As the stock market jumps up and down and my accounts shudder, I think of the serenity prayer: Grant me the courage to change what I can change, the patience to endure what I cannot change, and the wisdom to know the difference.  To use Stephen Covey’s terms, grow the circle of influence, and shrink the circle of concern¹.  So how can we do that?

My first rule is exercise.  The amount of exercise you get is something that should always be in your control.  My secret is to wake up 1 hour earlier than I would normally wake up.  Before you groan that you won’t get enough sleep, a healthy body can do more with less sleep than an out-of-shape one can.  I take 10 minutes to get into appropriate clothes, 25 minutes of walking, 25 minutes to shower and get ready for the day.  You can increase the amount or type of exercise as you get adjusted to the routine, but I find a 25 minute walk is enough to get me going in the morning.  Doing exercise with a friend can help, but you have to stick with it, with or without them.  My walking companions are two Labrador Retrievers and they never miss a day.  This one hour change will allow you to start the day with more energy.  The first day or two you will feel more tired, but stick with it!  The extra energy effects kick in around day 3.  So, if you have a weekend off, that is a great time to start.

What does exercise have to do with trouble in the financial markets?  The primary benefit of this one hour shift in your day is that it increases your control of your world.  The financial markets are to a large extent outside of our control.  However, it has been shown that as our feelings of loss of control increase, our financial decision-making becomes worse².  So by focusing on things we can control, we can increase our ability to think clearly about things we can’t control.

The next thing we can control is spending.  Unlike exercise, you can’t always control spending.  However there are a number of places I find I have more control than I would like to admit.  Packing a lunch is almost always cheaper than buying it.  It takes planning the night before, but I can put dollars back in my pocket every night with a little peanut butter and jelly.  Making dinner is cheaper than buying dinner, and when I factor in the savings, even my cooking starts to look edible.  In these two areas, I can combine calorie counting and spending reduction.  This increases my control and improves my financial picture.  I am sure once you are on the look out, you can find many more ways to limit your spending, but these were areas that were draining my money and I saw real savings each day.

Taking my savings, I am building up my emergency fund.  I think the financial shockwaves are far from over and I need to have cash reserves in case of job change or some other emergency.  If I had credit card debt, I would pay that down first.  I am lucky enough to be free from the credit card monster.  The diet and exercise are in my control every day and that gives me something to hold on to as the markets move.  It is easy when bad news comes out of the stock market to focus on “money lost” as the single determinant of my happiness.  In any financial situation, money is only one factor in determining happiness.  Focusing on what you can control and having the courage to use those things to help prepare for the future, can help us be patient with those things we can’t change.