Financial stress is brutal, so let’s call BS on it!
Whether it comes from stressing about your finances, worrying about how the credit card debt is going to get paid, or watching how far behind you are on your rent or mortgage payments, one of the most harmful and longest-lasting effects of financial stress is that it can wreak havoc on your confidence.
When financial stress mounts, it’s easy to become insecure about how you spend your money, and it can cause you to constantly second-guess every financial decision you make.
So, what can you do about it?
When erasing your debt in one fell swoop isn’t an option, how do you manage your financial stress so that you can hold onto your confidence?
It’s more than just constantly reminding yourself that you’re beautiful and successful, even if you are in debt.
Here’s the bottom line: In the end, it really is just a matter of mind over money.
To help you get started, together we’ll dive into some of the most common ways financial stress can slowly chip away at your confidence, and what you can do to combat it and still feel confident, even when bills continue to stare you in the face.
Break The Budget
Budgets are meant to inspire confidence. They’re the guidelines you set forth and use to keep you on the right financial track. They’re meant to keep you from overspending and drowning you even further in debt, so you can make financial decisions with confidence.
But budgets can backfire, because when you do end up overspending and going outside of that budget, guilt soon follows.
The guilt that you went out with the girls for a night out that you really couldn’t afford, or guilt that you had to make that major furnace repair expense – even though it’s the middle of winter and you had no other options.
When you fail to meet the standards of the all-mighty budget – the budget that you created – it’s easy to blame yourself, feel guilty, and lose confidence.
This is where remembering the “mind over money” concept is important.
It’s simple. Get rid of the budget.
Budgets are only good for one thing – making you feel guilty that you can’t stick to something as “simple” as a budget.
Instead, Pay Yourself First at the beginning of the month and then spend whatever is left (as long as you don’t go into any more debt)
Most people try to stick to a budget so that they can have some money left at the end of the month to put into their savings.
This simply does not work, and only makes you feel worse.
So instead, choose an amount to save at the beginning of the month.
This is the concept of paying yourself first, before you spend any money paying the butcher, baker, or candle stick maker.
The way to do this is, 72 hours after your pay check lands in the account, an automatic transfer needs to be set up to take a portion of that money and place it into another account that cannot be withdrawn from.
Again, this “no withdrawals” account is for your Future Self, it’s not ear-marked for anything, except for the future. This is the only way to make sure you’re paying yourself first and not last.
After that “Future Self” money has been set aside, the remainder that’s left in the first bank account (the account the paycheck went into) is to use however you want. This means that this money is to be spent on those expenses such as bills, groceries, or whatever else you need.
The only rule for this remaining money is that it cannot be used on consumer debt, which will only sap your confidence.
Budgets are only good for one thing: making you feel guilty.
And while the “Future Self” account is a new approach, it’s an important one that can help you get ahead, stop feeling guilty, and really get ahead by paying yourself first.
To learn more about this concept and how much you need to Pay Yourself First, check out the Financially Fit Bootcamp offered by MindShift.money. This course can help you gain a new perspective on your finances, and get rid of financial stress once and for all.
Confidence-Crushing Credit Card Debt
Credit card debt is one of the worst kinds of debt out there, especially when it gets out of control.
The amounts get so high people can only make the minimum payment, so the outrageously high interest rates compound month after month, and soon the total amount of debt is so far out of reach, people think they will never get rid of it.
Add to that the fact that when you use a credit card you don’t have to pay for the purchase immediately, making it all too easy to view credit cards as “free money”.
When the debt becomes too high, it quickly crushes one’s confidence, but that doesn’t mean you can’t get it back.
The key here is to change the way you view credit cards.
Instead of viewing it as a future expense that can be paid “whenever”, think of your credit card as your saving account.
Are you willing to dip into your retirement savings for that purchase? Would you forfeit your emergency fund for that purchase you’re about to buy? Putting things into perspective while you’re standing at the cash register, or just before, can help you prioritize, say “no” to unplanned spending, and get your confidence back.
But credit card debt that you already have doesn’t go away just because you’ve changed your thinking about credit card spending.
A credit card debt repayment plan is crucial to getting your confidence back, because nothing makes you feel more secure about your own finances than seeing that debt amount lowered month after month.
But there’s still a change of thinking that has to happen here, too.
This is because it’s easy to think that making a huge payment towards your credit card debt will get it lowered more quickly, and it might. But what happens more often is that people put all of their extra money towards credit card debt, only to go back to that same card when they run out of cash to pay for small expenses.
Rather than this counterproductive method of paying off credit card debt, it’s better to choose a certain amount each month that you will not spend that month. Let’s call that your surplus.
Now once you have chosen that amount, you put it aside no more than 72 hours after you receive your paycheck.
