Anxiety Around Money – Try This Three Step Powerful Process
Hi, it’s Dr Ro, I’m here to talk to you about anxiety related to money.
So you may have seen one or two other videos I’ve done whilst I’ve been here, it’s a subject I think is growing rapidly and the concept and the discussion around anxiety and stress seem to be growing.
I just literally saw it in the media again today and I had a call with my PA yesterday and she said, are you going to tackle the subject of anxiety which you’ve been doing for years, but are you going to do more videos on this? And I said yes I am.
So, let’s talk about anxiety related to money. This is the video I want to do for you now. So if you’re watching this right now and you have money-related anxiety or stress-related anxiety, I can tell you that is not uncommon.
You’re not on your own and don’t think for a minute you have to dig a hole and dive into the hole and just feel more stress on top of you. That’s going to make it worse. Now, I’m not a financial advisor, I can’t give you financial advice. So what I’m going to go through is the technique I’ve used for many, many years with people facing financial difficulties. Or more importantly financial anxiety around their financial difficulties.
You will need to seek financial advice from an independent financial adviser around your financial situation. So what I’m going to do is talk about a technique you can if you choose to apply to see if it works for you. And it will be interesting to see what kind of feedback and response you give me from the back of this video.
So I’m going to paint a picture, this is a typical situation for most people. The anxiety is around lack of money or money that is not coming in or money that is owed to them or debts for example, that people have built up because they have borrowed beyond their means. Or it’s the fact that they’re losing their job or their household outgoings are more than the income, there’s generally a bad set of emotions attached to money which is creating this anxiety, this stress. And it shows up from sickness. It shows up through fear, tears, anger, it can show up by being ratty with your partner. It can show up with what I call credit blur, which is where you don’t want to look at, consider, or even think about your financial situation. You don’t want to look at your credit files, your credit cards, your bank statements anything. It’s just “ahh” and you don’t know what to do.
And I know how that feels. I’ve been in that place many, many years ago when I hadn’t built my businesses and I would come out of university and I didn’t know how to deal with the financial side when things got a bit tough. One of the recessions I wasn’t in a good place. I just had no idea, so I had to study and look into this. That’s why now one of my passions is to teach people how to overcome the psychology of it, but also put tools in place that, and if you haven’t watched the videos on property, go watch some of those. Because property can be a tool to help you put some more financial stability in place.
So three steps and I’m trying to simplify these videos to give you something to hang onto because these are short videos and you are not sat here with me having a coaching session, so I can’t get into the psychology of where you’re at. But I can certainly give you some things to think about.
So the first rule of thumb when it comes to financial anxiety is to write down on paper what that anxiety is.
Now you could argue this to be the case for all anxiety and I’ve done different interventions, different coaching sessions with people. And at some point, that question comes up, it’s either at the beginning or very close to the coaching process. I’m going to put it head-on in this particular three-step process because I don’t know what the anxiety is, and the chances are you think you know what it is but you don’t know or you think it’s one thing, but it might be another thing.
So if you can do this, get a journal out and whatever you’re feeling right now, first of all, if you said to me how exactly should we do it? The first thing is to simply describe word for word what your anxiety feels like.
So some things to consider. What are you feeling right now at this moment in time? I’m feeling anxious and angry and frustrated, or sad or sick or whatever it is, victimised, it could be any number of things around your association with money. So write that down, what are you feeling right now.
Secondly, what are you focusing on?
So what specifically are you focusing on? “Well I have got overdue credit cards and I missed one of my payments on one of my credit cards, I lost my job last month, my husband or my wife is in a position where they’re working very hard and it’s just about keeping us afloat. But I’m worried we may not pay the mortgage, we have missed a credit card payment, I don’t know what that’s going to do to my credit files.” What I’m doing is I’m writing down on paper just all the thoughts that are creating anxiety. Because remember all that’s happening is we are setting off a set of neural pathways that are firing off left, right and centre. They’re hooking on to and magnifying our greatest fears. Now that is another conversation for another video, which is what we do with our emotions, the visual side of our thinking and the internal kinaesthetic part of the whole anxiety thing that goes on, but I haven’t got time to go into that right now.
So I need you to capture it on I’m paper, you literally as you’re writing it describe it as a bloody movie. Then I focus on this and then I start to think about what if my partner, husband or wife lose their job, what’s that going to do to us? And so I want you to capture on paper all the things that you’re focusing on specifically related to money.
This is the three stages. The third thing is, what are the greatest fears that you have?
So in those three stages of the description, this can be a page, two pages, three pages. It’s very cathartic and I find at least 50% of the time when I do this with people it might not work for you if you are doing it at home. But I’m hoping it will because when I’m doing it with somebody live, I’m coaching them because I can ask them questions as they’re writing it down. I can keep pressing buttons and I can get closer and closer and closer to the core of what the issue is. And half the time at least they go, even doing that Dr Ro I can already feel a sense of relief.
