Over the past couple of weeks I have had some really enlightening conversations with friends, colleagues, and family regarding money. For the average person and I think for them the topics are pretty mundane. However, I found myself rejuvenated by it. Maybe it is the fact that when I hear and read other people’s stories I don’t feel alone. Maybe it is because in a couple of cases I was told that this blog has helped people. Maybe it is because they helped me gain a little perspective. I am really hard on myself. I scold myself for being so stupid with money in the past and some stupid tax I have paid recently. I even scold myself when I go out and have fun, like I shouldn’t be doing that. However, one of my financial goals for this year was to live a little more, have some more fun, so I am doing exactly what I wanted to do. That still doesn’t stop the little voice in the back of my head saying you could’ve used that money to save, invest, or pay down debt (more on that little voice in another post). I am continually learning about my own personality with money and what other people’s personality.
One conversation in particular with a friend of mine a couple of weeks ago got me thinking about this. We got to talking about a variety of things and eventually the subject came to money. He knew that I had a blog, said that he had read it several times, and asked why I decided to share my story for the world to see. What struck me most about this conversation was with his utter frustration with money.
The thing is he wasn’t doing badly at all. In fact, he and his spouse were doing pretty well. They had several hundred thousands dollars saved in a retirement account, didn’t carry a lot of debt, they were gaining equity in their homes, and could afford to go on a vacation or two. By most standards they were doing well. But he, like me, had a lot of anxiety about money. In fact, he told me straight up he didn’t even know what he was invested in. He didn’t want to know, didn’t care, and the like. It was too hard. It was too overwhelming.
The key word he used was “overwhelming.” And I think that is the sentiment of a lot of people with money. We feel overwhelmed. I mean it makes sense. We are bombarded with consumerist messages all day that says we aren’t worthy if we don’t buy things. We have to have the latest of everything or it makes us look bad. We are told we don’t save enough and are scolded for doing so. We are told we have too much debt and that we need to get out of it pronto. And it isn’t just people who don’t have a lot of money. It seems all classes, including those who make lots of money (e.g. $250,000 or more….I guess that is the standard we use in the U.S.) have great anxiety over money.
Like I said I think that a lot of this that we are bombarded with various messages and we don’t know where to go or where to start. I feel that way ALL THE TIME! In fact, this blog has made me hyper aware of those situations, perhaps to the point of obsession at times. I will fully admit that, which is something I need to work on. However, even throughout the entire discussion with my friend I could see a solution(s) to one or more of the questions that we discussed.
My Solution to One Aspect of Being Overwhelmed With Money
One aspect of my discussion with this friend centered on the idea of investing. In fact, it seemed that is what gave him the most anxiety. He told me flat out that he wanted someone else to do it, someone else to make the decisions for him. It is too hard, too complicated, and takes too much time. He didn’t want to think about where his money went. Just someone tell him where to put it and that is where it will go. End of story.
I think my friend’s anxiety, at least with investing, is true for a lot of people. In fact, I think that is one of the root causes of why we save so little. Unless someone tells us to do it or mandates that we enroll in a retirement plan we won’t do it. Instead, grass will grow under our feet.
In this situation, this is where I don’t have a lot of anxiety. In fact, I get excited talking about the investing side of things. But I wasn’t always that way. I mean I have always had an interest in investing, stocks, etc. When I was in high school I wanted to be a stock broker. I didn’t even know what they were but they got to talk, lots of energy, and it seemed really exciting.
That excitement quickly wore off as I got interested in other things, but I continue to have a fascination and a general interest in investing and the economy.
Anyway, getting back to my friend’s anxiety I think there is a solution to it, but it takes a bit of effort on someone’s part. The solution is pretty simple: learn a new vocabulary.
What do I mean about learning a new vocabulary? I mean that whenever we encounter anything new if we want our anxiety to go down I think we have to approach that subject like we are learning a new vocabulary or even learning a new language. And investing in the stock market does have its own language. What is a mutual fund? Asset allocation? Bonds? Stocks? Balanced portfolio? Rebalancing your portfolio? What the hell are all of these terms and more?
Heck, understanding your basic 401(k) or a Roth IRA can be daunting for people. How much money do I save? Where do I save it? What do I do with it? I mean by the end of it it can seem like your head is going to explode.
And because it is so complicated and because people throw out these terms in articles, television, or blogs, people choose not to learn. It is too much. And because of that people don’t save. They don’t invest. They don’t have the time to do it.
The key to solving this dilemma you have to begin learning a new vocabulary.
And if you think about it learning a new vocabulary happens in all stages of our lives. We learn new vocabularies when we go to school, change jobs, get married, social norms, put together a piece of furniture, etc. We are learning new vocabulary all the time. We learn new vocabulary as a parent, brother, sister, husband, etc. We just don’t really think about it in those terms, but everyday we learn a little bit of a new vocabulary.
In my opinion, part of the key to stop from getting overwhelmed by investing is to learn a little bit about the vocabulary. And it isn’t hard to do. There are dozens of websites out there including Investopedia or the Wall Street Journal investing page. There are blogs, magazines, news sites, etc. That can teach anyone the basics.
That is how I started. I just started reading. And I read a lot. If there is one thing I am good at in this world and that is research. I am a pretty good researcher. Certainly, other people are not. But the key to lessening one’s anxiety over money, particularly investing is I think you have to frame your thinking that you are learning a new language, a new vocabulary. And we have to come to realize that we are learning new vocabularies ALL of the time. We might be more familiar with those things or they might seem more fun.
And I get it. The subject of money, for some people, can be about as interesting as watching paint dry. I certainly understand that. But, to me, so is learning about a new app or figuring out how to make something or learning a new workout. Whatever it is there are things we do and vocabularies we learn that aren’t the most scintillating in the world, but we do them anyway because they are important to how we live our lives.The key thing is to framing our learning about money as a form of a new vocabulary, a new language.
Every week, even though I write a personal finance blog, I learn a little new vocabulary about personal finance. Even if that item is just hearing someone else’s story about paying off debt, investing, buying a house, spending money on clothes, whatever it is, I continually learn. Last week’s financial tip was about a topic I had little knowledge of a few weeks ago, but I decided to learn a little something about it and then blog about it.
If you are feeling overwhelmed about money, particularly investing and/or other subjects. You aren’t alone. I feel overwhelmed. It is hard. But that doesn’t mean we shouldn’t learn about it. Even if that means starting with the basics like learning what a mutual fund is or what is a 401k, Roth IRA or whatever we have to start somewhere.
Ultimately, I am not saying that you are going to be good at this language or it will be interesting. And you won’t get all of it right away. In fact, there are some things you may never get. But that is why there are people out there to help you. Your local HR person, a financial planner, a website, a blog, and/or a search engine can all be great tools to start. This is too important of an issue to not to start somewhere. I think we just starting beginning to learn that a lot of the anxiety we have over money will be partially lifted. To paraphrase the GIJOE cartoon from the 1980’s, knowing is half the battle.