28 Sept 2022

Making Cents: Dealing with financial stress (part 2) - Liam Croke

Making Cents: Dealing with financial stress (part 2) - Liam Croke

Those with a plan, have much lower stress levels. It’s like they have a GPS system, and if they follow the instructions they’ll arrive at their destination

AS promised in last week’s article, I want to focus on 9 different ways you can get your financial life back under control and reduce those stress and anxiety levels. And the first is focusing on your...

Three Biggest Money Challenges.

I want you to write down what you feel your 3 biggest money challenges are.

The list could be a long one, but I’d say keep it to a maximum of three, so you don’t feel overwhelmed.

And on that list might be not being able to save enough, worrying about paying your bills on time, worrying about how much you partner spends, anxious that if you lost your job you’d run out of money before you were able to find another and so on

There can be any number of reasons which causes that knot in your stomach, and it doesn’t matter if they seem to be small and insignificant, write them down alongside the bigger ticket items.

Next you need to,

Take Stock

Before you can put a plan in place, you need to know what you are up against and that means assessing exactly where you are.

It means going through your bank statements, knowing how much you owe, what’s in your retirement account etc. and looking more closely at all of those areas that are most important to you.

And that might be a challenge for some, because up until now they’ve been so anxious about money, they just couldn’t, but you have to, if you want to break this cycle of anxiety.

Next you need to,

Test Your Reality

When I work with people who are anxious about their finances, I want to put their theories about why they are so anxious to the test, to see if they are founded in, reality or not.

And one gentleman I worked with last year, felt he wasn’t saving enough each month and thought he should have more in his retirement account than he did. So, I wanted to see if his perception was true.

We started by putting his numbers into an excel doc and assess where he was at with his mortgage, his savings, his pension fund, his monthly spending, his debt levels etc. and we quickly discovered that his finances were nowhere near as bad as he thought they were.

I put his numbers alongside what he should have accumulated based on his income and age, and he was actually ahead in every category. You see he didn’t know what numbers he needed to be referencing his against and just assumed, incorrectly that he was behind. He was relieved to see he was in a good place, and it all now made sense to him especially when someone showed him the logic behind his numbers.

Okay, once you’ve got someone to test your reality the next step is to,

Create a Plan

I’m not sure how you can achieve any of your financial goals or reduce stress levels without having a plan in place. Most people recognize the importance of having a plan, even the most basic of ones, but the majority just wing it and make it up as they go along, and they are the very ones who are, or will become seriously stressed.

Those with a plan, have much lower stress levels. It’s like they have a GPS system, and if they follow the instructions they’ll arrive at their destination. People who don’t, are going around in circles with the map out, rolling down the window asking for instructions from people who are as lost as they are.

And any plan you create, is predicated on the next stage and that is to,

Create a Spending Plan

Making a monthly spending plan is the cornerstone to your finances. Trust me when I say this.

And it doesn’t have to be very complicated. List your fixed and variable expenses and subtract them from your income now you know where the blockage is and what changes you need to make.

And you need to track your expenses on an on-going basis and people who do, tell me how it helps reduce their stress levels because they know exactly what’s going to happen before the month even begins, rather than having the monthly postmortem of where it all went, if they didn’t.

Commit to Action

Now you know what you have, to work with, and what needs to be done, it’s important you follow though and take action.

And it needn’t be massive immediate action either. Small steps are good. Be realistic, determine what you can do based on what you have at your disposal, and just commit to following through each month.

Get Help

And all this advice is fine and might make sense, but when you’re stressed it can be difficult if not impossible to handle everything on your own, which is why I’d urge you to look for help.

Some people I’ve encountered tell me how their financial problems got bigger as they tried to solve them themselves, and what started off small, gradually got bigger and bigger.

And bottling things up can make your financial situation worse. What you’re going through isn’t unique to you which is why you must seek out a qualified financial professional, someone you can lean on, someone who can put a plan in place for you, and someone you can call when things are proving difficult.

And it’s important to have a network you can speak with about what’s going on as well, and they could be friends, work colleagues, family etc. but remember they’re not the experts when it comes to finance.

Stress Alleviation Techniques

There are other methods that can help reduce stress levels and getting some regular exercise, can boost your energy levels and self-esteem. Relaxation techniques like mindfulness, meditation, breathing exercises, also are supposed to help enormously. I think finding an outlet, whatever that is that you enjoy doing will help.

And try to sleep better. Feeling tired only increases your stress levels and negative thoughts, and perhaps drink less alcohol and eat healthier foods as well because all, of these techniques have proven to reduce stress levels significantly.

Don’t Forget About the Positives

Taking stock of what’s good about your finances is also important.

It helps, because it can help calm your fears. It will help you recognize and appreciate that there are some areas that you are very good in.

And I know thinking positively doesn’t pay your mortgage or bills or helps you retire at 55, but it can reduce your anxiety.

If you only focus on one area of your life, it’s difficult to feel good about any other area. And I don’t want you to deny or dismiss the reality of your financial situation right now, but if you want to get your stress levels under control, you need to remind yourself about other areas in your non-financial life, that are good.

So, looking at what’s positive in our lives and appreciating what they are, helps put things into perspective when things become difficult.

Liam Croke is MD of Harmonics Financial Ltd, based in Plassey. He can be contacted at or

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