Finances and Mental Health: How to Stop Stressing About Your Spending

Wells Fargo Head of Advice and Planning Michael Liersch and Meghaan R. Lurtz, Ph.D., Professor of Practice at Kansas State University who is also the former president of the Financial Therapy Association, join Yahoo Finance Live to detail the best strategies to balance your mental and financial health, how to manage the guilt and stress related to shopping and find joy in small purchases or experiences.

Video transcript

Well, with the looming recession, debt ceiling date X, and rising interest rates, there’s a lot to worry about right now. In a recent Bankrate survey, 52% of American adults said money negatively impacts their mental health. It’s up 42% last year alone. As Mental Health Awareness Month draws to a close, let’s take a closer look at how people can manage their financial stress. Now joining us is Meghaan Lurtz, a Kansas State University professor and former president of the Financial Therapy Association. And Michael Liersch, who is the head of advice and planning at Wells Fargo.

Meghaan, I want to start with you. I mean, money is one of those perennial things that we think of as a concern. What is this number one piece of advice you give people to try to cope with that stress?

MEGHAAN LUTZ: Well, I think that’s an important thing. So we often think about how to fight, flee, freeze. And fourth, there’s another F word. And it’s flock. When we are stressed, we tend to do it anyway. Call your… had a long day, call your spouse. Your spouse can’t really fix your long day, but it’s nice to diffuse that stress a little. Share it with someone else.

Money is often a difficult thing to talk about. But what makes it 10x harder is when we keep it all inside. When we try to hold onto stress on our own and try to hold onto that anxiety on our own. It just feels more insulating. And so one of the best tips would be to talk to a spouse or partner. Talk to your mother.

Or hopefully you are working with a financial professional, a financial professional of some sort. Whether it’s a CPA or a financial planner, give them a call. Talk to them. They’ve seen the markets do crazy things before. We have all sadly been through a recession. We have all experienced a rise in interest rates. We have all had many of these experiences before. And so just talking to someone else, spreading some of that stress with another can be really, really powerful.

DIANE KING ROOM: Michael, I want to involve you in this. Diana here. So she lets me ask you about some of the suggestions that you would bring to the table, and come on– I want to touch on some more practical suggestions. I think you need to talk things out, you need to bring things out into the open and you can’t stick your head in the sand. Especially since some of the things that stand out in particular in this survey of bank rates are concerns about inflation. Despite a strong job market, there are also concerns about job stability.

There were also… I mean just concerns about paying for daily expenses. This is the inflation piece. Debt, housing, etc. Not just having enough, even for discretionary spending. So what are the top three things you would tell Americans et cetera, about managing this stress.

MICHAEL LIESCH: The first is to really ask yourself if you need to doomscroll on your mobile device. So, to your point, we did a survey at Wells Fargo last year, where we asked people what are you doing when it comes to tracking your financial life? And a lot of people are just going on their mobile device and looking at the markets, looking at their account values ​​and doing what is called doomscrolling. And waiting for, say, the next shoe to drop.

So I’d encourage everyone to say, instead of focusing on what’s in your control, what are the little things you can do to make your financial life more sustainable. Or to the points that have been made, less anxious. So when you think about it, there are three key things I’d like to highlight. The first is to really think about how you are spending your money which is optional.

And that optional money, is it really in demand right now? Or you can allocate it more, in your point, to those more essential items so you don’t feel stressed about the gas prices you’re paying or the groceries you’re shopping for. The second thing is really to the point of not going alone with a spouse or partner, in terms of talking about money. Don’t go alone with your family and friends.

I really wonder if it is necessary to buy those gifts for those events. I really wonder if you need to go out to dinner. Really think about how you can get together and do things in a very, let’s say empowering way. And you see that in TikTok right now there are second videos where people are talking about these things very openly. Tens of millions of people. So let that social power you have encourage you in a positive way to get the most bang for your buck.

And the third thing I’d really suggest people do is really think about where your money is coming from and how much you’ve made. Think about where your money is and how much you have, and then think about where your money is going. That is, what you’re spending again on essentials versus more discretionary or optional things. And see if these things all match.

It means that if you are spending more than you have in income, really consider how you can make very small changes. Then renegotiate your streaming services. Renegotiate think of it as a traditional cable. Whatever it is, see what you’re paying for your phone, your family’s prices. Call those services and say, hey, I want to become a customer or stay a customer, and can you give me a price break. And those small incremental changes can actually reduce anxiety and put more money in your family’s pocket, in your pocket.

