2751: 7 Ways to Tame Financial Stress for a Wealthier Future by Kathleen Coxwell of New Retirement

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[00:01:11] 2751. Seven Ways to Tame Financial Stress for a Wealthier Future by Kathleen Coxwell of

[00:01:19] newretirement.com. And I'm your host and personal finance enthusiast, Diana Merriam.

[00:01:25] I'll keep this intro nice and short. So let's get right to it as we optimize your life.

[00:01:34] Seven Ways to Tame Financial Stress for a Wealthier Future by Kathleen Coxwell of newretirement.com.

[00:01:43] When most people think about financial and retirement planning, feelings of stress,

[00:01:47] worry and anxiety rise in our chests and throats. Thinking about your financial future is stressful,

[00:01:53] whether you are well prepared with millions in the bank or have not saved nearly enough and have no

[00:02:00] clue about managing your money. However, this stress, while unpleasant, exists for a good reason.

[00:02:07] It serves a purpose. And the really good news is that there are ways to use financial stress

[00:02:13] to your advantage. Number one, understand that avoidance is an evolutionary reaction to threats,

[00:02:20] but not effective for financial stress. Emotions, even negative emotions, have a purpose in our

[00:02:26] lives. Envy can help drive you towards goals. Anger can enable you to prevent exploitation.

[00:02:34] Stress, anxiety and worry can help you exert caution and discipline. Even though stress,

[00:02:39] anxiety and worry can be positive, most of us have a negative and not very productive reaction

[00:02:45] to stress. When we feel stress, our body is pumping chemicals into our bloodstream,

[00:02:51] and those chemicals typically drive us to a fight or flight response. We fight to try to

[00:02:57] extinguish the perceived foe, or we flee to get away or hide from the threat, particularly common

[00:03:04] when it comes to money. Fight or flight is an awesome defense against immediate threats.

[00:03:10] Our brains developed the fight or flight reaction to protect us from real dangers,

[00:03:15] like snakes hiding in the grass, a leopard leaping at us from trees and other wild dangers.

[00:03:21] However, these reactions are usually completely inappropriate for long-term threats,

[00:03:27] like future financial peril. Hiding from your money issues does not protect you,

[00:03:32] it just makes things worse. If you understand that your fight or flight reaction is an

[00:03:37] understandable but wholly inappropriate reaction, you'll better overcome avoidance and anger.

[00:03:45] 2. Change your perception of stress. University of Rochester psychologist Jeremy Jamison has proven

[00:03:53] that the mere belief that stress can be useful can in fact improve your outcomes. In one experiment,

[00:03:59] a group of students were preparing for an exam. Jamison told one group that stress can help you

[00:04:05] rise to the occasion of the test. He told the other group to just focus if they get stressed

[00:04:11] out. The group who were told that stress is enhancing did significantly better on that test,

[00:04:18] and subsequent tests, than the group that was told to focus. Your mindset can actually impact

[00:04:24] how stress impacts you. Stressed about finances? Remind yourself that the stress is there for a

[00:04:30] reason and let it help you deal with the issues. Stress is there to help you rise to the occasion

[00:04:36] and take action. 3. Connect with others. Kelly McGonigal is a psychologist and lecturer at

[00:04:44] Stanford University. In her TED talk, she teaches us that you can eliminate the harmful impact of

[00:04:50] stress. One study from the University of Buffalo found that you can reduce or even eliminate the

[00:04:56] damaging aspect of stress by spending time helping loved ones, friends, or neighbors. McGonigal said

[00:05:04] when you choose to connect with others under stress, you can create resilience.

[00:05:11] If you're stressed about finances and retirement, try reaching out to friends and family to talk

[00:05:15] about it. Offer them your best tips and commiserate and problem-solve. If you're not

[00:05:21] comfortable talking about finances with people you know, join a Facebook group or talk with a

[00:05:26] financial advisor. 4. Acknowledge your stress. Too often, we don't actually acknowledge big

[00:05:34] long-term stressors like money issues or a looming retirement. Finances can be an abstract and

[00:05:40] convoluted concept. However, your future financial security is probably gnawing at you. If you can

[00:05:48] acknowledge and label any stress you feel, then your brain activity will actually shift and go to

[00:05:53] work dealing with it. Researcher Matt Lieberman used brain scans to illustrate how recognizing

[00:05:59] stress can make you more reactive to tackling problems. In one study, participants were shown

[00:06:05] negative images. When they were asked to acknowledge and label the emotions they felt

[00:06:10] when viewing the picture, the activity in their brains moved from the emotional part of the brain

[00:06:15] to the prefrontal cortex, the area where we consciously think and plan. 5. Start small.

