Stop worrying about money!

There have been many studies done over the years that show that anxiety about money is one of the leading causes of stress in contemporary society.

A recent (2014) survey performed by the Australian Psychological Society revealed that for 49% of survey participants financial concerns remain the leading cause of stress.  

Why is this so?

Let’s look at some current facts.

With the Reserve Bank of Australia currently setting the cash rate at 1.50%, most of us with an owner occupied mortgage are likely to currently be paying a variable rate loan somewhere around the 3.50% to 4.50% mark.

The current annual rate of inflation, (Inflation can be loosely described as the increase in the cost of living), is 1.3%. The Reserve Bank of Australia targets an annual rate between 2.0% to 3.0% on average.

With home loan interest rates at such historic lows and the rate of inflation low why are so many of us stressed about money?  
 
I believe the answer lies at least partly in FOMO (Fear Of Missing Out).

As an example, how many of us have fallen victim to having to buy the latest gadgets as soon as they are released (thus paying full retail price for something you didn’t actually need in the first place).

As a further example, how many of us have purchased something that is price advertised as save 50% (again, for something that you didn’t actually need in the first place). This form of advertising is my personal bugbear. You haven’t saved anything at all. You have actually spent 50% of what the item was originally advertised at. Real saving is putting money in the bank – not spending it.

I could go on and on with the examples, however I believe the point is clear.

Of course for everybody there will be times where you do NEED to spend money unexpectedly (e.g. your fridge has broken down, car needs repairs, vet bills etc., etc.), so I’m not for a moment suggesting that these expenses can be avoided.

What I am suggesting is that by controlling the WANT spending the vast majority of us can retake control of the household budget.

Most modern marketing techniques are designed to have you spend money that you don’t need to spend (generally with a FOMO type advertising campaign), and this type of spending is usually what causes the feeling of financial stress and unease referred to at the beginning of my article.

Crafting a monthly budget for your household and through coaching learning the skills to better manage your level of exposure to WANT spending will go a very long way to easing the level of financial anxiety in your household.

To learn more about the benefits that can be obtained from having a monthly budget for your household, and the benefits that can be derived from financial coaching contact Leigh at Empower Money Management on 0407 439 827 or www.empowermm.com.au