Money, Ice Cream and Controlled Stress

February 14, 2020

Allworth Co-CEO Scott Hanson shares how taking control of your finances can actually be good for your health.

No one likes to be told what to do.

I think it all starts when we’re small children and our parents insist that we stop eating all the ice cream (I used to think that they just wanted it for themselves).

Rest assured, as I have two young, ice-cream-loving kids at home, I’m not going to insist that you do anything.

I’m merely going to suggest it.

I’ve been thinking a lot about stress (though not stressing about it, mind you). Specifically, I’ve been thinking how “stressing out” about money is hurting us in ways we may not fully comprehend.

Here’s a stat: A plurality of people surveyed said that the #1 stressor in their life was money.¹

While small amounts of stress are okay, too much is not only physically toxic, it negatively impacts the decisions we make.

Chronic stress contributes to:

Heart disease
Stroke
High blood pressure
An increase in our sugar and alcohol consumption

For people who say that money is the #1 stressor in their lives, 88% say they worry about it “all the time.” ¹

I’d say that’s too much.

Someone once said to me: “Reduce your stress and thrive.”

Let’s approach it manageably. Because the more I learn about the impact of what stressing about our fiscal health does to our physical health, the more I’m convinced that if we can lessen stress by embracing small financial improvements, it’s something we should all be doing.

Here are three changes most people can make that should help you feel more in control, lower stress and, hopefully, keep you healthy and happy longer.

1. Track your spending (Please, TRACK YOUR SPENDING!)

I know people who’ve saved well and seem financially savvy who still say: “I don’t know where my money goes.” I also know people of more modest means who say the same thing.

Writing down everything you spend won’t eliminate debt or stress all by itself, but it’s one of those small steps that leads to more conscious spending. (I’ve seen this make a real difference in the lives of several people.)

Tracking will likely slow your spending and help clarify where your money is going. And that’s going to relieve stress by making you feel more in control.

Buy a little spiral notebook and obsessively write down everything you spend for 60 days. Try it and see what good things happen.

2. If you’ve carried credit card debt for more than six months, it’s probably out of control.

While some debt is okay (borrowing to open a business or buy a home), the debt that stresses people out the most has to do with credit cards.

Debt can be scary and can cause feelings of shame. Those feelings, while common, certainly aren’t helping you financially, nor are they reducing stress or making you feel like you have control.

So, if you’ve carried $5,000 (or more) in credit card debt for more than six months? Do this: First, list all your non-secured debts. Then identify the highest interest rate card and attack it.

That’s right. Pay the minimum on all the others and send every dollar you can at that one card.

Now, the “snowball” method—paying off your smallest card first, and then on to the next—is another way to pay down debt. Emotionally, the snowball approach has some benefits, but it’s less financially prudent than attacking the higher interest card first. So, if you’re serious about tackling debt, then your highest interest rate card should be the first to walk the plank.

Just like keeping track of your spending, implementing a plan to conquer your debt will relieve stress and make you feel more in control.

3. Create a plan (or find someone to share the burden).

One of the key reasons (if not the single biggest reason) people seek my guidance is to relieve their stresses about money.

Because if you’ve saved well and you still feel stressed and out of control (as so many people do)? You need to lighten your load.

While a professional should help with things like investment management, retirement planning, and hopefully give you estate planning and money-saving tax planning recommendations, probably the biggest thing a good advisor will do is to explain exactly where you stand financially, and then create a detailed plan to help you reach your goals.

Another important trait of a good advisor is to keep you from making emotional financial mistakes (either mistakes because you’re emotional, or mistakes [or decisions] that cause you to feel emotional).

Sometimes, the advice I give is not what people want to hear. That’s because, sometimes, the truth is hard to hear.

Other times? I’ll meet with people who are too close to their own financial situation to see things clearly. And, still many other times, the advice I give relieves stress because I can look at their situation dispassionately.

Other than the joy of reaching your financial goals, emotion tied to money should have no place in your world.

Whether you do it alone, or whether you get a qualified, fiduciary professional to help, creating a plan will relieve stress. It will also make you feel better, move you closer to your financial goals, and, ideally, improve your long-term prospects for better health.

¹^{https://www.manulife.ca/business/plan-and-learn/healthy-wealthy-workplace/healthy-finances-lead-to-a-healthier-life.html}

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¹Barron’s 2024 Top 100 RIA Firms. Barron's© magazine is a trademark of Dow Jones L.P. The ranking of independent advisory companies is based on assets managed by the firms, growth, technology spending, succession planning, and other metrics.

² Retention Rate Source: Allworth Internal Data, FY 2022

³ The NBRI Circle of Excellence Award is bestowed upon NBRI clients meeting one or both of the following criteria: Total Company score at or above the 75th percentile of the NBRI ClearPath Benchmarking Database and/or improvement of five (5) or more benchmarking percentiles in Total Company score over the previous survey.

⁴ As of 7/1/2024, Allworth Financial, an SEC registered investment adviser and AW Securities, a registered broker/dealer have approximately $22.5 billion in total assets under management and administration.

⁵ InvestmentNews 2020 and 2021 Best Places to Work for Financial Advisers. The ranking reflects survey responses and scores completed by both employers and employees. Employers report their organization’s workplace policies, practices, and demographics. Employees complete a survey designed to measure the employee experience.

⁶ 2021 Value of an Advisor Study / Russel Investments

⁷ Ranked 9th Top Wealth Managers By Growth in Assets in the U.S. from RIA Channel, 2022. RIA Database and RIA Channel are registered trademarks owned by Labworks, LLC.

⁸USA Today Best Financial Advisory Firms 2024. The ranking is based on the growth of the companies’ assets under management (AUM) over the short and long term and the number of recommendations they received from clients and peers.

⁹NBRI Best in Class Ethics 2023. The Best in Class level is bestowed upon clients performing at or above 90 percentile of the NBRI ClearPath Benchmarking Database.

^✢ Scott Hanson, Investment Advisor 2005, 25 most influential people in the financial services industry. The ranking reflects 25 people who Investment Advisor magazine believes have had or will have the greatest influence on the financial services industry.

^✼Pat McClain, InvestmentNews 2014, Invest in Others Community Service Award, presented to an advisor who has made an outstanding impact on a community through managerial contributions to a non-profit organization.

^†Financial Times, FT 300 Top Registered Investment Advisers, June 2019. The ranking reflects six areas of consideration including the company's years in existence, industry certifications of key employees, AUM, asset growth, SEC compliance record and online accessibility and calculates a numeric score for each company.

Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.