In the previous section on culture, I touched on the idea of extremes – too much or too little leads to challenging outcomes. This is particularly true in terms of behavioral health.

A couple of researchers recently found that a moderate amount of current money management stress is actually optimal. Yes, you need to have your needs met. If you have too much stress over money, wondering how to pay off all those bills and debts, then having more money will help resolve much of that stress and you’ll have a greater sense of overall well-being. Makes sense, right? How many times have you thought, “If I only made more money?!” But there can be too much of a good thing. It turns out that there reaches a point where if all your needs are met and you have really low amounts of current money management stress, then adding more money to the pile will actually decrease your overall sense of well-being. It’s like saying freaking out is bad, but boredom and lethargy are bad too. You need the happy medium amount of stress (called “eustress“) that lights the fire, gets you out of bed in the morning, and keeps you engaged with the world.

When doing eviction prevention work, I would witness this dynamic almost every time. While the person was facing an eviction later that week or month, stress would be unbelievably high. They would make decisions based upon the most immediate need, which usually didn’t taken into consideration anything past Tuesday. However, once we found a way to pay off the outstanding debt and lifted the threat of eviction, then we could begin finding a way to bring in more income on a regular basis to meet those future needs. The stress would clear enough that her freaking out would evaporate for the moment. But there would be times I would have to remind them not to get too complacent – we weren’t out of the woods yet, just out of immediate danger. We needed to harness that eustress and find work that would provide income, and stability and fulfillment. Otherwise, it would be a case of pushing the inevitable eviction to another month, rising stress again, poor decisions, and the cycle continues.

Now, I know that if you’ve got time and energy to be reading this book, chances are good you’re not imminently facing eviction. However, these extremes in our sense of financial well-being often lead to negative issues in our health. And a lot of times, they’re completely subjective. Stress, apart from the host of physical impacts it has on us, can lead to anxiety and depression, and addictive behaviors that we adopt to cope with the stress.

A more likely scenario could be a situation facing many Americans, at all income levels: income volatility. Coupled with expense volatility – where your income and expenses vary month to month, by sometimes as much as 25% or more – this dynamic makes planning and meeting needs difficult, as they rarely seem to rise and fall at the same time. (For more on this, see the U.S. Financial Diaries project.)

One family I know (we’ll call them Jack and Tracy) went through a period where he took on commission based work, while she worked full-time, with benefits. There were months he brought in $5000 or $0, or anything in between. Even though the couple budgeted according to all the rules, using excess income from the fat months to fill in the deficit in the lean months, not knowing what each month would look like made it difficult to plan and thereby operate from a sense of stability. Some people are naturally more inclined to believe that all will turn out well in the midst of financial challenges, but most need some semblance of a base from which to operate. It’s as if Maslow’s Hierarchy of Needs became a dynamic triangle, where the level of met physical needs of food, clothing, shelter, gas and electricity, car, and cell phone starts to jiggle, causing everything above it to stress and crack: the levels of safety you feel, the patience and love you can express to your family, the bandwidth you can give to actualizing your highest potentials. The increasing stress took a toll: Tracy started spiraling down into some dark places with increasingly frequent bouts of depression, anger, overwhelm. Her sense that she had to carry the family as breadwinner, without enough resources to keep the family sufficiently afloat, while her husband worked 60-70 hour weeks, became a burden that over time, simply wore her down. Jack internalized his stress: his hands developed red splotches, he carried a pain in his abdomen for 12 months, and he became so exhausted and distracted that he rear-ended another car. Thankfully, no one was injured, but he did do $3000 of damage to his own vehicle. In the end, the family made it through. But how they did it is where the important lessons lay.

This book is a work in progress and we’ll all benefit from your input and collaboration. In the “Leave a Reply” below, please post examples, comments, questions, and needed edits. By posting, you grant permission for inclusion of any content to become part of the book, now or in the future, in whatever form it may take. I’ll give attributions to the extent possible. I know sharing about our financial lives can be sensitive, so if you want to share anonymously, please use the contact form instead and I’ll honor your request.

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