Managing Money Stress

[00:00:00] Dr Elizabeth Scott The stress that comes from finances can trigger health issues. And the reactions to all that stress can make us not take care of ourselves as much.  

[00:00:13] Jennifer Borget Money and stress, two things that often go hand in hand. When finances feel out of control, the stress can seep into every part of life, impacting your mood, your energy, and even your relationships. And during times like the holidays when expenses can pile up, that stress can feel even heavier. But it doesn't have to be that way. You can effectively manage your money anxiety no matter the season. In today's episode, I'm joined by Dr. Elizabeth Scott, an expert and stress management and author of 8 Keys to Stress Management. Together, we'll explore simple steps you can take to reduce financial stress and find calm and everyday life. Later, Lauren Yoder, VP of product management at Northwestern Mutual, shares how financial planning can help lift the weight of money worries. Let's dive into practical steps to help you live with less stress and more confidence through the holidays and beyond. Thank you so much for joining us, Elizabeth. Can we start by just having you introduce yourself, telling us a little bit about what you do?  

[00:01:17] Dr Elizabeth Scott I have a Ph.D. in psychology and a master's in counseling. And I use positive psychology principles to help people manage stress and all the different areas of their lives. I'm author of 8 Keys to Stress Management, a book that focuses a lot on this, and I contribute to very well in mind and have contributed to other sources as well. And basically, I help people with mindset shifts and fixing what they can and developing coping strategies around the things that aren't movable, and money as a big source of stress. So this is a big focus.  

[00:01:52] Jennifer Borget I'm so excited for this topic, because mindset is like such a big thing that I love to talk about. And I know money is also a huge common source of stress for people, especially during the holidays and many points out in the year. Why do you think money is such a trigger for stress?  

[00:02:07] Dr Elizabeth Scott Money is so deeply connected with both our survival and our identity, impacts the roof of our heads, the food on our tables, and even our sense of belonging and success. So when there's financial uncertainty, like not knowing, you know, if you can cover rent or unexpected medical bills, it triggers the same kind of primal fear that early humans felt when they were facing scarcity and, you know, threats to their survival. So a very high proportion of adults feel report feeling stressed about money because of all these factors. In fact, the APA did a survey and found about 72% of adults report feeling stressed about money. So money is sort of like oxygen when it flows easily. You don't think about it. But the moment you feel short of breath, whether it's because of debt or job loss or financial emergency or the holidays, it becomes all you can focus on.  

[00:02:59] Jennifer Borget Then you really start to feel that strain for sure. What what kind of emotions do people typically associate with money that contribute to this stress? I imagine shame and maybe guilt are some of those.  

[00:03:11] Dr Elizabeth Scott Yeah, You hit two of the big ones. They're, you know, the big, heavy emotions, shame, guilt, regret, fear. People feel shame because they feel like they shouldn't be feeling this financial stress. They feel guilt if they spend money on it and then regret it later on, you know, items that maybe they didn't need if they spent emotionally or sometimes even items that they didn't eat, they might feel guilt that they don't have more. There's also regret of our past financial decisions. Fear of failure about not having enough in the future. There's a lot of really heavy feelings tied up with money, and these emotions are often tied to our identity as well. So people can feel judged by their financial standing and they can also feel like there's a lot beyond their control. It's also a little bit isolating. People can feel like they can't really talk to others about this because of, you know, a feeling of shame and a feeling of not being enough. So managing money can kind of feel like driving in a heavy fog. You can't see what's coming next. And every choice feels like it's high stakes. It's kind of exhausting to navigate. And, you know, you experience more stress the longer you go and all of this stress can really accumulate. And, you know, your fight or flight response gets triggered and it contributes to a sense of chronic stress.  

[00:04:32] Jennifer Borget And that just sounds horrible, like, chronic stress, because I know stress isn't just something that we feel in our head, like, it actually can impact other areas of our health. Like what are some physical effects of stress that you see?  

