Money Used to Make Me Vomit, It Doesn’t Anymore
An insanely low cost of living is about more than being frugal
I used to stress over money to the point of throwing up. Financial stress contributed to twenty pounds I should have never gained and the bad breakup of a romantic relationship.
It took too long to realize what now seems obvious. I needed to do the hard work to make relatively simple moves to quell my financial anxiety.
Academics have a construct (of course!) that encapsulates chronic stress over money:
We define financial worry as repeated and negative thinking about the uncertainty of one’s (future) financial situation, while financial rumination refers to repetitive, passive, and pessimistic thinking about the possible causes and consequences of one’s financial concerns.
That definition comes from a January 2020 paper in the Journal of Economic Psychology that also relayed the following data:
- “According to the Gallup-Sharecare Index, daily surveyed in the period 2013–2017, 32–40 percent of US-citizens worried about their finances in the last seven days.”
- Thirty-four percent of middle-income American households, 14 percent of high-income, and a considerably higher 63 percent of low-income households “reported being moderately or very worried about not having enough money to pay monthly bills…”
As I reviewed the academic literature, I focused on financial worry and rumination (FWR) rather than related concepts because it considers “the negative, repetitive mental processes underlying one’s financial concerns.” And that’s really so much of what we get at in our conversations about money on Medium.
To be better with money — and in most areas of life — we must shift mindset. We need to acknowledge negative and unproductive psycho-emotional habits and thought trajectories and flip the script.
What if money decisions — and our relationship with money in the day-to-day — could be less stressful or even stress-free?
The great Niklas Göke recently weaved a thoughtful case against making finance “personal.” I see literally nothing wrong with his argument except that I don’t agree with it.
His logic is sound. His reasoning persuasive and logical:
I don’t like the term ‘personal finance.’ It tries to wrap money into our identity. It makes money look like bread. That’s a bad idea. Getting your finances on track and healing your broken arm aren’t the same thing, but given the status we have elevated money to in our society, most of us feel like they are.
There’s a difference between your identity and your relationships, and so while it’s true that you must own your relationship with money, it does not make money a part of who you are.
I don’t make finance “personal” because I assign money some extraordinary status. In fact, I make it personal to take money down several notches.
If you can have truly vulnerable conversations with yourself about money — the types of talks you might long to have about life or sex with a lover — you have taken the first step to properly situating money in your life. To not let money dictate your self-worth, but to allow it to be a true means to righteous ends.
We often allow money to define us because we think we need it to buy more things. To become something. To have something to show for all of our hard work. To cement our place alongside our peers in society. We view money through an aspirational lens.
This is not personal finance. It’s merely an agglomeration of reasons to explain why people live beyond their means.
My view of personal finance — and the world — has made me obsessed with an insanely low cost of living.
Drilling this discussion down to the pragmatic. An insanely low cost of living goes beyond the basics of being frugal. It has other practical manifestations that help foster a healthy relationship with money.
It‘s a Direct Path to Stress Relief
I thought I had an insanely low cost of living at roughly $2,500 a month. Then I reviewed my spending and discovered a more than feasible path to eliminating an additional $700 or so in monthly expenses. I take two key things away from this exercise:
- Just like you can always eliminate words from something you write, you can always remove expenses from your budget. Not all poor people are actually poor. They simply spend money on things they don’t even come close to needing.
- When you already maintain a low cost of living, removing an expense makes you all the more nimble.
If I was spending $10,000 a month (I know people who do, and then some) and I eliminated $700, I probably wouldn’t think much about the 7 percent decrease. And this makes sense on all levels. If you’re spending $9,300 a month, $700 feels like throwaway money. It almost becomes throwaway savings. Found money.
However, the 28 percent reduction in going from $2,500 to $1,800 makes that $700 feel like a windfall. If you don’t indiscriminately spend the $700 surplus, you can use it as stress relief.
Not go out and get a massage stress relief. Not buy the girls and boys drinks at the bar stress relief. Not a weekend at the coast stress relief. But the stress relief that comes with being cash secure. With having a enough money in your emergency fund to provide financial comfort and allow you to operate from a position of strength.
This is what I mean when I think about making finance personal.
It Makes You More Nimble
When you have an insanely low cost of living, you can make spending decisions that temporarily or even permanently increase your expenses with much less stress.
If you make $5,000 a month and spend $4,500, you’ll likely (hopefully) fret harder over adding, say, $250 to your budget.
However, if you make $5,000 a month and spend $2,500, you’ll be more at ease tacking on a few more dollars. This doesn’t mean you shouldn’t critically assess additional spending — especially if it’s purely want-based — but, again, you do it from a position of strength.
And this is really the thing — operating from a position of financial strength. In my experience, this is the only way — outside of being filthy rich — you can drastically reduce or truly eliminate financial worry and rumination. It’s the only way you can change the thought patterns that stress you out about money.
I feel everything intensely and immediately. I think about everything deeply and introspectively. I can’t separate the practical and seemingly mundane from the personal. They’re inextricably linked.
It’s not about making finance personal, it’s about how and why you make finance personal.
If the conversations you have with yourself about money revolve around how you can decrease its meaning and attendant toxic effects in your life while increasing its practical utility, you’re probably on the right track.
This article is for informational purposes only. It should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any significant financial decisions.
