the world. A perpetual cash buffer should quickly be automatic.
9) Tracking your net worth in one place
Tracking your net worth in one place is like jotting down your to-do list or writing a grocery list before going shopping. Once it's written down, you feel less stress and anxiety about forgetting to do something.
I've been tracking my net worth with Personal Capital, now called Empower, since 2012. It feels great to link up and manually input all my accounts so that they are never lost. I have actually forgotten about financial accounts before.
Due to investing in multiple private funds, it's also hard to keep track of all the various contributions. It also feels good to delete financial accounts that are no longer applicable. For example, every time I pay off a mortgage, it feels wonderful to remove the debt account from my net worth.
8) Putting together a death file
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