By the numbers, the economy is fitfully improving, and the stock market is downright ebullient. Still, evidence is everywhere that Americans are under money pressure: Real incomes are hardly growing, college costs are soaring, and we're living in retirement longer. A Money survey last year found that half of those with six-figure household incomes worried about their family's economic security. Such stress takes an emotional toll, with couples ranking money as the most frequent source of arguments.
Of course, not all money anxieties are really about money. They can be about your sense of self-worth or a fear of being wasteful or the sense that your brokerage statement reflects on your competence. "People are so worried about making a mistake," says Marguerita Cheng, a financial planner in Rockville, Md. Often the problem is that you are looking too much at the way your money fluctuates and stacks up and not at the things you are really working for.
Here are three ways to keep money anxieties at bay.
Pay Less Attention to the Markets
When Spectrem Group polled investors with assets of $100,000 to $1 million earlier this year, it found that 70% worried about the stock market. Think more wealth would free you from that anxiety? Nope. Almost 70% of those with $5 million to $25 million worried too. Behavioral economics helps explain why the stock market is an emotional minefield, says financial planner Victor Garza of Dallas. A quirk that psychologists call loss aversion makes us fret over dips our portfolio takes more than we celebrate profits. "Anchoring" to frequently reported numbers like the Dow average can make us expect to match hot market gains when we should be satisfied with the steadier gains produced by a mix of stocks and bonds. Once you have a diversified strategy in place, check your portfolio once a quarter. That's enough to ensure your asset-allocation balance hasn't been thrown off, but not so much that you'll obsess.
Tell Someone Thanks
People who deliberately cultivate feelings of gratitude for their good fortune in life feel happier. One exercise is to write a letter thanking someone who has helped you. (This is not the normal thank-you note for a gift.) Researchers found that subjects who penned such notes reported higher levels of gratitude and happiness. "It gets the focus away from what you don't have and onto what you do," says Keith Whitaker, a researcher and consultant who studies money and happiness.
Psychologists say that after a point, accumulating more things rarely leads to lasting happiness. "We acclimate," says Catherine Sanderson, a psychology professor at Amherst College. What does make people happy is strong relationships, be they with family, friends, or a religious group. Redirect some of your spending toward people around you, like planning a family vacation, donating to charity, or just buying a gift for a friend.
One study gave out $10 Starbucks gift cards to people with one of four instructions: Use it themselves, give it to a friend, or go with a friend to Starbucks to spend just on themselves or treat the friend. Those who took a friend to coffee and treated reported the greatest happiness. "Giving is a booster for your sense of well-being," says Sanderson. Maybe on some of those coffee outings, you'll be able to lend your friends an ear and help with their worries too.
Adapted from “Never Worry About Money Again,” by Carla Fried, Ian Salisbury, and Taylor Tepper, which appeared in the July 2015 issue of Money magazine.
More ways to Never Worry About Money Again:
4 Ways to Take Control of Your Spending
3 Ways to Make Your Money Last in Retirement
The No-Sweat Way to Protect Yourself From Financial Disaster