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How To Bring Down Financial Stress In Less Than A Minute

Because it hurts. Bad.

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Meiko Takechi Arquillos (Prop Styling: Kara Inoue)
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Are you out from under yet?

Out from under your holiday bills, that is. Americans spent $730 billion on gifts and holiday goodies last year, and if you used credit cards for your share, you’ve had some big bills coming your way.

That’s bad — but the holidays are just one source of the financial stress so many people feel, especially in the midst of the current coronavirus crisis.

Two-thirds of us worry about meeting day-to-day expenses, and according to Merrill Lynch, 4 in 10 of us fear running out of money by age 80. Women have extra stress — thanks, gender pay gap — and according to research by Everyday Health, Gen Xers are the most stressed of all.

That stress hurts. Many of my financial-stress coaching clients have cried telling me about their situation. They say they lose sleep over their finances, or that the stress hurts their relationships, or both. One regularly called her daughter to say she would be living in a shack in the daughter’s backyard when her money ran out. And nearly all of them have asked, “What is wrong with me?!?” (Spoiler alert: Nothing. They’re just in challenging situations.)

Money stress hurts our physical health, too. The Great Recession, the mother of all financial stressors, raised Americans’ blood pressure and glucose. Even worse, financial stress actually starts a vicious cycle. When we feel stressed about money, we are less likely to save, less likely to make a plan for our money, and more likely to act impulsively when we get paid, according to a recent study by Capital One and the Decision Lab. Then our money problems get worse — and the cycle repeats.

Luckily, there are ways we can bring down financial anxiety IN LESS THAN A MINUTE. The answer lies in taking our thinking up a notch. Say your car suddenly needs a bunch of work, or your manager abruptly reduces your work hours. The emotion-processing part of your brain starts sending distress signals — and we are hardwired to respond to those signals by focusing right on the here and now. We start asking ourselves how we’re going to pay for the car repairs or deal with the cut in pay.

“Your conscious mind puts the blinders on to all that’s not right in front of you,” said Brooke Struck, research director of the Decision Lab.

In that moment, we can perversely wind up doing things that make the situation worse: We can cover the car expenses with money that was earmarked for rent or student debt. Maybe we go out for drinks with friends to commiserate about our lousy boss — and then we wind up with two kinds of hangovers, physical and financial.

So to really reduce financial stress, we need to short circuit that instinctive stress-related process. We need to think big picture about how we want our money to serve us in the long term. Struck and his colleagues found a quick way to do that.

They asked half of their study participants to think about WHY people save money, and the other half to consider HOW. The WHY group immediately started thinking about their money values, goals and big-picture concepts, while the HOW participants were focused on tactical things like where to quickly find the money they need right now. When the researchers surveyed the study participants afterward, they found that people who considered the WHY questions felt more in control of their finances — offsetting 20 percent of the effect of stress in this area — and less compelled to spend their paycheck right away (offsetting about 40 percent of the stress motivation).

Why? When you think big picture, “Things that are further in the future or less immediate are more important to you,” Struck said. Think savings, retirement or that dreamed-of trip to Asia. How can you get the same effect? When you hit a financial bump in the road, ask yourself a “why” question: “Why do I have money set aside for savings?” “Why will saving money help me?”

If you really consider these — even for a matter of seconds — you’ll find that you are less focused on your immediate situation and more focused on your big picture. If you think you’ll forget these questions in a stressful moment, try writing them down and posting them where you will see them regularly.

Before you know it, you just may find yourself saving like a boss — and on your way to a healthier relationship with money.

Kelley Holland is a financial stress expert who coaches, writes and speaks about how women can take charge of their money. She is also an award-winning business and personal finance journalist who spent two decades writing for the New York Times, Business Week, and CNBC.

Dealing with an unexpected expense? We can help. Get your free action plan from AARP Money Map.