Forbes – July 1, 2021

People worry about money in good times and in bad. Surveys, pre-COVID, typically found that about seven-in-ten people were stressed about money at any given time. The impact of the pandemic on this stress? It exacerbated an issue that many of us already lived with.

Between the worry over health and general well-being of the world, people had to also fret about their jobs and affording their homes. According to a Gallup Survey , half of all workers said they earned less in 2020. In the US, 79% of women surveyed by Fidelity Investments reported feeling weighed down by stress and money, up from 67% the year prior. Nearly 90% of Americans expressed stress over money during the early days of COVID.

This stress may result from everything we have competing for our cash. Between saving for retirement, paying bills and the mortgage or rent and affording niceties, there’s a lot of demand for the money we bring in. When something like the pandemic hits, it throws all those concerns into the air, adding even more stress than we felt prior.

But with the pandemic waning, maybe now it’s time to try and reduce the stress you feel about your money moving forward. It won’t necessarily mean there’s more money in the investing account, nor will it reduce the different needs those funds must cover. Instead, it’s about switching some actions that help reduce the ever-presence nature of money in your life.

Don’t Day Trade

If want to increase the amount of stress in your life, then day-trade. If you do day-trade (even a little), then you can consider cutting it from your routine to reduce your stress. According to a new survey from the robo-advisor Betterment, 86% of day traders stress about money at least a little bit compared to 65% for non-day traders.

About one-in-four day traders have significant stress over money, compared to just 6% for non-day traders surveyed.

Two factors could play a role in this stress. First, day traders (despite all the stories of success) usually underperform those that use low-cost index funds or a passive savings strategy. A Taiwanese study found that less than 1% of day traders beat the returns from a low-cost ETF. In Brazil, a study found that less than 3% of day traders earned a profit, after fees. So the stress may come from the simple fact they aren’t actually making much money – and they believe they should make outsized returns.

The second reason has to do with the nature of day trading. If you’re constantly looking to trade stocks, then you’re constantly looking at your account. And, well, as you’ll see, that’s stressful.

Check Your Account Less

There’s a fine line between keeping track of your money in your investment accounts versus obsessively looking at your accounts. Those that have developed a balance in the number of times they check the accounts each month will have less stress concerning money.
More than half (56%) of those day traders so stressed about money in the Betterment survey check their investment account daily. One-in-four check their investment accounts multiple times in a day. Of those not day trading, only 18% check their investments account each day.

But when saving for the long-term, checking your account less regularly can reduce your stress levels and prevent a bad decision. The more you check your account, the more likely you’ll see a large decline. Since we fear loss more than exude happiness from gains, if you see a large decline, you’re more likely to make an ill-advised switch in your investments. But by checking it less regularly, you avoid seeing the short-term losses, and only capture the long-term results.

Since you’re investing for the long-term, those results are what matter.

Some of the Stress Will Ease As You Age (If You’re Investing Now)

One reason for the stress is something you can’t really do anything about: your age. During the pandemic, this age difference really stood out. According to a survey by the American Institute of CPAs, 75% of 18- to 34-year-olds were at least somewhat stressed about money during the pandemic. Only 27% of those 65 and older felt similar pressure.

Betterment’s survey captured similar results, with 69% of millennials and Gen-Z saying they’re somewhat or significantly stressed about money, compared to 53% for Gen-X and 20% for Boomers.

This not only indicates that as you age your wealth will build, but it will also reduce your stress. It also captures all the efforts you make now to grow your money in the future – like investing and saving for retirement. You can’t necessarily see the fruits of those efforts yet, which heighten the stress when you’re younger.

As you age, you will see those savings grow, which will eventually reduce your stress. That’s true, even in times of heightened anxiety.

By Ryan Derousseau, Senior Contributor

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