Best Tips for Handling Financial Stress
12 Jan 2022
Financial stress -- there’s no running from it, especially if you're living in a developed country like Singapore.
We have a high quality of living and we're ranked the top city in the whole of Asia for it, but at the same time, we're also tied with Paris to be the second most expensive city in the world in 2021.
Each year, the price of everything increases a little... except our salaries, that is. No wonder Singapore's middle class is so stressed out, and some even came to me for tips for handling financial stress.
Unfortunately, things are not going to get better from here, and this is only part and parcel of being in a highly developed country. And if you are facing one of these issues right now that's causing you financial stress, you're definitely not alone.
Most common causes of financial stress
1. Spouse/partner's expectation
We love our partners or spouses. They are our favourite people, and whenever possible, we want to give them the best.
However, the problem comes when they start to have high or even unrealistic expectations of us. The constant want to be showered with expensive gifts, holidays, a dream wedding, dream houses... this can cause anyone financial stress, especially when you realise these expectations will continue for the rest of your life! You're literally having to work harder just so you can meet their expectations.
2. Peer pressure
As we become working adults and mingle with more people, keeping up appearances become increasingly important, or as we say it in our local slang, we cannot "lose face."
Whether your friends or colleagues have a new car, a new home, or a month-long holiday in Europe, if you feel compelled to follow suit or even one-up them in whatever they do, just to show that you can, you're going to experience A LOT of financial stress. It's impossible to ever catch up.
3. Sudden unfortunate events
Life never goes the way we want it to, and sometimes, bad things happen. We can get sick. Our loved ones can get sick... even more so, our elderly parents.
If you're fortunate enough to have insurance policies in place that'll cushion all the medical expenses, that's fine. But what if you don't and you have to bear 5- to 6-figure medical bills all on your own?
4. Blind investments
Growing your money by investing? Great!
Growing your money by investing in something you know nothing about? TERRIBLE IDEA!
Of all the problems I've heard, this is sadly the most common - losing money investing in something just because their friends or family invested in it, but actually knew nothing about it.
Imagine already stressed about not having enough money, attempting to invest to grow your money, but finding out you've lost that money overnight just because your investment "didn't work out."
See also: I'm Pauline Teo, and this is my story
Even celebrities cannot run away...
I've heard people saying time and again "Rich people and celebrities have it easy. They don't have financial stress because they have all the money in the world."
That is not true at all.
In 2000, Mediacorp actress Jacelyn Tay was declared bankrupt when she failed to settle a debt from stock investment losses. Even though she was discharged 4 years later in 2004, it proves something: NO ONE is spared. Not celebrities, not the rich, no one.
If you don't have the right financial management knowledge, ANYONE can be plunged into a great amount of financial stress.
How to do damage control
As much as I want to, I, unfortunately, don't have any magic formula that can make your financial stress go away. BUT I know of a few tips for handling financial stress you can apply to at least minimise them.
1. Right Knowledge
You can never go wrong equipping yourself with the right knowledge. No thief can get into your head in the middle of the night and steal your knowledge. So once you acquire knowledge of it, you'll have it for life.
Understanding the "pay yourself first" concept, knowing how to grow your money on investments rather than putting all of it in the bank and watching them erode with inflation, getting the right insurance for yourself and your loved ones – the right financial knowledge goes a long way and the amount of stress you can shave off just by knowing all these is seriously underrated.
2. Right Mentor
"I can learn all these online for free” -- famous last words before someone loses their money blindly investing on a "hot tip" online.
Having the right mentor with a proven track record and great financial results can impact your financial situation for life. It can cost you some money if you want to be under their wing but if you keep taking action following their methods, the money usually comes back to you manyfold.
See also: Why We Follow Warren Buffett's Investment Strategy
Imagine wanting to go somewhere you've never been without a map. Not only will you get lost a lot along the way, but you will also take a longer time to get there. Now imagine having someone who's been there before, and he's guiding you along to the destination while explaining the route to you. You'll arrive much faster and you're less likely to get lost.
Isn't that less stressful?
3. Right Network
“You are the average of the five people you spend the most time with.”
So if you want to be financially free, you should be mixing with people who already are or at least those also working towards that, and not with people who are still slogging in 9 to 5 jobs, complaining about life on a daily basis.
Your network is your net worth. So, join the motivated, the overachievers, and the ones constantly thinking of ways to grow their money. Bounce ideas, exchange tips for handling financial stress, and keep each other accountable in achieving your goals rather than in finding something new to complain about every single day.
Financial stress exists everywhere, and it is experienced by everyone, certainly NOT just unique to you. So instead of complaining and questioning "why is this happening to me?" why not just gather the best tips for handling financial stress and take massive action to reduce it as much as possible?
Complaining about it every day certainly won't make it go away. Take action instead and there's a higher likelihood it'll be better.
Here’s how you can take action. Join our free investing bootcamp on creating passive income for families.