[00:04:44] Dr Elizabeth Scott As you mentioned, stress is like a physiological reaction as well. Small stressors that, you know, are few and far between aren't that much of a problem. They trigger our fight and flight response. And, you know, it's happens. It's stressful and it's over. But with chronic stress, the big bad guy, you never really get a chance to recover from the stress you feel announced. A lot of the stress you feel with financial stress. So it raises our cortisol levels, which impacts sleep digestion and immunity. And when our immune systems are, you know, affected by chronic stress, that can leave us susceptible to, you know, colds, the flu or any other illness or condition that might come up. It can cause headaches, muscle tension and weight gain over time. But it's also linked to serious health conditions, like heart disease, diabetes and blood pressure. And, you know, a lot of the time, people won't take care of their health because of stress. And this can become an even bigger problem. So it's the stress that comes from finances can trigger health issues. And the reaction to all that stress can make us not take care of ourselves as much.  

[00:05:58] Jennifer Borget I guess, I haven't really thought about it that way. I mean, what are some of the harmful long term effects from long term stress over money?  

[00:06:07] Dr Elizabeth Scott That's the thing. Stress can be so insidious, especially chronic stress that it can really wear you down over time. So in the short term, you can get headaches, you know, digestive issues, colds, flus. But longer term, it can take a real toll on mental and physical health. So mentally it can lead to anxiety issues, depression, burnout, and then physically it contributes to inflammation throughout your whole body, which leaves you more susceptible to a lot of conditions that can lead to sleep disturbances, which again creates more stress and an overall weakened immune system. So it becomes this vicious cycle that feeds into itself. Financial stress is especially dangerous because again, the feedback loop of it creates, you know, a worse stress situation, and that can actually make people make worse financial decisions. The cycle can lead to unhealthy coping behaviors like overeating, excessive drinking, withdrawing forces from social support. And again, people don't feel as comfortable talking to their friends about many stress because there's some shame involved. And all of this can just kind of lead to even compulsive shopping, which makes the issue worse. You know, that's one way some people cope. So think of prolonged stress from financial problems, kind of like a dripping faucet where it might not seem like a lot at first. And then, you know, it's dripping, it's filling buckets, it's overflowing, and it's really affecting your wellbeing, whether it's your relationships, your physical health, your psychological health. It affects many areas of life.  

[00:07:49] Jennifer Borget Wow. And in your practice, what are some of the common situations where maybe you see people having this financial stress situations and things getting worse? Like what are some of those common situations?  

[00:07:59] Dr Elizabeth Scott You know, it tends to spike during major life transitions, like a job loss, divorce, a new baby, or sending kids to college, because these all kind of create new expenses and they also create situations where people have to sort of coordinate their decisions on stress and on finances, coordinate their decisions on finances, coordinate their values, on how to spend the money. And then you can feel, you know, a lot of stress about not having enough.  

[00:08:27] Jennifer Borget And you touched on something, you know, at the holidays. A lot of times parents, you know, they're they're trying to make it magical and all special, but they're also not wanting to blow the budget. How would you help manage, help parents manage those conflicting feelings and interest that they have?  

[00:08:46] Dr Elizabeth Scott You know, that's a great question, especially for now, because this is such a common stressor. You know, people tend to overspend because they want the best for their kids and they want to have, you know, just that magical experience. The holidays are about, you know, connection. But a lot of the time we confuse that with being about consumption. So I encourage parents to focus on experiences rather than things. There are a lot of experiences that you can have that are cheap or free, and kids are more likely to remember time spent together than the toys they receive now. It doesn't always seem like that when they're asking for what they really need to have that the other kids have. And sometimes we can give them those things and sometimes we can not give them exactly all of the things they're asking for, but we can give them, you know, those really special memories that when they're older, they think back on. And, you know, we always made cookies around the holidays or I love decorating the tree, you know, putting on music and just having it be more about the connection. So planning ahead and involving the kids and creating a holiday budget can also turn it into a learning experience. So they're focused on not just what they want, but on understanding that there are choices to be made. And you're also giving a gift to your future selves, you know, starting January by not being a stress. Families can also create new traditions like baking, crafting gifts, or even volunteering that make it meaningful without being expensive, you know, getting together with other family. So if you think of holiday spending like decorating a Christmas tree, you don't need every branch to have a gift. And sometimes it's the simplest ornaments that make the biggest impact. And if you can think about your holiday experiences that way, it makes you focus less on what you can't have and more on what you can do and what you can give.  

