In these uncertain economic times, keeping your finances steady and your mind at peace is no small feat. However, the ancient Stoic philosophers’ wisdom rings as accurate today as it did centuries ago. By weaving these Stoic ideas into how you manage money, you can build resilience and stay level-headed no matter what the markets throw your way. Let’s explore 10 Stoic rules for finances, grounded in research, that can help you stay calm, come what may.
1. Focus on What You Can Control
One of the core Stoic principles is directing your energy to what’s within your power to change. Behavioral economists have found that people who zero in on factors they can influence feel less stressed about money and make sounder financial choices.
What does this look like in practice? Craft a budget. Set targets for saving. Sharpen skills that can boost your earning power. Zoom in on the financial levers you can pull yourself.
2. Practice Voluntary Discomfort
The Stoics believed in sometimes choosing a rougher path on purpose to build up your resilience. Research shows that people who occasionally opt for hardship are better able to weather financial storms.
Try it out. Live extra-frugally for a week or month at a time. This training can help you roll with the punches if money gets tight and help you value what you already have.
3. Cultivate Contentment
Stoicism emphasizes finding contentment in your current circumstances instead of constantly yearning for more. Studies suggest that people who practice gratitude and happiness tend to make more level-headed money decisions and feel more satisfied with their financial lives.
Regularly take time to appreciate where you are financially rather than constantly striving for the next level. You may find that you already have enough.
4. Embrace a Long-Term Perspective
For the Stoics, taking the long view was vital. Research shows that when it comes to investing, keeping your sights on a faraway horizon leads to better choices and more peace of mind when the market hits rough patches.
Map out a long-term financial plan and be disciplined about sticking to it. Don’t let momentary market jitters knock you off course.
5. Practice Emotional Regulation
Stoicism emphasizes keeping one’s feelings in check. Behavioral finance research has shown that reining in emotions is crucial for making clear-headed money decisions, especially when markets are volatile.
Before making major financial moves, give yourself time to reflect. Be sure you’re motivated by reason, not impulse or fear.
6. Prepare for Adversity
The Stoic technique of imagining worst-case scenarios also has a place in financial planning. Research indicates that people who contemplate and plan for potential money troubles bounce back better when misfortune strikes.
Stash away an emergency fund. Consider how you’d handle a lost job or big unexpected expense. Preparing for rainy days can give you resilience.
7. Seek Wisdom Continuously
A love of lifelong learning was a Stoic principle. Regarding money, research has linked ongoing financial education to more vital money management abilities and better economic outcomes.
Deepen your knowledge about personal finance, investing, and economic trends. The more you understand, the more wisely you can navigate your financial life.
8. Live Below Your Means
The Stoic virtue of moderation aligns with classic financial advice. A mountain of research shows that living below one’s means leads to greater financial security and less money stress.
Adopt a lifestyle that consistently allows you to spend less than you earn. With the surplus, you can build security through saving and investing.
9. View Wealth as a Tool, Not an End
The Stoics saw wealth as a “preferred indifferent” – excellent but not needed for a perfect life. Studies show that people who treat money as a means to an end rather than the end goal tend to have healthier approaches to finance.
Get a clear mental picture of your financial objectives and how they fit into your values. Then, use money as a tool to pursue those meaningful aims.
10. Practice Mindful Consumption
Stoicism advocates approaching life with intention, which also applies to spending. Research has found that consuming mindfully leads to wiser financial decisions and more satisfaction with what you buy.
Before big purchases, pause to reflect. Ask yourself if this choice aligns with your values and long-term financial goals. Spend with purpose.
Case Study: Felicity’s Journey to Financial Serenity
An urban planner, Felicity found herself constantly stressed about money despite her stable career. She earned a decent salary but often felt like she was living paycheck to paycheck, never quite sure she was making the right financial decisions. To regain control and peace of mind, Felicity discovered Stoic philosophy and began applying its principles to her financial life.
She started by focusing on what she could control, creating a budget, and setting clear financial goals. Felicity also practiced voluntary discomfort by periodically living below her means, which helped her build resilience and appreciate the wealth she already had. She made more thoughtful, rational financial choices by cultivating contentment and gratitude.
Embracing a long-term perspective, Felicity developed a financial plan aligned with her values. She started educating herself about investing and committed to living below her means, using the surplus to build an emergency fund and invest for the future. Felicity also practiced mindful consumption, carefully considering whether purchases aligned with her goals and values.
As she continued to apply Stoic principles, Felicity noticed a profound shift in her relationship with money. No longer a source of stress and anxiety, her finances became a tool for creating a life of purpose and contentment. By focusing on what mattered, Felicity found herself better prepared to weather economic uncertainties and make decisions supporting her long-term well-being. Armed with Stoic wisdom, she had discovered the path to true financial serenity.
Key Takeaways
- Focus your energy on the aspects of your finances that you can control, such as budgeting, saving, and developing your earning potential.
- Practice voluntary discomfort occasionally to build resilience and be better prepared for financial challenges.
- Cultivate contentment with what you have rather than constantly pursuing more, which can lead to better financial decisions and satisfaction.
- Take a long-term perspective on your financial planning and investing to avoid being thrown off course by short-term market movements.
- Keep your emotions in check when making financial decisions, especially during volatile economic times.
- Prepare for potential financial setbacks by building an emergency fund and considering worst-case scenarios.
- Continuously educate yourself about personal finance, investing, and economic trends to make well-informed money decisions.
- Live below your means and use the surplus to build financial security through saving and investing.
- View wealth as a tool to achieve your goals and live your values, not the end goal itself.
- Practice mindful consumption by reflecting on whether purchases align with your financial goals and values.
Conclusion
Weaving these ancient Stoic principles into modern money habits can cultivate the resilience to weather financial ups and downs with equanimity. The Stoics remind us that natural riches are not counted in dollars but in strength of character and tranquility of mind. And that kind of wealth is within reach, whatever the economic forecast.