Feeling stressed about money? How to be more zen about your finances

Financially, times are feeling pretty bleak right now. With the cost of pretty much EVERYTHING going up, and the value of what we’re earning going down, many of us are feeling stressed about money – which is pretty understandable. So you’ve cancelled your unnecessary subscriptions and stopped going out for dinner because you can’t deal with those eye-watering bills for a pretty standard and unmemorable meal. But what else can we do if we’re feeling stresed about money? Here, Michael Gilmore AKA the Seven Dollar Millionaire and the author of The Little Book of Zen Money: A Simple Path to Financial Peace of Mind shares his tips for feeling more financially zen whilst bracing ourselves for a bumpy ride ahead.

Can you share some strategies for surviving this stressful financial period?

Things are really hard right now, and it can all get too much. Whenever that happens, in any scenario, whether it’s because of inflation or work or relationships, the key is to reduce how over-whelming it feels. There are two really great steps that always help in that.

First, recognise that this is a tough time, and that you’re right to feel anxious about it. Denial can lead to spirals that make things even worse, so look it in the eye.

Second, remember that we don’t have to do everything in one go. Small steps are always the path to achievement, so identify a small change that you can make, and go for that first. Make it the tiniest step you can, do it, and that will make the second and third steps easier, and those will show you a path away from the stress.

What are your tips for budgeting and saving during this time?

If you don’t already track your spending, writing down every single item, start right now. We forget about 3 things off any list of 10, and 30% of our spending is a lot. That “grey area” is a source of uncertainty, denial and even stress. Writing down our spending brings it out into the world, creates new synapses, and enables us to think about it in a new way.

If you need to, reframe it. Don’t think of it as tracking, think of it as journaling, but for money. As with any journaling, you will get a better sense of what matters to you, and what doesn’t, which is so important right now.

If you don’t already save, then it is going to be harder than ever before – but you may also feel more strongly now that you could have saved in the past for this rainy day, and want to develop that habit. The most important tip for saving is to treat it like the first bill of the month, and pay it into a saving or investment account before you do anything else. You can build that habit with the smallest amount of money, a pound, and then when things get better (remember, they will), you can build numbers on to the habit.

Can you share some ways we can stay in control when prices around us are feeling very much out of our control?

One of my favourite things to do is remember how many things I enjoy doing don’t cost money, or how many cheap things I prefer to expensive things. In my book, The Little Book of Zen Money, I explained how I write a list of my happiest times, and then of expensive times, and look at how little connection there is between the two lists. Money doesn’t equal enjoyment, and now is a really useful time to break that link between the two we all have.

Two important components to staying in control are awareness and agency. By tracking your spending, drawing out lists of very cheap or free things to do, and starting to do something, you are increasing your awareness of the situation and taking more control, both of which will reduce anxiety.

Can you share any hacks for increasing our spending power when it feels like our collective spending power is diminishing?

There are so many hacks, but they all depend on where you’re at – how much money, savings, debt, etc you have. That’s the thing about money, is that it is so individual. We should all be looking to as many places as we can right now. Don’t worry or get angry about ones that aren’t right for you, that seem almost insulting. Keep looking for people who you can relate to, with more relevant ideas.

For me, the best and most universal hack is to increase the amount of time I spend doing truly free things with my time. My favourite example is to go for a walk. I honestly don’t think anyone goes for too many walks, not just for enjoyment’s sake. We might feel we walk enough, taking kids to the park, to work, to the bus, but these aren’t going for a walk. Rather than meet a friend for drinks, meet for a walk. Rather than date night with your spouse, go for a walk and chat. Rather than complain about there being nothing on the telly, go for a walk on your own and think.

If that’s not for you, identify something else free you have always enjoyed doing, but don’t feel you have done enough, and commit more time to that.

What else can we do to fix our finances during this time?

Again, it is all so specific. If you’ve got debt, try to do whatever you can to lower the interest rates on that as quickly as you can. Speak to debt advisors, consumer advisors or any other counsellor who can help you reduce that burden, and delaying repayment. There is help available if you are in serious need – so go and take it. There is also no shame in this. Multi-billionaires declare bankruptcy all the time: you deserve the same help they get.

