Money is one of the largest stresses in an individual’s life. We worry about the bills today and our financial future tomorrow. As the family’s CEO, primary caregiver or single mom, women face this stress on a regular basis. Follow these steps to take the stress out of investing so you can relax and enjoy time with family.
Determine your goals
The first step to reducing stress is to sit down and set individual goals. If you don’t know where you are going, you have no frame of reference to compare your progress to. Determine when you want to retire, what it will look like and what you need to do to get there. Set up your goals in a plan and work through each individual item at a time.
Set realistic expectations
Are your goals and your ability to achieve them in line with each other? If not, how can you make adjustments? Are your investment returns reasonable or are you hoping for the home run that will get you where you want to go? Be smart and think about whether the steps required to achieve your goals are achievable.
Focus on what you can control
Every investor should let go of what they cannot control and focus on what they can control. The most important investing decision an individual can make is to set up the asset allocation in their account that balances their goals and their risk tolerance. The allocation should look at the overall weighting of equities to fixed income and what is included in each. Once that is done, leave it and let the markets do what they will do. You cannot control the markets, so do not let the emotion of market movements control your level of stress and happiness.
Adjust your goals, if needed
Things go wrong, goals change, markets move up and down. When outside events continue to increase your stress even with a plan in place, set up a back-up plan. Determine whether that means you work longer, live on less now to save more or live on less in retirement. There are many options out there that allow you to adjust your plan as you go. Understanding these situations could arise and having a back-up plan in place to go to in the event something happens will give you more peace of mind.
No more of ‘keeping up with the Jones’
Stop playing the game of ‘keeping up with the Jones’. Don’t bend to the peer pressure that is always pushing you to have the best car or bigger house. One of the largest causes of unhappiness is comparing ourselves to others. If you can remove this worry and only focus on what is important to you, your level of happiness will go up and your level of stress will go down.