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How to Manage Your Money and Reduce the Stress

Have you ever heard these words? “Control what you can control.” It’s easy to say but this year, far harder to put into practice.

Among employed adults in 2020, 68% report their job or employment has been negatively impacted by the coronavirus pandemic. Nearly 2 in 3 adults (64%) say that money is a significant source of stress in their life. These stats are according to the American Psychological Association, October 2020. 

Now, consider that in 2017, this statistic on stress and money was just 2% lower at 62%, according to the American Psychological Association. In fact, reports on money and stress have had money at the top 1 and 2% of common sources of stress historically.

So, back to those words…”control what you can control.” Let’s change this to “make decisions with intention.” We’ve seen it many times. The simple act of being more intentional with your money and thoughtful can make a huge impact. Without intention, unexpected job changes, bills, or even changes in investment markets such as we’ve seen this year can become more worrisome. 

When you are intentional with your money, it can help to reduce the day-to-day stress.

Being intentional means you are aiming and planning for today and your future with your money. But how do you begin to be more intentional? 

You can begin by putting your intentions into action. The simple action of automation can make a big impact. Automating your bill payments and your savings is a great way to start being more intentional. Or, if you’re already doing this, consider re-evaluating what you have or have not automated and go all the way! Automate every possible bill, and include that savings component. You can automate your personal savings by essentially paying yourself first before any discretionary money is used.

The mindful assignment of your money toward your values and goals is also a big part of being intentional. It allows the dream of leaving a legacy to become closer to a reality. How? Because you put your plan into action rather than just thinking about it.

But there’s more than just action to a good financial plan… 

Before you put your intentions into action, you’ll want to be armed with answers to the following top questions:

  1. Am I saving enough?
  2. Am I saving in the right buckets? Roth, Traditional IRA, 401k?
  3. I have several accounts yet I’m not sure if I’m invested appropriately for what I need? Am I taking on too much risk or too little?
  4. How much should I save for my kids’ college education and should I save in a 529 account?
  5. Do I have the right amount of life insurance?
  6. Should I pay off my debt or invest in my 401k?
  7. Should I sell some of my stocks because of the market volatility?
  8. Are my assets properly protected?
  9. Am I leaving a legacy that my family can understand and appreciate?
  10. I’m saving, but am I doing the right things financially?

Were any of these questions on your mind prior to reading this? They are all individually and collectively significant. Answering these top questions is at the heart of intentionally managing your finances, yet it’s not all. To find these answers you must know where you’re going.

So, where should you start? 

Begin with the end in mind and put together a financial plan to go along with the plan for your future. When done properly and with intention, financial planning should begin by figuring out your aim in life, your goals. Then, answer questions like our top 10, and save and invest accordingly. 

The knowledge you gain through intention is what helps to make your path less stressful. Just thinking about your own personal values in life and then putting those values into practice along with considering your goals, your path in life, that’s intention. Then, with the knowledge you then have about where and what you want to do in life, you connect your money to those intentions. 

Get a partner.

Choose a financial partner, a financial planner that uses not just investments but works with you to create your plan, which will be the foundation of everything else financially. Within that plan you should have the opportunity to model different outcomes, market changes and risks to your plan, and properly determine your “risk budget.” Once you have your intention firmly in place, confidence comes with it. Then, the saving and investing you do intentionally is also done with less stress and peace of mind.

 

Important Note: The views expressed in this post are as of the date of the posting and are subject to change based on market and other conditions. This post contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected.

Please note that nothing in this post should be construed as an offer to sell or the solicitation of an offer to purchase an interest in any security or separate account. Nothing is intended to be, and should not be taken to be, investment, accounting, tax or legal advice. If you would like investment, accounting, tax or legal advice, you should consult with your own financial advisors, accountants or attorneys regarding your individual circumstances and needs. No advice may be rendered by Lenity Financial, Inc. unless a client service agreement is in place.

Sources:

https://www.apa.org/news/press/releases/stress/2020/report-october

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