Worrying about finances can keep you awake at night
Stress for Success
May 27, 2008
Financial anxiety is at or near the top of what stresses most because it’s your security – your survival – that’s threatened. You probably obsessively worry about it, lose a lot of sleep over it, or escape your financial reality through increased use of alcohol or drugs.
In recent weeks I’ve addressed lowering this stress by setting up and living within a budget, following money-saving ideas, and setting up an emergency fund. All of these suggestions can lower financial anxiety. But how can you deal with that minute to minute fear that you experience?
All stress, financial or otherwise, begins and ends with what you say to yourself about it. So if constantly worrying about finances keeps you from sleeping well, it’s your worried self-talk (your beliefs) that’s keeping you awake. To minimize this moment-to-moment stress listen to what you’re thinking, challenge it when it’s anger/fear-based, and ultimately change it to lower your stress.
Anger /fear-based self-talk simply indicates that you’re anxious. These survival emotions are intended to motivate you to take positive action to solve whatever is triggering them. Along with taking the necessary action to handle your money problems, challenge the following thought patterns:
Catastrophizing includes rigid words like, “always, never, no one, everyone, etc.” E.g., “I’ll always be alone in trying to keep my head above water!” Whenever you use “always,” stop and challenge yourself by finding evidence that it’s an exaggeration. Will you never in your entire future find a mate to share life and finances with? Your perception becomes your reality. So assuming you’ll never find a mate probably makes it more likely.
Pessimistic thinking suggests that your present financial situation is:
ongoing; it’ll never end versus it’s a temporary setback
affecting every aspect of your life including your family and professional life, not just your financial life
completely your fault
Pessimism can be more realistic than optimism, however, it depresses, therefore stresses you, keeping you from seeing stress reducing options.
Challenge pessimistic interpretations. For example, “I’ll never get out of this hole I’ve dug for myself. I’m such a loser.” Will you really go to your grave in this same financial hole? “I’m such a loser,” suggests that it’s not just in finances that you’re a loser but in life in general. Instead, remind yourself of your success in other life areas.
§ Affirm how you need to be: Consistently replace rigid and pessimistic thinking with an affirmation stating how you need to be to get your financial house in order. “I’m frugal, financially responsible, and patient in getting out of debt.”
For survival reasons, the human mind tends to drift to the negative when not focused on something. Rein it in by staying occupied and consistently replacing stressful thinking with your affirmation. It won’t make money appear but it allows you to focus on resolving your financial woes.
This too shall pass so learn from past financial mistakes. When the good times roll again prepare for the inevitable slump that’s sure to follow.
Jacquelyn Ferguson, M. S., of InterAction Associates, is a trainer and a Stress Coach. E-mail her at www.jackieferguson.com with your questions or for information about her workshops on this and other topics and to invite her to speak to your organization.
Tuesday, May 20, 2008
Building up your savings a great stress reducer
Stress for Success
May 20, 2008
Spending less than you earn seems simple enough, but apparently not for Americans. CBS News reported recently that Americans’ annual savings rate is only .4%, versus Germany’s 10.4% and France’s 12.8%, leaving many Americans financially stressed!
It’ll lower your stress to create an emergency fund in case you lose your job, or a hurricane blows your roof off. Aim for enough cash to cover three to six months of expenses. For monthly expenses of $4000, you’d need $12,000 to $24,000. That’s a lot of money.
Difficult as it may be, it’s worth it because of the freedom it provides. So if you hate your job but feel powerless to leave because of financial responsibilities, having this cash gives you options.
To successfully create an emergency fund you must:
Save money regularly. Consider savings a bill that you must pay.
Use it only for emergencies
To get started:
First, pay off all credit cards and commit to never carrying a balance again. Since credit cards typically charge a minimum 18% interest, and savings pay only 3%, logic says to pay them off before starting your emergency fund.
Saving $12,000 could take years so start by putting aside at least $1,000 as a cushion to help break your dependence on credit cards. Use it versus credit to cover unexpected expenses.