I’m hoping it’s going to work for you because you’re mapping it out on paper and going okay, so that’s all it is. Because we are trying to capture all this mess of anxiety going on in here and here about money, and we are trying to get it onto paper. So now when you look at it you go, alright it’s just these two pieces of paper, that’s what my life is feeling like. This all the pain, anxiety, the frustration, that sickening feeling, the heartbeats, the palpitations, the shaking hands, It’s all down to these two pieces of paper. I want you to see it for what it is.
Important. So now we’ve done that, my greatest fear is we might lose the house or, you know, we may not be able to pay our bills, whatever that is. So that’s the first thing.
So now you’ve captured it the second part of the process is to logically catalogue your financial situation. So we’ve done the emotional part of it and all the stress and all the things happening over here. Now what I want you to do is separate that from the actual logic of the situation. What is the situation? This is what I perceive it to be in my mind, what is the actual logical situation?
So, I’ll give you an example this is one of the clients I worked with about two years ago. There’s was this whole mess about, can’t pay the bills, can’t do that. Partners lost their job, so I’m describing a scenario but it happened. And there were credit card issues, loan issues, etcetera. So let’s write this down. First of all let’s deal with the credit card, write down logically and factually what the current situation is. So I’ve got £4,700 on credit cards right now. On all your credit cards? Well no, that on one credit card. So which credit card is it? So what else on the credit cards? There’s my husband’s credit card as well. Right so, is that one of the things you wrote down in your fears? Yes. Right okay, what did you write? I am concerned about my husband’s credit card. How much is that? £6,800. Of the two, which one are you more concerned about? It is my husband’s credit card. Right, so you need to underline that in your description, that’s the emotional side, the logical side. What’s the interest rate on that credit card by the way? My credit card 0%, my husband’s credit card £6,750, his interest rate is 21%. Okay, so of those two, one has got a minimum payment per month, but the other one has just come out of its 0% period. So now the interest rate on that credit card is so high that your monthly payments are three times what they were before. Okay, so that’s why we were struggling on that payment. Any other credit cards? Yeah, I have got a small one with about £400 left on it. Okay so let’s write that down, what is the interest rate on that card? 0%.
I’m going through a hypothetical situation here, but you can see the process of capturing here. And this is number two.
So we’ve captured that down, right okay. What else have we got going on? You said about your issues. Well, financially that’s just income. Let’s come to income in a minute, I just want to have a look at any other costs you’ve got going out. Rights so another one I’ve got here is the mortgage. So what about the mortgage? Well, the mortgage that monthly payment is £750 a month. Okay, and that’s every month? Well, it’s been on a fixed-rate mortgage. For How Long? It’s been on a fixed-rate mortgage for the last two years. When does that end? Okay, that was the other thing I was worried about, over there I wrote in my description Dr Ro, I’m not sure what’s happening with the mortgage. That’s why I’m getting anxious. Okay, your lack of clarity. Yes, okay, so alright so what’s the interest rate you’re paying at the moment? The interest rate I’m paying at the moment is 2.4%. Okay, so where’s the mortgage paperwork? I don’t know. Right, so we need to Are find the mortgage paperwork and find out when It runs out. I kind of know when it runs out Dr Ro. When? In runs out in two months. Okay, you’re coming up to the end of the two years, been on a low rate. Just so you know, since you took out this mortgage interest rates have come down. And actually, there are fixed-rate mortgages now that may even be less than that one there.
So you might get yourself in a position where you’re paying £150 a month less if you go and refinance that. Okay didn’t think about. That’s the third thing we are going to come to, the Third Step, some actions that need to take place. Okay so have you got a mortgage broker? Yeah, I can give you the name of the mortgage broker or you can speak to them, whatever it is.
So what we’ve got here is we’ve got anxiety around things that they don’t know what’s going to happen, and at the same time we’re listing it out. There are a couple of things immediately I can start to see what can be done here and that’s the process of the second part. It’s listing things out here to get an idea specifically of what part three, step three is what I can do with that.
So anything else? There is a loan. Okay, so the loan you’ve got out at the moment how much is it? The loan outstanding is £2,250, so these are the debts that I was talking about over here. I’m worried about. Okay, what’s the interest rate on that? 4.5%. Alright so you’ve got credit cards at this interest rate 0% there, you’ve interest rates on the house. That’s coming to the ends of its term very shortly, and you’ve got this loan. How long does run for? It runs for about another three years. Okay, how much is it outstanding? It’s £2,000. Okay, anything else? No.