[00:10:35] Jennifer Borget Those are great tips right there. I'm like, yes, taking notes. And then I actually one of my gift ideas for kids this year is making experiences coupon book. So I was on the right track this year because I'm like, you know, I'm like, I but I like hearing that. And your ornament point also is, is a really good point because it's like my favorite ornaments aren't the super fancy glamorous ones, you know, they're like the sentimental ones that we made together, you know, my kids brought home from school or something. So that's a really good way to to think about that. Now, what are some simple daily practices that anyone can use to feel more at ease with their finances.  

[00:11:17] Dr Elizabeth Scott You know, that's a great question because there are a lot of simple things people can do. If you think about small, consistent actions rather than the big sweeping ones, these are the ones that really make an impact. So tracking your spending is a big one, and it really can just take five minutes a day. There are, you know, tools out there that can help you track or you can just do it the old fashioned way. And, you know, look at your credit cards, look at your spending. But if you do it consistently, rather than waiting at the end of the month or every few months, you know, I've known people and had clients who were afraid to check their spending because it's this big, scary, looming thing. But really being in touch with what you're spending, sometimes you don't realize it until you see it all written down. And when it's written down there in black and white, you know, in your statement or, you know, on the app where you can see where you spent, it makes your choices seem a lot easier to reevaluate and easier to move forward. Automating savings is another great one. So even small amounts add up over time and reduce to reduce this, you know, growing debt kind of thing because you're also saving, and it also reduces decision fatigue that people might experience where every single time they they save, they have to decide like, how much should I save? What can I do? If you just take the decision out of it and have it be automated, that can actually take a lot of the stress out of it. And then practicing gratitude each day. You don't necessarily think of this as a financial tool, but this actually can really help if you focus each day on writing down what you're grateful for. Before, if you, you know, are going on a shopping trip, look at what you already have before you go out and try to really feel the abundance that you already have. This is actually a way to feel less tempted, to have more. And even just looking at the small and free things that you have, it's like finding new things that you didn't realize that you had, and then decluttering your budget, reviewing it regularly and making adjustments as life changes. You know, maybe you can eat out less often and have family meals at home more often, things like that, really add up over time when in ways that people don't realize it. So it's kind of like tending to a garden, you know. If you water consistently, your garden will thrive. But if you kind of let it go and try to only tend to it once a month or once every few months and, you know, things look a little bit more bleak and flourishing less, you know.  

[00:13:49] Jennifer Borget What an insightful conversation. One that we can all relate to. Elizabeth's perspective on making the holidays about experiences rather than things really resonated with me, and it's something I'm definitely going to be keeping in mind this year. Her advice on taking small and consistent actions also feels like a game changer that could benefit so many of us. Next, I spoke with Lauren Yoder, who shared valuable insights on the spending cycles that often lead to financial stress and how having a plan can help bring more peace of mind to your finances. Lauren, so to start, can you introduce yourself and tell me about your area of expertise?  

[00:14:27] Lauren Yoder So my name's Lauren Yoder, and I'm currently a vice president at Northwestern Mutual working on digital products in the financial planning space. So I build out the financial planning tools that are advisors use for their clients. Prior to this, I want to say I've been in the financial services industry for around 20 years at this point. I used to work directly with clients of all different types, working with them on their financial goals as a certified financial planner.  

[00:14:55] Jennifer Borget Awesome. All right. So you've got a lot of experience working with people, probably. Then, you understand that balancing all your priorities is hard. I think one things that parents struggle with, especially at this time of year, is making the holidays special without breaking the bank. Do you have any advice on how to balance those things?  

