How Money Worries Snowball — And How To Escape That Trap, According to Ramit Sethi
Written by
T. Woods
Edited by
Amber Barkley
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.
20 Years
Helping You Live Richer
Reviewed
by Experts
Trusted by
Millions of Readers
On a recent episode of the “I Will Teach You to Be Rich” podcast, hosted by entrepreneur, author and financial advice media personality Ramit Sethi, a couple named Nathan (age 35) and Linda (age 37) were featured guests, discussing how they argue about money constantly, mostly due to Nathan’s anxiety and stress.
The couple revealed that Nathan is obsessively fixated on their finances, constantly optimizing and re-optimizing them, fretting over retirement and how much inheritance will be left for their children. But Sethi offered some advice for them to ease their financial anxiety.
Snowballing Financial Fear
Nathan’s money fixation is so intense that he applied to be on Sethi’s financial podcast a whopping nine times and will even argue with Linda about living, spending and saving more like Sethi, and how Sethi makes him second-guess their joint financial decisions, all while she “just wants him to chill out.”
Through speaking with the couple, Sethi indicated how easily money worries can snowball, primarily through impulsivity, even with a financially comfortable couple like Linda and Nathan. Additionally, because the couple is so financially comfortable, they recently bought a new, expensive house. As a result, they can no longer spend the way they used to, causing them both to be very stressed, and Nathan in particular to chase after any kind of financial advice he can find — including Sethi’s.
Sethi defined this as typical American story, and described how financial anxieties can snowball: “Oh, it was the two of us. Maybe a little baby. And then we were living large. We rented, or we had a small little house. We would eat out, and we would travel, and it was fantastic. And then we got a big house, because we’re Americans. And then, uh oh, we can’t spend all the money we used to, because we have to repair our basement.”
Easing the Anxiety
Sethi countered Nathan’s anxieties — which are centered around trying to control of every aspect of his and Sarah’s finances as a means of feeling secure — by suggesting that, while financial management is important, financial micromanagement can lead to intense money worries and financial anxiety. As Sethi put it, it’s “almost like trying to stop the ocean from flooding by holding our arms out”: something that’s totally impossible and will only lead to chaos and failure.
Sethi’s suggestion to such money worries? Fluidity.
“When I think of calm, cool and collected with money,” he said, “I think of someone who’s fluid. They know their numbers: ‘What’s our income? What’s our net? Are we saving enough? What’s our saving rate, investment rate, asset allocation? When are we going to be a million? Those key numbers. And the rest of it, we can be fluid. We can have it live somewhere, but not have to control it all the time.'”
More From GOBankingRates