Then you allocate 2/3 to killing your debts and 1/3 to paying Paying Your ‘Future’ Self First and beginning your path to Financial Freedom.
That way, as you kill your debts and see them increase, your wealth and savings for your future will be increasing in the background. Until one day, you turn your head and start to walk taller as you focus more on the huge savings you are building and less on the debt you are paying off.
Speaking of Freedom or retirement, those dreams of Freedom 55 are getting further and further out of reach for most people.
It’s costlier to live today than it was in the past and the expenses in each household only continue to grow.
Most people are feeling like there is less to put away for those retirement days, and that can leave people feeling insecure and less confident about their future.
So how do you combat time? How do you feel better about that “approaching day” when you don’t feel the least bit prepared for it?
This too, just requires a small change in thinking.
Maybe you can’t retire at the age of 55. Maybe you won’t even be able to retire at 65. The problem is that most of us still think that this is not okay.
We have to retire at a certain age, but why?
When today’s life expectancy is longer than ever before, there’s no reason to think you have to stop working by the time you’re a certain age, or that you have to have millions of dollars when you do retire.
You really only need enough to cover your basic expenses, with a bit of wiggle room for living and having a bit of “fun” money.
And you don’t need to stop working just because a particular day on the calendar arrives.
Besides…if you love what you do then you really aren’t working at all, right?
There is a quote from Confucius that applies here: “Choose a job you love, and you will never have to work a day in your life.”
However, what happens when the inevitable day arrives that you can no longer work anymore?
When you physically, mentally, or emotionally can no longer trade your time for money?
This day arrives for every single one of us, and you will need to have financial independence when this day comes so that you can continue to cover your financial needs.
Otherwise, you will be relying on family, friends, government, or charity.
This is what most people call retirement and where most financial experts will now have a conversation with you about building a nest egg to retire on.
However, my MindShifting belief on retirement is a little different and perhaps even controversial.
Retirement is typically seen as the age at which you ‘stop working’ and live on a net savings or cash bucket you have built during your working years.
However, I view retirement (by the definition above) as Willy Wonka’s Golden Ticket to Death.
A little harsh I know, but let me explain.
In my opinion, if you are wanting to stop working and start living on a nest egg or a lump of cash you are just counting down the days until you die, hoping and praying that the day you die is sooner than the day your nest egg reaches 0.
Instead, why not have Financial Freedom?
Financial Freedom is the ability to have money coming in from cash-flow producing investments that cover your monthly expenses each and every month, without requiring your time, effort or energy. Now you are free for life – the longer, the better!
Check out an article on MindShift.money from my business partner Tony Pennells on exactly what steps to take to create this and Invest for Cash Flow.
Suffocating Student Loans
It’s quite obvious the way in which student loans can affect your confidence.
When you graduate with $30,000 to $60,000 worth of debt from student loans it can be easy to think that you’ll never pay it off, or you’ll never be able to purchase a home or have a family.
Student loan debt can make you feel insecure about living a good life, before that life has even really begun.
Because student loans can take decades to pay back fully, it can be difficult to even start to think about getting your confidence back during that time – but that doesn’t mean you can’t do it.
It’s all a matter of focusing on what your student loan gave you, rather than what how much you owe.
Focus on the return on your investment in terms of the education you received, confidence you gained, life experiences you had, friends you made and much more during your student years!
Planning Your Death Is Not A Damper
Nothing wreaks havoc on one’s confidence more than talking about and planning for death, which is why so many people put off estate planning.
It’s unpleasant to talk about losing family members, and divvying up or selling off their assets.
And when it’s your own estate you’re making arrangements for, it can be even more depressing.
Not only are you talking about death and loss, but also things like debt, and how finances are going to be managed.
But it’s this exact planning that can make you even more confident.
This is because so many people view estate planning as focusing on things that can’t be controlled, but in fact it’s just the opposite.
When you start to create answers for the inevitable, no matter how unpleasant, you put yourself back in control.
Once you know how your bills will be paid, who will be making decisions concerning your health and finances, and who will be taking care of your children, the fear of the unknown simply vanishes, because you now have the answers to the questions you’ve simply been too scared to ask. And there’s no better way to boost your confidence than that.
We want to help you feel confident on the inside, as well as on the outside. With these tips for getting financial stress under control, you’ll feel even more confident and be able to tackle whatever the world – or your finances – throws at you.
Makaylah Rogers is the co-founder of MindShift.money. She is a Thought Leader for her generation, teaching people how to rewrite their “money rules.” With an extensive background in wealth building and personal development, Makaylah’s path has taken her into executive roles in various fields including launching startups, real estate sales and motivational keynote speaking.