Split your income above expenses between savings and investments. Once you’ve reached your emergency fund goal, put all extra money into investments.
The Kiplinger Letter, an excellent financial newsletter, also recommends that you:
Pay yourself first, at least 10% of your income or as much as can, from each paycheck before it’s spent on anything else. Have it automatically deposited into your savings.
Plug spending leaks. Track your spending for a few months. Check out Kiplinger’s system at http://www.kiplinger.com/personalfinance/tools/budget.html. Include virtually everything you spend, including that $2 morning coffee. Once you know where your money goes look for areas to reduce. What can you give up? Cut back? Downsize? Create a revised budget and track your expenses for as many months as necessary until you automatically live within this new budget.
Save extra money, weather from Uncle Sam or a work bonus. If you get a raise, stick to your existing budget and put the extra income into your savings account. Once you’ve paid off a monthly bill in full, continue to put that money into your savings account.
Consider three features for where to put your emergency cash:
§ Accessibility: because it’s for emergencies it must be available whenever you need it. Earmarking money in your checking account is too available. Open a separate savings account and access only in case of emergency.
§ Safety: put your savings into an FDIC-insured account versus the stock market.
§ Profitability: get respectable interest. Talk to a financial advisor about high-yield money market accounts or go to Kiplinger’s free Internet search for the best rates at http://www.bankrate.com/kip/rate/mmmf_mmasearch99.asp?web=kip&prodtype=chksav
Get started saving something soon, no matter how little it is. It’s a great stress reducer.
Jacquelyn Ferguson, M. S., of InterAction Associates, is a trainer and a Stress Coach. E-mail her at www.jackieferguson.com with your questions or for information about her
Stress for Success
May 20, 2008
Spending less than you earn seems simple enough, but apparently not for Americans. CBS News reported recently that Americans’ annual savings rate is only .4%, versus Germany’s 10.4% and France’s 12.8%, leaving many Americans financially stressed!
It’ll lower your stress to create an emergency fund in case you lose your job, or a hurricane blows your roof off. Aim for enough cash to cover three to six months of expenses. For monthly expenses of $4000, you’d need $12,000 to $24,000. That’s a lot of money.
Difficult as it may be, it’s worth it because of the freedom it provides. So if you hate your job but feel powerless to leave because of financial responsibilities, having this cash gives you options.
To successfully create an emergency fund you must:
Save money regularly. Consider savings a bill that you must pay.
Use it only for emergencies
To get started:
First, pay off all credit cards and commit to never carrying a balance again. Since credit cards typically charge a minimum 18% interest, and savings pay only 3%, logic says to pay them off before starting your emergency fund.
Saving $12,000 could take years so start by putting aside at least $1,000 as a cushion to help break your dependence on credit cards. Use it versus credit to cover unexpected expenses.
Split your income above expenses between savings and investments. Once you’ve reached your emergency fund goal, put all extra money into investments.
The Kiplinger Letter, an excellent financial newsletter, also recommends that you:
Pay yourself first, at least 10% of your income or as much as can, from each paycheck before it’s spent on anything else. Have it automatically deposited into your savings.
Plug spending leaks. Track your spending for a few months. Check out Kiplinger’s system at http://www.kiplinger.com/personalfinance/tools/budget.html. Include virtually everything you spend, including that $2 morning coffee. Once you know where your money goes look for areas to reduce. What can you give up? Cut back? Downsize? Create a revised budget and track your expenses for as many months as necessary until you automatically live within this new budget.
Save extra money, weather from Uncle Sam or a work bonus. If you get a raise, stick to your existing budget and put the extra income into your savings account. Once you’ve paid off a monthly bill in full, continue to put that money into your savings account.
Consider three features for where to put your emergency cash:
§ Accessibility: because it’s for emergencies it must be available whenever you need it. Earmarking money in your checking account is too available. Open a separate savings account and access only in case of emergency.
§ Safety: put your savings into an FDIC-insured account versus the stock market.