[00:15:11] Lauren Yoder So absolutely. The first thing I'd say is to give yourself a little bit of grace, alleviate yourself from some of that burden. What we see in people oftentimes is this cycle that they create by getting stressed about their finances, they actually end up spending more, which you would think would be opposite. They spend a little bit more and then they become stressed about the fact that they spent a little bit more. So it's really important that we try and break that cycle by just breathing and alleviating some of the pressure that we're putting on ourselves. The second thing I would say that you should do is really prioritize all of the expenses that you're expecting on the upcoming holidays. That includes gift spending. That includes food, includes travel. I would say make a list of all those things, prioritize that list and see if there's anything that can just come off the bottom that may not seem as important to you when you winding up against everything else. And then the last thing I'll say is the best part about the holidays is that when they're over, we have a whole year to plan for the next round of holidays. The National Retail Association is estimating that the average person is going to spend a little over $900 on holiday spending in 2024. And so what that actually tells us, if we look ahead to next year, the breaks down to about $18 a week to be able to save. If you're able to put that aside, it's little, it's small. If you're able to change even that small habit, you're going to be in a much better spot for next year's holiday season.  

[00:16:36] Jennifer Borget Yeah, I know, we all have high hopes right at the start of the year. And I know when we talked with Dr. Scott about our worries and how worrying about our finances can really alter our actual feelings, like mentally and even physically. Is this something that your advisors see when they're meeting with their clients?  

[00:16:55] Lauren Yoder It's not uncommon at all. It's pretty common. And in fact, a lot of times when clients are reaching out to their advisors for either the first or second time, they're doing it because they have a major life event coming up. And attached to that is a lot of worry, not just financially, but so many other reasons. These big moments in your life, whether it's caring for an aging parent or having a child, all of these things weigh on them. I don't even think sometimes clients realize when they reach out to the advisor that they're really like dealing with this mental battle and this mental stress associated with these. I'll tell you, though, that when our advisors worked with their clients and they actually put a plan in place, they can see that the client is alleviated just by feeling a little bit more control and those unexpected things in those life events that are coming up and the stress just melts away.  

[00:17:46] Jennifer Borget So Northwestern Mutual did a study about how working with an advisor can actually help you feel better. Can you tell me a little bit about these findings? What does that mean?  

[00:17:54] Lauren Yoder Yeah. So this actually quantifies what I was just talking about. The study compares Northwestern Mutual clients who have a comprehensive financial plan to people in the general public. And I'm not going to get too into the weeds about what a comprehensive financial plan means, but basically it's a plan that includes a mix of investments and insurance products with Northwestern Mutual. The results of that study found that a greater percentage of comprehensive clients felt better about all sorts of aspects of their lives than people in the general public. These are things like feeling they can enjoy life more comfortably, being able to handle unexpected expenses, marital stress, having the ability to have money, conversations with their kids. And these are all things that are directly related to mental health.  

[00:18:37] Jennifer Borget So it's like this act of financial planning can actually help your mental health like that. You know, I know planning can make you feel better about something. But how does that actually help improve your mental health?  

[00:18:53] Lauren Yoder I'm going to use an analogy for this. So I'm a parent. If other people are parents, maybe they can relate to this a little bit. But I'll paint a picture for you. I am on a daily basis and juggling things like children, schedules, appointments, my work life and things that I need to do in my day to day life. That's stressful enough. Now imagine that you lost access to a calendar. You have no calendar. You have no foresight into what's coming. How your kids are getting from point A to point B. You actually don't know that they need to get from point A to point B, and you're just flying by the seat of your pants daily. That's what it's like not to have a financial plan. And just by having some of these things in place, it just allows you to feel much more in control and not worried about some of the simple things. You shouldn't be hard things on a daily basis, but if you don't have a plan and you're not thinking about them ahead of time, it adds a lot of mental stress and burden. So I would say to anyone who's feeling a little disorganized or like they're stressed out and they don't have that calendar in their finances, that's where a plan could really help.  

[00:20:01] Jennifer Borget How do you account for the things like, you know, you make a plan, but plans change. Like things don't always go as we expect and as people like are getting through the year, it's going to be stressful. And sometimes there's things that went off track or we lose track of. Maybe you feel like you spent too much over the holidays this year. Maybe you plan to save more than you actually did. What would you say to someone like to ease those feelings of maybe how they're ending the year?  