If your situation isn’t that bad, then perhaps remind yourself of that, and identify spending you really can avoid. I know it would be nice to travel again, but with airfares going up rapidly, holidays nearer home are just as much fun.

Most of us may be in between those two examples though. By tracking our spending, precisely, we will see where we can improve things. We can use that awareness of our own position to make our own meaningful change.

Can you share some of your favourite financial mantras and mindfulness exercises to help us feel less stressed out?

Breathing exercises are the most important for stressful times. Taking slow deep breaths, fully inhaling and exhaling, can literally change the chemical composition of our blood that makes us feel stressed or not. We can’t just turn it on the first time we really need it though, so practicing this is important. Try triangular breathing, with a hold after the exhale, and box breathing with holds after the inhale and exhale. Five minutes of that can change the way you feel for the next hour, and that could change your day. It’s also free – and doesn’t leave you with a hangover the next day!

As for mantras, personally I always try to look at how a decision, or spending, is being “framed”. So much of finance is psychological, and to see the framing of a situation is to understand the real “why” behind a decision. So stepping back, looking at the frame, can really help make a better decision, and help stop the confusion between when we feel we need something and when we really do.

Any final tips to help us become financial experts without the stress?

Commit to engaging with money, to thinking about it and learning the fundamentals, how to save and how to invest. Financial security isn’t a number, it’s a journey, like a path, that is much easier to see if you start at the beginning and walk all the way along it, but almost invisible if you join it midway and walk across it.

One of the reasons money can be so stressful is because we keep trying join the path midway and feel lost. Recognise that, commit to learning some of the basics, and the path will become much clearer.

The Little Book of Zen Money: A Simple Path to Financial Peace of Mind by Michael Gilmore, ‘The Seven Dollar Millionaire’ is out now, £15

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How to cope with rising cost of living

The first time I really felt the rising cost of living was back in January where we went out for Sunday roast and ended up paying £80 for four people! I kid you not. My face probably looked like a slapped arse, and I immediately vowed that I would begin a mini campaign to skip on eating out. Then there has been the price creep on the groceries every week. The last time I needed to just “pick up a few bits” from our local supermarket, I almost had a heart attack when I left with just a few items and £50 poorer. We luckily have an electric car, but I have in recent weeks become the central heating police (thank goodness for the warmer weather!), and have been going around lecturing people on leaving the lights on sounding very much like my own father.

I pretty much try to avoid leaving the house altogether these days as I know everytime I do my wallet will just get an almighty spanking. But of course, there are plenty of ways to feel the rising cost of living without even leaving the four walls of your home especially with rising energy prices and the necessary evil that has become online shopping.

This sentiment is no doubt being repeated in households up and down the land as we all start feeling the rising cost of living in pretty much everything we do. After all, inflation is surpassing 6% for the first time since 1992, and Rishi Sunak is facing pressure to respond to increasing levels of inflation in his Spring Statement.

So how do we cope with this new cause of concern layered upon those which we have already had to shoulder over the past two years? We spoke to some experts to get some tips on how to cope with the rising cost of living.

rising cost of living

Know your finances

If you don’t know where your money is coming and going, now is the time to get on top of it all. Melina Abbott, author of Sacred Selling and all round money ninja advises, “Create a cashflow forecast in something like Excel and each day keep track of all money coming in, and money going out plus the balance of your account.  Do this at the end of each day for money you’ve received and money you’ve spent.  On the same spreadsheet, track money due to come in and go out in the next 30 days.  This gets you very present to money and what you focus on expands.  It also shows you where any danger zones are – so you’ll know in advance if you’re going to struggle to pay a particular bill and you can therefore take action before it happens by cutting unnecessary expenses. 

Get conscious of where your money is going and be very discerning where you choose to spend your money.  Much of what we spend money on is a habit – we do it without thinking.  For the next 3 months, for every transactions ask yourself “do I really need this?  Could I leave buying it for another few weeks?”  If the answers is yes, don’t buy it.

Look at your cash-flow forecast and if it looks like you’ll have some money left over before payday, put it in a savings account that’s not linked to your main current account.  You want to have access to it, but not be able to see it each day.  Put it aside as soon as you receive the income, not at the end of the month.  If you try to do this there won’t be any left as our outgoings always expand to fit our income.  By putting it aside first it protects our money from ourselves.  Make a pact that you’ll only spend it in an emergency.  Having savings to fall back on gives you peace of mind.” 