§ Profitability: get respectable interest. Talk to a financial advisor about high-yield money market accounts or go to Kiplinger’s free Internet search for the best rates at http://www.bankrate.com/kip/rate/mmmf_mmasearch99.asp?web=kip&prodtype=chksav
Get started saving something soon, no matter how little it is. It’s a great stress reducer.
Jacquelyn Ferguson, M. S., of InterAction Associates, is a trainer and a Stress Coach. E-mail her at www.jackieferguson.com with your questions or for information about her
Tuesday, May 13, 2008
Save money to lower your stress
Stress for Success
May 13, 2008
Last week CBS News reported that the average American household’s credit card balance is over $16,000 at an 18% interest rate! Racking up credit card debt is certainly the most common way to get into a financial pickle. Buying on credit is painless. It’s paying the bill that can cause the pain.
If you’re experiencing substantial financial stress make your number one economic goal to charge less and pay off more of your debt. It’s the best strategy for getting back to financial security. Leaving your credit card at home and using cash instead will help you accomplish it.
Here are other ideas to save money and reduce financial stress.
§ The bottom line rule: spend less than you earn (duh!)
§ If you have high credit card debt consider consolidating it.
§ Distinguish between what you want and what you need. You may need a cup of coffee but you want a latte. To save money buy the regular coffee and put the difference into a kitty that helps pay off your credit cards. Avoid buying what you want so you can afford the things you need.
§ Decide why you want to buy something. If it’s to feel good, don’t buy. Shortly after buying it, you’ll habituate to it and it won’t bring you pleasure any more. Prove this to yourself. What have you bought that you just had to have at the time that you now barely notice?
§ Sell things you haven’t used for a year, including what’s in paid storage, and put the proceeds toward credit card debt and reduce your storage fees.
§ Find ways to make more money.
§ Shop farmer’s markets versus just grocery stores
§ Refinance your mortgage, car loan or other debt at a lower rate, if possible. Read the fine print, however. Know what you’re getting yourself into.
§ Search for less expensive insurance and lower your telephone and cable bills.
§ Drive older cars.
§ Save $100 a month, or whatever you can afford. Give up unnecessary things to save this. As soon as you can, increase the amount you put aside every month. Teach your children to start this in young adulthood. Teach them the power of compound interest.
§ Don’t buy something simply because it’s on sale. Also don’t spend money just because you have it.
§ Get involved with an inexpensive hobby to avoid the boredom that can fuel impulse buying.
§ Shop with coupons (www.coupons.com), use the Entertainment book, and buy things you “need” when they’re on sale.
§ Eat at home more.
§ Buy generic and off–brand products that you’re satisfied with.
§ Make a chart to first track the paying down of your debt and then the increase in savings.
§ Make yourself valuable at work by being easy to work with and keeping your skills current. Volunteer for jobs, especially ones that no one else wants.
§ Get educated on budgeting and saving (debtorsanonymous.com).
Next week we’ll look at the importance of accumulating savings.
Jacquelyn Ferguson, M. S., of InterAction Associates, is a trainer and a Stress Coach. E-mail her at www.jackieferguson.com with your questions or for information about her workshops on this and other topics and to invite her to speak to your organization.
Stress for Success
May 13, 2008
Last week CBS News reported that the average American household’s credit card balance is over $16,000 at an 18% interest rate! Racking up credit card debt is certainly the most common way to get into a financial pickle. Buying on credit is painless. It’s paying the bill that can cause the pain.
If you’re experiencing substantial financial stress make your number one economic goal to charge less and pay off more of your debt. It’s the best strategy for getting back to financial security. Leaving your credit card at home and using cash instead will help you accomplish it.
Here are other ideas to save money and reduce financial stress.
§ The bottom line rule: spend less than you earn (duh!)
§ If you have high credit card debt consider consolidating it.
§ Distinguish between what you want and what you need. You may need a cup of coffee but you want a latte. To save money buy the regular coffee and put the difference into a kitty that helps pay off your credit cards. Avoid buying what you want so you can afford the things you need.
