Like it or not, money plays an important part in our lives.
“Money is not everything in life – but make sure you have enough before talking such nonsense”
Money affords us to live a certain quality of life in the present as well as provide a sense of security as we head into the future.
If you are lucky you might enjoy what you do for a living, but scores of corporate employees continue in their jobs primarily for the money (even if they don’t particularly like their jobs).
Given its importance in our lives, most people worry about money in some way or the other. More interestingly, this worry about money matters is not dependent on how much you have of it.
People who have too much or too little money, are equally susceptible to worries about money (though not of the same nature).
But what about the process of worrying itself and the impact it has on our financial wellness? And is there a correct way of going about it?
How We Worry About Money
Think of a simple scale from 0 to 100 going from left to right.
At one end of the scale (0) on the extreme left are people who have absolutely no worries or stress about money. It does not matter if they have too much or too little of it.
The decisions they make about money would make an average person cringe. They may come across as careless or casual about their relationship with money.
Folks at this end of the scale are all about living in the here and now.
The impact this behaviour could have on their financial future does not figure in their view of the world.
The relationship with money for this group is like oil and water. Even though it is present right next to each other, it will never enter their thinking process or impact their actions.
This is the NO WORRY group.
At the other end of the scale (100) at the extreme right is the perennially anxious group. No matter how little or how much money they have, they just can’t stop thinking and worrying about it.
As far as they are concerned, there is always some danger lurking round the corner which could harm their financial well-being.
They are constantly worried. Most of their time is focussed on ways to earn more or spend less every step of the way.
The impact this behaviour is having on their present life does not figure in their view of the world.
This is the ALWAYS WORRIED group.
As for the rest of us, we all fall somewhere on this scale of 0 to 100.
A number of factors impact where you end up on this scale. This includes your family background, your personal values, personality and the environment you grew up in.
Your approach to money gets more or less hard wired in your mind by the time you are ready to start your career.
From there on most decisions you make in life about money will mainly be guided by your inherent money mind-set.
The Wider Impact of Our Money Mind-set
Even though you may not realise it, your approach towards personal finance can impact you and your family.
This is more so if you are the one who normally makes financial decisions. It also impacts the relationship with your friends and colleagues whom you regularly interact with.
(In case you are wondering where you fall on the money worry scale just ask your spouse or close friends. They will be able to let you know instantly and the answer may surprise you!)
Just like most things in our personality, we can also become blind to our approach towards money.
Since it comes so naturally to us, we don’t really see anything wrong on being on either ends of the money worry scale.
The Pitfall of Being near the Extreme Left (0)
We are naturally programmed to enjoy life here and now. Instant gratification releases dopamine in the brain which makes us feel happy.
Delaying consumption is not normal and takes a lot of willpower and determination. Getting some grey hair makes it easier but we are still guided, to a large extent, by our ingrained money personality on these matters.
However, living too much in the present without thinking about the future can make for a difficult future when you stop working and have to live off your savings.
You may end up with regrets about not saving money when you could have. Did you really need to borrow and buy all that stuff when you were younger?
The Pitfall of being near the Extreme Right (100)
Given that you are almost obsessive about money, it can make you blind towards everything else that life has to offer.
There are some things in life that you can only do when you are young and in good physical shape. Things like sports, adventure, travel, dining and other experiences that money can buy today.
If you have not lived your life to the fullest when you are young, you are only setting yourself up for an old age that will be full of regrets (but a fat bank account).
Life is what happens when you are busy making plans
The Right Way to Worry About Money
Now that we know about the money worry scale let’s find out the best way to make use of it.
The proper way to get stressed about money is to keep your worries on a specific part of the worry scale called the “Worry Sweet Spot”.
Research done on stress tells us that some stress is good for you. It can lead to improved performance at the workplace or other arenas.
In a similar fashion some amount of money worry can actually help you get the best results in your relationship with money and how it impacts your life.
The Money Worry Scale is actually not a straight line. There is a part in the middle at which you actually get a positive leap upwards on the scale.
By moving yourself to the “worry sweet spot” on the scale you will be able to make much more balanced decisions about saving, spending or investing your money.
You will be able to enjoy what life has to offer today, while preparing yourself for the challenges that life throws at you in the future.
Irrespective of where you are presently, the intention should be to nudge yourself towards that zone in the middle little by little.
Although the idea of moving yourself to the worry sweet spot seems pretty straight forward, it can be really hard to do.
That is because we are talking about making a shift in something that is almost hard-wired in your personality and the way you act.
It will take a huge amount of willpower on your part to make it happen. A supportive spouse or partner can be very useful in nudging you in this exercise.
You may never be able to act completely different from your natural instincts, yet even a small nudge in that direction can deliver significant benefits in most financial decisions.
Worrying about something is a sign that you care about it.
So if you have worries about money from time to time then it is good thing. It shows that you are giving money the importance that it deserves.
The important thing though is to make sure that this worry about money should not overwhelm everything else that life has to offer.
The key to worrying about money is all about finding a balance.
Worry too little and you may jeopardise a secure financial future. Worry too much and end up missing out on the present.
You have to find your own money worry sweet spot. Once you find and hit that sweet spot you can be sure of a great today and a fantastic tomorrow.
Dushyant Choudhary is the founder of dushyantnomics, an early retirement blog for professionals. Dushyant retired early from his 9-5 corporate life after a successful international career. He brings his knowledge and experience to his current role where he’s dedicated to helping professionals achieve a fulfilling retirement.