If you find all this terribly boring, then fret not. Another great tip from Abbott is to treat saving money as a game. Yes really! But how? “Make it fun and get the whole family involved.  Give it a name, for example Austerity Measures, Money Magic, Money Matters.  Make it short-term – for example, the next 3 months.  If we think we’re going to have to scrimp and save forever it can get very depressing.  But looking at it over the short term, say 3 months – then it’s much easier to make changes.  See it as an adventure rather than a hardship – you might not enjoy camping but it’s fun to experience once in your life.”

rising cost of living

Know where to get help

Greg Wilson, founder of energy comparison website Quotezone.co.uk, advises that households should double check they’ve made use of all the help available such as:

  • Government schemes: research government schemes like the Winter Fuel Payment which provides £100 to £300 to help pay heating bills. Customers are eligible for the scheme if they were born on or before 26 September 1955.* Be aware that the government is also exploring options such as making payments to energy suppliers to soften the blow to consumers.
  • Switch providers: according to Ofgem, households can save around £360 every year. Switching provider doesn’t just help save money, it can also allow consumers to seek out more environmentally friendly suppliers and those with better customer service. 
  • Tax relief: check out the tax relief option, which allows anyone working at home on a regular basis to claim relief on gas and electricity bills – as well as metered water and business phone calls. HMRC are offering relief worth £312 per year with no need to provide receipts or factor in any complicated calculations. 
  • Discounts and efficiency checks:  use energy efficient lightbulbs – a relatively inexpensive solution which helps to reduce costs over a long period of time.  Also, look out for schemes such as the Warm Home Discount that provide a one off discount of £140 off the winter electricity bill between September and March.

He comments: “Given the upcoming rise in energy price caps in April, it’s important that people get on the front foot and look for ways to save.

If you’re eligible, making use of the government’s schemes to help with the cost of energy bills is a good start. There are many schemes out there, including the Warm Home Discount and Winter Fuel Payments scheme, that should make bills a little easier to pay. These schemes are targeted to both the elderly and those on a low-income, providing support to the most vulnerable demographics.

But there are also many other ways to tackle increasing energy cost – one of the most effective ways is to switch provider, a process which has never been easier. By choosing an Ofgem-accredited comparison site, consumers can get an understanding of what’s on offer across a range of energy suppliers – instantly providing an overview of more competitive prices.”

Be savvy and cut back on non-essentials

Rest Less Money Expert, Mel Wright, adds: “If you’re operating on a reduced income, your focus should be on covering essentials and you should think about cutting back on non-essential spending.  Cutting out or down on subscriptions is a good place to start whether it’s magazines, gym or TV streaming.  Check your bank statement for your spending over the past few months to remind yourself of your regular payments so you can review other spend you can cut back.

When food shopping, consider buying supermarket own brand items rather than sticking with well known brands.  This can save you hundreds of pounds each year.  Also shop in the evening so you can benefit from yellow sticker items – products that are close to their sell-by date.  You can usually freeze what you aren’t going to use immediately.

Use tech to help you reduce your food waste and can help you find food at a reduced cost, sometimes even for free.  Olio and Too Good to Go are two great options.

Energy bills are soaring but there are ways you can cut back: as well as replacing light bulbs with energy efficiently LEDs, draft proof windows and doors, block cracks in the floor and skirting boards – these are just some of the ways you can shave some money off your energy bills each month.”

Find ways to supplement your income

We’ve talked a lot about saving but what about the flip side – earning? Aside from landing a new job, making money outside of work is one of the best ways to supplement your income. Abbott suggests we think about ways we can supplement income aka get a side hustle, “Do you have a skillset that others would pay for?  A spare room you can let out?   Brainstorm all the ways you could generate income – some will be nonsense but there might just be a golden gem you can test out.”

Need some inspiration of side hustle ideas? Check out this extensive list of side hustle ideas for more inspiration.

Are you feeling the effect of the rising cost of living? How have you changed your attitude towards money recently to reflect the current economic situation? Let us know in a comment below or over on our Instagram community here. Keep up to date with all the latest articles by subscribing for FREE in the box below

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