Tag: peter drucker

Tips for Reducing Financial Stress

tips for reducing financial stress

If we are honest with ourselves sometimes our financial stress is caused by our expectations not being met. We want things to go one way with our finances and they go the other. Below are some tips for reducing financial stress in your life.

Losing a job, the inability to find full-time work, paying bills on time, and not being able to deal with the increasing costs of living can be disappointing.

When this happens, when our financial reality does not line up with our expectations, we can sometimes become stressed. Try the following tips to help you reduce your financial stress.

Set SMART Financial Goals to Reduce Financial Stress

Goals provide course of action. And financial goals provide direction for your financial matters. They should determine how you spend your time and your money. When setting goals, decide what you want, where you want to be, and what you want your money to do. Further, when you set goals, set goals that are SMART (specific, measurable, achievable, realistic, and have a time constraint).

The best goals are the ones that cause you to “stretch” as you do your best to reach them.

Make Your Time and Money a Priority

Use the “80-20 Rule” originated by Italian economist Vilfredo Pareto. The 80-20 rule says that “80 percent of the reward comes from 20 percent of the effort.” The key to prioritizing is to identify the valuable 20 percent.

Once identified, prioritize your time to work on the items with the greatest reward. If you value managing money well, prioritize the time it takes to manage it well. Knowing where you stand with your finances will help you reduce feelings of stress.

Take Some of the Stress Off and Be Flexible wIth Your Spending

According to Peter Drucker, a management consultant, author, educator, and the described father of modern management, “Doing the right thing is more important than doing things right.” Doing the right thing is effectiveness; doing things right is efficiency.

Be flexible when working on your money, focus first on the urgent, effective task, then concentrate on the important, efficient task.

Reduce Financial Stress by Planning To Spend Your Money

Using time to think and plan is using time wisely. Some would say that if you fail to take time for planning, you are, in effect, planning to fail. Additionally, be consistent with that time. If Monday after work is your money management time, then work your money Mondays after work.

As I have written before, managing money is a job, it takes time, so plan accordingly.

The tips for reducing financial stress above can help you reduce money stress in your life. Be careful with stress as it can cause mental, emotional, and physical health issues. How do you manage financial stress? I would love to hear from you.

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Tips to help you Reduce Financial Stress

According to Peter Drucker, a management consultant, author, educator, and the described founder of modern management, “Doing the right thing is more important than doing things right.” Doing the right thing is effectiveness; doing things right is efficiency. 

Sometimes stress is caused by expectations not met.  We think things should go one way with our finances and they go the other.  When this happens, when financial reality does not line up with our expectations, we sometimes become disappointed, and stress results.  Use the following tips to help you avoid money stress and lower financial stressors. 

Plan to Spend your Money

Using time to think and plan is using time wisely.  In fact, if you fail to take time for planning, you are, in effect, planning to fail.

As I have written before, managing money is a job, and it takes time, so plan accordingly.

Set Financial Goals

Financial goals should provide direction to your life and determine how you spend your time and money.  When setting goals, decide what you want, where you want to be, and what you want your money to do.  Further, when you set goals, set goals that are SMART (specific, measurable, achievable, realistic, and have a time constraint.)   

The best goals are those that cause you to “stretch” as you do your best to reach them. 

Prioritize

Use the “80-20 Rule” originated by Italian economist Vilfredo Pareto.  The 80-20 rule says that “80 percent of the reward comes from 20 percent of the effort.” The key to prioritizing is to identify the valuable 20 percent. 

Once identified, prioritize your time to work on those items with the greatest reward.  If you value managing money better, prioritize the time it takes to manage it better.   

Be Flexible

According to Peter Drucker, a management consultant, author, educator, and the described founder of modern management, “Doing the right thing is more important than doing things right.” Doing the right thing is effectiveness; doing things right is efficiency. 

Be flexible when working your money, focus first on the urgent, effective task, then concentrate on the important, efficient task.

The tips above can help you eliminate or reduce money stress in your life.  Be careful with stress it can cause mental, emotional, and physical health issues. How do you reduce financial stress?  I would love to hear from you.

A Household Budget Strategy

According to Peter Drucker, a management consultant, author, educator, and the described founder of modern management, one thing that beats strategy is culture.  Actually, Drucker said, ‘Culture eats strategy for breakfast.”  A good spending plan strategy, how you plan your spending or how you work your money, can be affected by your culture. 

I love the game of chess.  It’s an interesting and intriguing game in that you use the same pieces, but every game is different.  I also like that; It’s a game of strategy and planning.  That is because I believe a good strategy, or plan of attack, can do almost anything.  It can even help your spending plan. 

According to Peter Drucker, a management consultant, author, educator, and the described founder of modern management, one thing that beats strategy is culture.  Actually, Drucker said, ‘Culture eats strategy for breakfast.”  A good spending plan strategy, how you plan your spending or how you work your money, can be affected by your culture. 

Culture is defined as a shared understanding that emerges from shared experience.  Its customs, social institutions, and achievements of a particular people group.  I could go in so many directions here as research has shown that, for example, people get their financial advice from family and friends most often.  And these are the people who most often are our culture and help make your culture.  Just know that culture plays a significant role in how we manage our money.  It’s not right or wrong it’s just a factor.

Budgeting Strategy

One of my budgeting strategies is to consistently work with my spending plan so that I stick to it. Another strategy could you could use might be the 50 30 20 strategy made popular by Senator Elizabeth Warren where 50% of income is spent on needs, 30% is spent on wants, and savings makes up the last 20%.

Creating a spending plan that works, is a process and what I mentioned above should be done to help you in the process of making a winning spending plan.  Your strategy is how you go about the process.

Culture Trumps Strategy

Sometimes we can come to a place, for example, where we do not track our spending and do not stick to the spending plan and become so good at not doing what we know we need to do to manage our money better.  We actually prevent ourselves from moving forward with our money.  According to the Harvard Business Review, culture is the habits that allow for cooperation by assumption rather than by negotiation. Culture is not what we say but what we do.  Culture is based on values.  It is what we value that creates our culture.

When we do not Follow Through on Our Budgeting or Spending Plan Strategy

For whatever reason, when we don’t budget or track spending or do not follow up on the spending plan, you are allowing it to beat you.  Creating a spending plan that works for you and your family is a process.  Your strategy is how you go about the process.  How you tackle those things that need to be done to make your spending plan successful in your household. 

Do you have a Budgeting Strategy?

Suppose you are spending your money with a plan and tracking your spending and following through on your budget, great.  If not, the great thing about budgeting is that you can start today doing those things that will help you win with money.  And if you do not have a spending plan create one today. 

Share your spending plan strategy and subscribe to my blog and learn how to create a winning and manageable spending plan for you and your family.    
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