Although it isn’t inherently associated with finances, stress often times arises from dealing with your personal financial issues, regardless of if you’re in a good financial situation or not.

In regards to finance, there are (in my opinion) good forms of stress and bad forms of stress. Most people tend to only see the bad forms of stress - this stress often discourages them from even dealing with their finances, which is a place that you don’t want to be - and a place I’ll touch on later this week. What causes stress? Things called stressors are basically the things in ones life that influence the level and frequency of stress. In order to manage stress, it’s important to manage these stressors effectively - and in order to do that, they must be identified.

Things that stress people out negatively vary drastically from person to person. If I were standing in a crowd, the person to my right might be fine with having credit card debt and paying relatively high interest rates on the cards, while the person to my right may think that credit cards are the worst thing available, and I lie somewhere in the middle. Something that doesn’t stress out one person is causing some people to rip out their hair. Because of the dynamic nature of stressors amongst a large group of people, everybody has to identify what they personally get stressed about. Credit card debts, working 9-5 for ‘the man’, whatever; write down anything that causes stress and is somehow related to finances. My big one is working 35 hours for ‘the man’ for close to minimum wage and feeling like I’m not making any progress. Being a college student, it’s something that I’ve been conditioned to live with, but I’m not satisfied with mediocrity.

Once you have a list compiled, arrange them by how simple they are to solve. Working 9-5 for somebody else, for example, probably ranks pretty low on the list - it’s quite difficult for most people to quit their job and still maintain their standard of living. On the other hand, if something that causes you stress is your credit card bills - or just managing your spending - chances are it’s easier to solve problems like this. Once you have the list arrange, start at the top and work your way down, eliminating them completely or figuring out a way to deal with them.  If your credit card bills are causing you a headache month after month, start paying down more to get rid of the debt quicker. Cut expenses (something I’ll get into later) if you don’t have the extra cash easily. If you’re like me and don’t want to be stuck in a 9-5 for 40+ years, find something that you like to do and learn how to make money from it; you won’t be sick of doing it and it’ll help you accomplish your goals.  The important thing to know is that when you’re tackling this list, it’s simply going to be impossible to knock off all of these peeves, at least quickly. Patience is a must, as is persistence. If you continue to make small changes that will help reduce your stress, you will be happily surprised over time.

Eliminating all stress isn’t necessarily a good thing, at least not for all people. It depends on how you operate, but I personally thrive off some level of stress. I’m a full-time college student and a full-time employee for a retail electronics store. I have about two hours each day where I can manage to sit down and relax, but it’s this hustle and bustle that keeps me going. Good stressors in my life, when it comes to my finances, include working full time. Being employed keeps me active and, I hate to say it, provides a ‘reliable’ source of income. I hate to say it because I wish I didn’t have to rely on trading my time for my money, but as of right now my options are somewhat limited. Being employed keeps me active in my own life, trying to change how I’m making my money and how I’m spending my time. By being stressed from my working situation, I am more motivated to make changes and find a ‘way out’.

Using seemingly negative stressors in a positive way can be a huge motivator. Above all, remember that everything will take time to change. Almost nothing can be changed immediately. Being able to cope with the stress in the meantime and being able to deal with the time it takes to change things is what makes or breaks people; it’s what keeps some people biting their fingernails and it keeps other people looking for alternatives to their current situation. The important thing to remember is that we all have a choice with how we deal with stress. Don’t bite your fingernails.

I have heard many a people say that they don’t need - or even want - credit cards. Many proclaim they are bad, and many say that they’re good. Both sides of the argument have valid points in some instances, but not all points made in the argument apply to everybody. Here’s my stance on the subject…

 What the ‘credit cards are bad’ people tend to say is that credit cards lead to financial problems. People will use cards, max them out on buying luxury goods and either fail to make timely payments, or get buried under mounds of interest fees and eventually, it leads to a financial breakdown. Many people I know live this type of lifestyle, charging what they really should not be spending money on. Some people do it to impress others, some people do it because it makes them feel better (until the bills roll in), others do it because they don’t realize they don’t have the money. I agree with this points.  Maxing out credit cards is never a good idea, especially if you can’t afford to pay it off.

