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