Whether we realize it or not, we each assign our own rules to money. For example, let’s assume you received a bonus from your employer. How would you treat this payment? Would you spend or save these dollars differently than the funds you receive in your regular work pay? If so, have you ever wondered why?

While the bonus and the regular work pay are both sources of income, it’s common for people to think and feel differently about each of them. This phenomenon is called mental accounting1, which separates money – and the decisions about how money is used – into distinct categories. In reality though, regardless of where the money comes from, how you spend or save each dollar will impact your overall financial circumstances.2 (If you are interested in learning more about this topic, check out Daniel Ariely and Jeff Kreisler’s book, Dollars and Sense.)

When you have an accurate awareness of your cash flow (the amount of dollars that enter and exit your budget each month) and discover margin, then you have the freedom to plan more intentionally for long-range goals, like retirement.

The opposite is true when there is a lack of clarity and control over income and expenses and no margin exists. Having little or no money left at the end of the month to pursue important financial goals can be nerve-wracking.

Perhaps that’s why six out of ten Americans say finances are their main source of stress.3 In fact, it’s been reported to keep folks up at night and cause them to be unproductive at work. Consider these stats: 
  • 43 percent of employees who are distracted by their finances spend three or more hours at work each week dealing with their financial issues.4
  • 70 percent of human resources professionals say financial concerns affect employees’ performance.5
  • 84 percent of employees attribute their financial stress to a lack of control.6

Clearly, financial stress is taking a toll on our performance at work and our overall quality of life. So, how can we reduce our financial stress and get our cash flow under control? Here are a few recommendations:

  • Think about how you think about money. For example, the next time you receive a tax refund, merit pay or cash inheritance, pause and think about how any spending or saving decisions concerning these sources of income might differ from those made concerning your regular work pay. If there is a difference, how does each decision support your monthly budget needs and long-range financial priorities?
  • Think twice about automation. It has become so easy to purchase items with a pre-loaded credit card on file, such as songs from iTunes or books from Amazon. It’s actually painless and requires very little thought or effort on your part, which is precisely the customer experience retailers want you to have. But what if you removed your credit card authorization from one or two of your merchant relationships? Would you save a few bucks each month if you forced yourself to think about individual purchases and experienced the pain of paying?7 If so, how much of a difference over time would it make if you used the cost-savings to pay down debt or put aside for retirement?
  • Take advantage of financial wellness services sponsored by your employer. Savvy employers have recently picked up on the vital need to come alongside their employees, and offer financial wellness services designed to alleviate financial stress, ranging from budgeting seminars to targeted campaigns on reducing student-loan debt. In fact, 83 percent of employers now offer financial wellness services of some kind to their employees – a remarkable increase from only 20 percent just two years ago.8

Getting your financial house in order isn’t always the easiest task. If you would like to learn more about how to deal more effectively with cash flow or financial stress, please reach out to a CFP® professional in your area today.


1. “Mental Accounting Matters,” Journal of Behavioral Decision Making, Vol. 12, 183-206 (1999), Richard H. Thaler
2. Daniel Ariely and Jeff Kreisler, Dollars and Sense, HarperCollins, pages 41-51, 2017
3. 2017 American Psychological Association’s “Stress in America” Survey
4. PWC’s 2018 “Employee Financial Wellness Survey”
5. SHRM 2014 “Financial Wellness in the Workplace Survey”
6. Financial Finesse’s 2015 “Financial Stress Report”
7. Daniel Ariely and Jeff Kreisler, Dollars and Sense, HarperCollins, pages 84-85, 2017
8. “Employers Turn to Providers for Financial Wellness Program Offerings,” Lee Barney, Planadviser Magazine, May 2018