Unfortunately, many people who say that credit cards are bad also refuse to take the time to properly educate themselves on how credit works and what it means.  Some of my friends max out their credit cards and don’t realize the repercussions; paying interest, for example. Sometimes they have the money to pay off their card in full, but don’t because they don’t realize they are paying interest. Proper education on credit card usage is vital - without being aware of how credit cards work, and how to responsibly manage them, it’s very likely that people will find themselves in problems.

What the ‘credit cards are good’ people tend to say is that credit cards offer flexibility and convenience. Being able to pay with a credit card is a convenience for most people; being able to pay at the pump, purchasing items online, utilizing 0% APR offers for larger purchases or balance transfers. Utilizing credit cards allows people the flexibility to pay over time, and a lot of smart credit card users will only do this if it’s on a 0% APR offer and they have a specific reason to not pay off their card in full. I also agree with this point. Credit cards are incredibly useful and convenient.

In addition, credit cards tend to be more secure than carrying around cash. A simple call to a credit card company if one has been lost or stolen will put a freeze on the card, or cancel it completely, and a new card can be issued. Many issuers don’t even hold you responsible for the charges made. If you lose cash, there isn’t anybody to go to for the most part.

All the above being said, I think that credit education is the single most important factor when deciding if a credit card is a good idea for you. Read about credit cards, how to use them responsibly, and start out small. Don’t go on a spending spree, and pay off your card in full every month to avoid paying interest. As with many things, moderation is the key. I don’t buy something on credit unless I can afford to pay cash for it. I use credit very frequently because it is convenient, I can pay my cards off a few weeks after the purchase and thus earn some interest on my money, and it helps build my credit history in a positive way. Building up my credit history is important if I want to apply for a home or car loan. Take the time to get educated before you decide to use credit cards, and make sure you are aware of your spending - then your credit cards will help you instead of hurt you.

I’m assuming that most readers of MTC believe that money, whether they like it or not, is an important factor in their life. Of course, though, not everybody is of the same belief.

Recently I came across a few posts on various forums and some of my friends and colleagues commented to me about how they think money is unimportant; one forum post even described money as meaning “absolutely zilch”. He went on to describe how happiness is more important than money, and while I agree with that statement, I think that he was underestimating the importance of money.

A majority of people trade their time for money. By putting in sometimes long hours at work, they get out a (hopefully decent) paycheck. Some people make more money than other people depending on many things including how important their job is perceived to be, how difficult it is perceived to be, and what sort of education or training is required to do it. I use the words perceived because I think that much of this is quite trivial. The importance of one’s job isn’t something that is agreed upon by all people; basically it’s agreed upon by whatever pays the individual for his or her time.

For everybody, money means food on the table. Money means a place to live. Money means clothes to wear. If nothing else, money provides the necessities. I also believe that money can help people be happy. I do not believe that having money inherently is pleasing, nor do I believe that buying “stuff” is inherently pleasing. Granted I may get some amount of joy out of purchasing a new car or video game, but the happiness I get from spending time with friends and family far outweighs this joy. I’ll make the assumption that for most rational people, this is also true.

Think about a world in which you don’t have to trade your time for money. Say you invest wisely and are able to live off dividends and various income streams (business investments, real estate investments, etc) coming in; you never have to work another day in your life. What will this do for your overall level of happiness? Chances are that it will skyrocket - no longer do you have to be stressed at a job that you may not like. Even if you do like your job and you continue to work, you don’t have to rely on the money coming in from it. For me, freedom to do whatever I please and be able to afford it is the ultimate happiness. Having hours and hours each and every day to socialize with family and friends, the important things in my life, without having to worry about if I’ll have enough money to eat will be an amazing feeling.

None of this would be possible, realistically, without money. Money is simply a tool in which we are able to trade for things that we want,things that we need; and if you invest it wisely enough, money can buy your time in the future.

Like it or not, money plays a huge role in the lives of all of us. Money allows us to enjoy the standard of living that we currently enjoy. To deny its importance is foolish. What people should realize, instead, is that money isn’t the only important thing; only that it is a tool.