So that’s been your main stress and pressure.? Yes, plus the job situation. Okay, let’s talk about that. So that’s your outgoings. Alright, income so you’ve lost your job. Yes. What were you earning? £3,000 a month, £2,000 whatever it is. What about your husband? My husband is earning £2,100 a month. Right so what’s your concern? Well, my concern is with that one income and what we’ve got going out with a mortgage and everything else, we are not necessarily going to be able to cover ourselves. Okay, so we need to work out a few things here. Yes, correct. Are you likely to get another job? I’ve started applying.
Okay, so let’s go to step three.
Now we’ve got income coming in, we’ve got the breakdown and all the expenses. Hopefully, this is all making sense.
Now we go to the third step. And the third step is what actions can I take to reduce my outgoings? In other words, all these things we’ve talked about and how can I increase my incomings? Alright well, looking at the current situation at the moment If I could reduce my outgoings by £250 a month. I’m just pulling this number out based on the numbers here, we could just about get by on my husband’s income. Or if it’s the other way around my wife’s income.
Okay, so one thing we can do is try to reduce the outgoings. What if we could reduce the outgoings and put a new income in place? That will change everything for us. How would you feel? I’d feel great. So would that change the picture you just described there in step one? Yeah, it Would. How is anxiety at the moment? Gone away a lot just going through this process. Good, that’s the whole part of the process. Excellent.
So what can we do? The credit card there, which is on a high-interest rate. One of the actions you can do is, can you find a 0% credit card. So again, this is hypothetical remember I can’t give you advice, but some of the things I’ve done and other people I know that have done and I work with have gone out and they found a 0% credit card available. And they have simply transferred. So could your husband transfer his balance onto a 0% card? Well, I’ve got a 0% card. Oh really, what’s the limit on it?
My new card just came out about a month and a half ago. It’s got 9,000 limits on it. Okay, have you used it? No. What’s the interest rate on balance transfers? 0%. Okay, so what if we phoned the credit card company ask them if you do a balance transfer, what’s your husband’s card? £6,700. If that £6,700 was to move across to there, what would be the payments on that? Yeah, that could be an action to phone up and find out.
Let’s imagine that the new balance on another card at 0% reduce the payments by half, for example. All of a sudden we’ve pretty much pulled back the money we needed to do to bring things back into even kill. That could be one exercise. It could be that hubby goes and finds out with the card he is on and goes over to a 0% balance transfer, might allow him to do that. Or it might be that he can get a card himself and do a balance transfer there.
There are several things and I can’t give you advice on this but these are things that you could look at and certainly I’ve done in the past, and other people have done. So that’s one thing. And then we’ve got another card there, it’s on a reasonably high-interest rate. And then you’ve got the loan there. So, could we call the loan company and is it possible we could see if we can get the interest rate down on that. Yes.
Well okay, what about that 0% credit card your husband’s got with £3,000 limit, or you’ve got another card over here with 0%. Is it possible that you could pay off that Loan? It’s only a couple of grand. What if you pay off the loan and you move that loan onto a 0% credit card? Oh wow, the interest rate on the credit cards on the lean or whatever it is, 4, 5, 6%, you can get it on a 0% card you could reduce your payments.
So what we are doing is we are looking at practical solutions to reduce the monthly payments, and that’s an exercise you’re going to have to do yourself. I can’t guide you on that because I don’t know what your situation is, but I’m giving you hypothetical situations, where someone can readjust the interest rate to bring their monthly outgoing costs down.
And of course, there’s the mortgage as well. Speak to a mortgage broker find out if I can do a refinance on my house or switch to a lower rate interest that I’m currently getting at the moment. What if I could reduce my payments from £750, £800 down to say £600 or something like that, great.
So that combination of things hopefully will improve the situation and finally job situation. I can increase the number of applications. What if you went for a lower salary to start with? What if you took a job sooner? Instead of it being £3000 a month it’s £2600 a month. Yes, it is less than you were getting before, but that suddenly and significantly improves the household income. “Yeah that’s true I hadn’t thought about that, I can even go part-time.” Yes, part-time, reduce outgoing costs, but the interest rate down. Great, how do you feel? “A lot better.”
So that’s the process.
Do your description, break it into three parts, catalogue logically what the financial situation is. Then off the back of that step three is look at some ways to improve that, what actions can you take.
In most cases that massively reduces the anxiety down for the person that is experiencing it.
Woah that was a bit longer than I thought, hopefully, that was useful.
Dr Ro signing out and I shall see you on one of my future videos.
Disclaimer: This video or written publication does not offer investment or financial advice and nothing in them should be construed as investment or financial advice. Our publications provide information and education only. The information contained in our publications is not and should not be seen as a recommendation to use any particular investment strategy. Always seek financial advice from an independent financial adviser around your own personal financial situation.
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