[00:06:23] Tackling how to fund the rest of your life is a gargantuan undertaking. However, you can break

[00:06:29] it down into more manageable and achievable chunks. For example, maybe you want to save an

[00:06:34] additional $250,000 over the next 10 years for retirement. That sounds like a lot, but if you

[00:06:41] make that goal more immediate, like what you need to save each month, the goal becomes a lot more

[00:06:46] actionable and achievable. Planning your entire financial life is indeed a massive task. And when

[00:06:53] it comes to retirement, you're trying to account for the next 20 to 30 years of your life with

[00:06:58] various unknowns and a finite set of resources. One way to deal with retirement planning stress

[00:07:04] is to start small. You don't need to tackle everything all at one time. You can break

[00:07:09] down the task into manageable chunks. 6. Eat well, exercise, and breathe.

[00:07:17] Financial stress can be helped with the habits that make you an overall healthier person.

[00:07:22] Eat well, exercise, meditate, seek intellectual and social stimulation, and maintain a regular

[00:07:29] schedule. 7. Take control.

[00:07:33] Self-efficacy is a psychological term to describe people's internal beliefs about their ability to

[00:07:39] have an impact on events that affect their lives. Your self-efficacy is your belief in your own

[00:07:45] effectiveness as a person, both generally in terms of managing your life and specifically with regard

[00:07:51] to competently dealing with individual tasks. Your financial self-efficacy is your ability to

[00:07:58] effectively manage your money. Research has shown that feeling in control of your finances

[00:08:04] is an important buffer of negative stress. Building and maintaining a comprehensive

[00:08:09] financial plan can deliver that sense of control you crave. You just listened to the post titled,

[00:08:19] 7 Ways to Tame Financial Stress for a Wealthier Future by Kathleen Coxwell of newretirement.com.

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[00:09:57] Shipping from the United States Postal Service. Keep everything simple with clear upfront pricing

[00:10:04] and no unexpected surcharges. Keep things affordable with some of the lowest prices out

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[00:10:16] to your advantage. Learn how at USPS.com slash ADDvantage. USPS Ground Advantage. Simple,

[00:10:25] affordable, reliable. If your financial stress feels insurmountable, perhaps financial therapy

[00:10:33] can help you get to the root of the issue. This type of therapy is all about exploring the

[00:10:38] emotional side of money. It's like hitting the pause button on your worries and taking a deep

[00:10:43] dive into understanding your relationship with money. Financial therapists help you unpack those

[00:10:49] money beliefs and behaviors that might be holding you back. Ever heard of money scripts? They're

[00:10:55] like the stories we tell ourselves about money, often inherited from our upbringing or past

[00:11:00] experiences. Financial therapy helps you rewrite those scripts if they're not serving you well.

[00:11:06] But it's not just about talking. Financial therapy is action-oriented. You'll set concrete goals and

[00:11:12] develop practical strategies to manage your finances better. It's like having a personal

[00:11:18] trainer for your money mindset. Plus, it's a safe space to tackle those taboo topics like debt,

[00:11:24] overspending, or even fear of success. Financial therapists offer nonjudgmental support and

[00:11:30] guidance as you work through these tough issues. Financial therapy can help you build confidence,

[00:11:36] improve communication with your partner about money, and ultimately live a more fulfilling life.

[00:11:41] So if you're feeling stuck in a cycle of financial stress, consider giving financial therapy a try.

[00:11:47] It might just be the game changer you've been looking for.

[00:11:51] But that'll do it for today and another installment of Optimal Finance Daily.

[00:11:55] Have a happy Thursday. Thank you for being here every day and listening all the way to the end.

[00:12:00] And I'll see you for the Friday show tomorrow, where optimal life awaits.