Yep, some great actionable suggestions there. Meghaan, I want to bring you back to this situation. One of the things, we’ve talked a lot about anxiety. I also want to talk a little about guilt. Because there’s been this kind of storytelling for a while. Oh, just don’t buy your coffee every day and you’ll be fine. But people appreciate those little things. And then there’s this guilt when you do those little things. So how do you handle it?

MEGHAAN LUTZ: Yes. First, I think it’s helpful to distinguish between stress and anxiety. They are often co-morbid, occur together, but are themselves different. Stress, that’s why stress occurs in some people and not in others. It is an external force. Like something happened on the outside and you evaluate, can I handle it or not? And if you can’t, stress arises.

Anxiety is more of an internal thing, which can come from having had stress and therefore being worried about the future. And as for the guilt, and sort of shame spending and stuff like that that we see. Cut the coffee and stuff like that. This makes people so unhappy and makes them very unhappy with their lives. And so I think it’s more useful to go into research about happiness and what makes happy people.

There was a great book that just came out of Harvard psychologists, it’s called The Good Life. It is based on their longitudinal study. And you should read the book, the book is great. But if I could sum up the book in one sentence, it’s about having experiences with people you love and who care about you. And so if I have a cup of coffee — I’m one of those people, I have it right here. I have to have a cup of coffee every morning. And my morning is usually with my kids, in my bed, having a cup of coffee. And it brings so much contentment into my life.

And so if you need that moment in the morning with your cup of joe, please have it. Don’t let that be the thing that limits you. These are really important moments, which can actually reduce anxiety, help build self-efficacy. It just helps you feel good to start your day. When you have to start your day with, well, I can’t go to Starbucks, and now I have this journey that I have to continue. And I’m angry about it. Well, when you get to the office, you’ll wonder, where are the cookies. I no longer have self-control, because you are so tired of trying not to have your coffee.

Sort of perpetual or groceries, you’ll take yourself out to lunch because you couldn’t get coffee. So if there are things in your life that bring you joy, they are part of an experience that helps you calm down. Experiences with people, I thought the previous suggestion of not necessarily going out to dinner, but could there be a way to cook with friends and family at home? You know, we love to eat, we love hot drinks.

I think keeping these things in mind, when it comes to an experience, don’t take them away. It just creates or perpetuates a kind of lack of self-control that you’ll have later in the day for maybe the harder stuff. I’d rather people get a $3 cup of coffee or a $5 cup of coffee than a $25 lunch.

DIANE KING ROOM: Well, it’s not three or five at Starbucks anymore. It was once. It used to be $4, now it’s $6 more. And I will say personally, I’ve done this before. Completely cut out… I cut out Starbucks for a year. A whole year because it was just one of those things to me I love my caffeine in the morning but I just found a cheaper way for a little bit. I’ve been back to Starbucks, not every day now.

Michael, I want to get you back into this situation real quick, and I just want to ask. We’re in for a big spending weekend, which could end up causing some people stress when they look back, what happened this weekend? Where did the money go? What is your advice for people who are preparing for this early summer weekend?

MICHAEL LIESCH: I think the biggest piece of advice I would give to people is really to be intentional. And that’s what we’re talking about here. When it comes to happiness, when it comes to stress, when it comes to anxiety, whatever those feelings are, be really intentional about what brings joy to you and your family. And focus on spending versus those things that are bringing you joy and the people you are surrounded by with joy. So that would be my top tip.

The second piece would be anytime you can bring your whole family on a weekend like this to the table around what are you spending and why, it will only make that conversation easier moving forward. So use this as an example. How much do you spend on that barbecue? Who are you inviting? Can you afford it?

And that sort of thing gives you energy and your family energy to think more intentionally about the future and more collaboratively. So you are all together. And to the point of making things funny rather than unfunny. Make it a family gathering. Make it fun. Talk about money, talk about how important it is for all of you to feel good, safe and financially secure. And make it a family affair.

Yes, that’s a really good point, that money for a long time hasn’t been something you talked about. And I think openness is a really important point. Meghaan Lurtz, Kansas State University Professor of Practice and former President of the Financial Therapy Association, and Michael Liersch, Wells Fargo Head of Advice and Planning. Thank you both and good weekend to both of you.

MICHAEL LIESCH: You too, thank you.

#Finances #Mental #Health #Stop #Stressing #Spending

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