[00:20:29] Lauren Yoder The best comfort I can offer is that it happens. It happens to a lot of people and it's very common. It happens to a lot of us to feel that stress, especially at the end of a high, high financial spending season like the holidays. I'm going to go back to my point about giving yourself some grace, though, and make sure you actually give it to yourself and give yourself a little bit of leeway. And the best thing that you can do to start to feel better because it's it won't happen overnight. But taking these small incremental steps to just make some small improvements is really the path forward to alleviate yourselves from some of that burden.  

[00:21:08] Jennifer Borget And as you're talking about this, another analogy I'm thinking of is like working out and losing weight. I think a lot of us at the end of the year having these same regrets about, man, I really let go of my diet, you know, that didn't go as I was thinking, but giving yourself some grace and knowing, like, there's a way back from this, right?  

[00:21:27] Lauren Yoder Absolutely. So take, so take that example and play it out. A lot of times what you see is New Year's resolutions and people wanting to make a drastic impact on their diet and working out. And they go full force in January, and they try to do too much and change too much all at once. Financial planning is not really that different. If you just take small steps to change tiny daily habits even, it really sets you up for just a much longer term success.  

[00:21:52] Jennifer Borget Baby steps. Yes, I love that. Don't have to eat all that. What's the the analogy that they say or I think it's a poem like eating the whale like one bite at a time or something, you know, versus take it out all at once. Yeah. So do you have any advice on how you can set yourself up for like a stress-free end of the year, like getting your finances back on track for the new year. Maybe not. You know, doing a big overhaul, like you were saying, like, you know, thinking about taking it in bite size.  

[00:22:23] Lauren Yoder So I'll tell you, back to the bite size. Stress free. Like honestly stresses me out just thinking about that. We're going to start with something a little bit smaller and just do a little bit of less stress as we move forward. Because those bite size actions and those little things can just like help walk away. So back to saving 18 hours a week, that's such a small little thing that you can start to do to just be more intentional about where you're saving. Imagine a savings account next year that set up that has over $900 in it, and that account is titled Holiday Spending. Like how just picture yourself next year of how how much different that holiday spending will actually feel and how much stress you can actually take off of your back by doing that.  

[00:23:10] Jennifer Borget It's like your future self will thank you.  

[00:23:13] Lauren Yoder You'll never be upset.  

[00:23:18] Jennifer Borget I really enjoyed both of today's conversations and picked up some tips I'll be incorporating into my own life. I hope you did too. Here are some of my key takeaways. First, stress affects both mind and body. Chronic stress puts us in fight or flight mode, which can lead to physical issues like colds and headaches. That's why finding healthy ways to manage stress is so crucial. Next, give familiar with your spending. Elizabeth shared how clients often avoid looking at their credit card bills out of stress. But by taking the time to track spending, we can make smarter financial choices and ultimately reduce stress. And finally, financial planning is easier than it seems. Lauren highlighted that financial planning doesn't have to be overwhelming. With the right guidance, you can make informed decisions that fit your life, often with much less time and effort than expected. Visit Northwesternmutual.com/podcasts for information on how to build a better financial plan. This episode show page has a quiz to help you evaluate your financial plan and more resources to help you identify next steps.  

[00:24:32] Speaker 1 Data about a holistic financial plan is from Assessing the Value of a Holistic Advisor, Dr. Hal Hershfield 2024. 

[00:24:38] Speaker 2 Certified Financial Planner, Board of Standards. Inc. (CFP Board) owns the CFP Certification Mark, the Certified Financial Planner Certification Mark and the Asset Certification Mark with plaque design logo in the United States, which it authorizes use by individuals who successfully complete CFP boards initial and ongoing certification requirements.  

[00:24:55] Speaker 1 Northwestern Mutual is the marketing name for the Northwestern Mutual Life Insurance Company NM and its subsidiaries in Milwaukee, Wisconsin. Not all Northwestern Mutual representatives are advisors. Only those representatives with advisor in their title or who otherwise disclose their status as an advisor of Northwestern Mutual Wealth Management Company NMWMC are credentialed as NMWMC representative to provide advisory services.