How to use the 80-20 ratio for financial wellness, no matter how much money you have

No matter who you are, what you make, or how much you have saved, anxiety about money in at least some form is a common denominator for most of us. Sure, the way in which we freak out about it differs (maybe you essentially hold your breath until your next payday, or maybe you’re more concerned about stock market fluctuations, or maybe both). No matter where you stand in your financial journey, the concept of money itself can be freakout-inducing to an extent that forging a friendly relationship with it can feel impossible. But during our latest Well+Good TALKS, which focused on financial wellness, panelist Paco de Leon, financial expert and founder of the Hell Yeah Group, offered a quick tip for maximizing good feels about cash that anyone with any amount of money can use. And, by the way, it’s a simple reimagining of the classic 80-20 rule.

“I think financial wellness is 80 percent of the time being chill, and then 20 percent of time freaking out,” de Leon said. “Even people who are wealthy and are going to be fine—they still worry. Human beings are hardwired [this way]. But if you can, 80 percent of the time, just be cool about it, that’s financial wellness for me.”

What’s interesting about de Leon’s suggestion is that it cuts back on the day-to-day way that we worry about our finances. (And, as a former full-time freelance writer, I really wish I were privy to this wisdom when I was living the invoice-to-invoice life, but I digress.) For instance, it’s easy to feel guilty about a pricey daily coffee for draining a certain amount of funds, but if you internally harp on the habit regularly, you’re both removing the joy it stands to offer you, and you’re engaging in self-loathing behavior each day—which is a hefty bulk of time. The coffee habit then quickly becomes self-defeating, and it doesn’t need to be that way—especially because it’s almost certainly not a realistic cause of your financial duress.

Instead of freaking out about lattes, work on cultivating strategies that propel you toward your goals and allow you to be chill 80 percent of the time. Examples? Design a budget, set a weekly money date, and consider getting a debit card specifically for your Fun and BS account.

Another way to apply 80-20 rule is to take stock of what’s stressing you out and contextualize whether it’s an expense that’s healthy and one you can make tweaks to afford comfortably. Let’s say that you stress about every financial choice you make, even when they feel especially responsible—like signing up for a gym membership, opting for better health-insurance coverage, trying a meal-kit subscription that’ll ideally help you cook more often. Obviously these are all expenses that add up, and the bottom line might be worthy of concern, but know that you don’t need to do all of the things. Consider what’s productive for you, where you are. What do you get the most out of, what can you swap for a less expensive dupe, and what can you do without happily so long as the choice doesn’t compromise your health?

Examine your financial profile and expenses, and note where you are, what’s realistic, and how your day-to-day looks. If your biggest concern is, say, that rent or a mortgage is eating up more of your take-home pay than you prefer, consider shacking up with a roommate, or moving, or making some shift so you don’t find yourself worrying so much about treats like coffee and healthy choices like a gym membership.

Ultimately, we’re all worried about money for some reason or another, but since there’s only so much that can change on the day-to-day, letting the thought of it deplete your energy more than 20 percent of the time isn’t good for you or, likely, changing your financial situation in a worthwhile way. Instead, simplify your money mind-set using the 80-20 rule as a guide, so those big changes to minimize smaller stressors can become reality.

Want to make other baby steps toward financial wellness? Here’s what a personal financial trainer wants you to know. And these budgeting tips might help you get a jump-start on your savings.