Three Ways To Reduce Your Money Stress

March 19, 2020, WASHINGTON, D.C. — On March 19, 2020, a photo was taken of US dollar bills in… [+] The United States of America’s capital, Washington, D.C. Treasury Secretary Steven Mnuchin said Thursday that the Trump administration’s proposal to send Americans relief money as part of a huge stimulus package in response to COVID-19 may be $1,000 per person and $500 per child. (Photo courtesy of Xinhua/Liu Jie via Getty) (Getty Images/Xinhua/Liu Jie)
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People are concerned about money in both good and terrible times. Prior to COVID, surveys revealed that around seven out of ten people were anxious about money at any given moment. What effect has the pandemic had on this anxiety? It aggravated a problem that many of us already had. People had to worry about their jobs and their ability to afford their homes in addition to their health and the overall well-being of the world. According to a Gallup poll, half of all workers expect to earn less in 2020 than they do now. In the United States, 79 percent of women surveyed by Fidelity Investments said worry and money were weighing them down, up from 67 percent the year before. During the early days of COVID, about 90% of Americans experienced financial hardship.
This anxiety could be the effect of everything vying for our money. There’s a lot of demand for the money we bring in between saving for retirement, paying bills and the mortgage or rent, and purchasing frills. When something like a pandemic strikes, it re-ignites all of our fears, causing us to feel even more stressed than we already were.
However, now that the pandemic has passed, it may be time to focus on reducing your financial stress in the future. It will not necessarily result in more money in the investing account, nor will it diminish the various needs that those funds must meet. Instead, it’s about changing basic habits that help you cope with money’s constant presence in your life.
Do not engage in day trading.
Day-trade if you want to increase the amount of stress in your life. If you day-trade (even a little), you should consider eliminating it from your daily routine to relieve stress. According to a new survey by Betterment, 86 percent of day traders are concerned about money in some way, compared to 65 percent of non-day traders. Approximately one-fourth of day traders suffer substantial money stress, compared to only 6% of non-day traders polled.
ADDITIONAL INFORMATION FOR YOU
This stress could be caused by two sources. First, despite their success stories, day traders typically underperform individuals who invest in low-cost index funds or employ a passive savings technique. According to a Taiwanese survey, just about 1% of day traders outperformed a low-cost ETF. After fees, only about 3% of day traders in Brazil made a profit, according to a research. So the stress could stem from the fact that they aren’t making much money – despite the fact that they believe they should.
The second argument has to do with day trading’s nature. You’re continuously looking at your account if you’re constantly wanting to trade stocks. And, as you’ll see, that’s a lot of pressure.
Less time spent checking your account
There’s a narrow line between keeping track of your money in your investing accounts and looking at them excessively. Those who have established a healthy balance in the number of times they check their accounts each month will experience less financial stress.
In the Betterment survey, more than half (56%) of those day traders who were worried about money checked their investment account on a daily basis. One-fourth of investors check their accounts numerous times every day. Only 18% of people who do not day trade check their investments account every day.
When saving for the long run, however, checking your account less frequently can help you relax and avoid making a poor decision. The more you check your account, the more likely you are to notice a significant drop. Because we fear loss more than we enjoy gains, if you witness a significant drop, you’re more inclined to make an ill-advised investment swap. However, if you check it less frequently, you will miss out on the short-term losses and only see the long-term results.
Because you’re investing for the long haul, it’s the end results that matter.
Some of the Stress Will Dissipate As You Grow Older (If You Invest Now)
One source of stress is a factor over which you have little control: your age. During the pandemic, this age gap was particularly noticeable. According to a survey conducted by the American Institute of CPAs, during the epidemic, 75% of 18- to 34-year-olds were at least somewhat concerned about money. Only 27% of those aged 65 and up felt the same strain.
69 percent of millennials and Gen-Z say they’re somewhat or significantly stressed about money, compared to 53 percent of Gen-X and 20 percent of Boomers, according to Betterment’s survey.
This not only means that as you become older, your money will increase, but it will also help you relax. It also includes all of the current and future efforts you make to grow your money, such as investing and saving for retirement. When you’re younger, you can’t always see the results of your work, which adds to the stress.
As you get older, you’ll see that your savings rise, reducing your stress. Even in times of high worry, this is true./nRead More