#Positively Stressed - Week 25
According to multiple studies, financial stress is the # 1 cause of arguments in relationships – and a top contributing factor to divorce.
Why? Because, as the Cabaret lyric goes – “Money makes the world go round.”
We may not all be chasing billionaire status, but most of us are striving for something meaningful nonetheless – a comfortable life.
But what does “comfortable” even mean? Is it a house or a condo? Is it 2 bedrooms or 4? Living near family or wherever housing is affordable? Weekly pizza orders or a Michelin-starred restaurant once a year?
That’s where the stress often begins – misaligned expectations and unclear communication.
Sometimes, life throws a wrench into your best-laid plans – layoffs, illness, emergencies. Other times, it’s about underlying issues like emotional spending, addiction, or a “keeping up with the Joneses” attitude. In the financial industry, these patterns create what is called a “math problem” – spending more than your bringing in.
And until you deal with both the behavior AND the numbers, the financial stress compounds.
Eventually, many people hit a breaking point. They decide to make a change – either by using a system like Dave Ramsey's “Baby Steps”, figuring it out through trial and error, or (unfortunately) parting ways with a partner they couldn’t align with.
Here is a simplified version of the “Baby Steps” and the psychology behind why they work for stress relief:
1) Save a small emergency fund – Acts as a buffer against surprise stressors during Step 2
2) Pay off all debts (except the mortgage) – Gets rid of the mental weight
3) Fully fund emergency savings (~$10k-40k) – Provides peace of mind for 6 months when life happens (and it will)
These first three are supposed to be done as fast as possible. Until these three steps are done, Dave Ramsey says “you’re broke” and need to live on “Rice and beans; and Beans and rice.” The hyperbole sets the tone for the mindset.
Once those three “Baby Steps” are completed, the next three can be done at a more manageable pace and done together:
4) Invest 15% of pre-tax income – Provides future financial security
5) Pay off your home – Ultimate financial freedom
6) Save for kid’s education – Reduces generational financial stress
Once those steps are completed, it leaves the final Baby Step:
7) Spend, Give, and Save generously – Creates emotional fulfillment
Clarity, communication, and consistent actions over time are the best ways to ease the burden of financial stress.
So, start where you are. Talk openly about what you are planning on doing. Take the first step. Because every step forward is one less reason to feel overwhelmed.
And that is why Financial Health is Mental Health.
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