§ Decide why you want to buy something. If it’s to feel good, don’t buy. Shortly after buying it, you’ll habituate to it and it won’t bring you pleasure any more. Prove this to yourself. What have you bought that you just had to have at the time that you now barely notice?
§ Sell things you haven’t used for a year, including what’s in paid storage, and put the proceeds toward credit card debt and reduce your storage fees.
§ Find ways to make more money.
§ Shop farmer’s markets versus just grocery stores
§ Refinance your mortgage, car loan or other debt at a lower rate, if possible. Read the fine print, however. Know what you’re getting yourself into.
§ Search for less expensive insurance and lower your telephone and cable bills.
§ Drive older cars.
§ Save $100 a month, or whatever you can afford. Give up unnecessary things to save this. As soon as you can, increase the amount you put aside every month. Teach your children to start this in young adulthood. Teach them the power of compound interest.
§ Don’t buy something simply because it’s on sale. Also don’t spend money just because you have it.
§ Get involved with an inexpensive hobby to avoid the boredom that can fuel impulse buying.
§ Shop with coupons (www.coupons.com), use the Entertainment book, and buy things you “need” when they’re on sale.
§ Eat at home more.
§ Buy generic and off–brand products that you’re satisfied with.
§ Make a chart to first track the paying down of your debt and then the increase in savings.
§ Make yourself valuable at work by being easy to work with and keeping your skills current. Volunteer for jobs, especially ones that no one else wants.
§ Get educated on budgeting and saving (debtorsanonymous.com).
Next week we’ll look at the importance of accumulating savings.
Jacquelyn Ferguson, M. S., of InterAction Associates, is a trainer and a Stress Coach. E-mail her at www.jackieferguson.com with your questions or for information about her workshops on this and other topics and to invite her to speak to your organization.
Monday, May 05, 2008
Creating a budget can ease financial worry
Stress for Success
May 5, 2008
How far will housing values plummet? Or gas prices rise? Is your job safe? Do you have enough money to get you through this downturn? Stress!
We can learn from smart real estate agents who’ve been through these ups and downs before; rather than overextend themselves during the good times they save more to get through the rough patches.
Unfortunately, many families have not done this and are ill-prepared for any economic downturn. Their financial anxiety often leads to alcohol and drug overuse, physical and emotional symptoms, and even increased domestic violence.
There are only two ways to have more money:
§ Earn more
§ Spend less
It’s simple.
If you’re worried about your finances, take control of how you spend what money you earn. Create a budget and live within it.
The first step is to know how you’re presently spending your money. For several months fill out a monthly spending record. Create a table with eight columns labeled: “category (under which list those below),” “week 1,” “2,” “3,” “4,” “actual,” “planned,” “plus or minus.” Then, list every cent you spend on:
§ Mortgage or rent
§ Groceries
§ Eating out/entertainment
§ Transportation
§ My clothing
§ Kids’ clothing
§ Debt repayment including credit cards
§ Insurance
§ Taxes
§ Utilities
§ Miscellaneous: haircuts, alcohol, medical, etc.
The first month is to track where your money goes. Study your spending habits. Identify in which categories you can decrease your expenses. In which categories are you spending more than you expected? Identify and avoid what keeps you overspending.
The following months are to create and stay on a budget that honors your priorities.
Next, compare your expenses to your income. The greater the deficit obviously the more cutting you’ll need to do. If necessary, to live within your income, debt restructuring can almost certainly be arranged by talking to your creditors before you miss payments (or miss too many.) Your income minus your essential expenses is the amount you have left to divide among your creditors. Call them. It’s better than filing for bankruptcy, which 2005 legislation made more difficult.
Be balanced in your approach, however. Don’t obsessively keep track of your expenditures year after year. The fear that drives this can also block your ability to think creatively on how to earn more and spend less. Also, even Debtors Anonymous recommends that you not totally deprive yourself when getting your finances in order. Set aside a small amount of money each month, within your new budget, of course, for special things for yourself and family.
Next week we’ll look at a plethora of ideas on how to cut expenses to keep you living within your means.
Suze Orman says, “… to have the capacity to take control of our lives – regardless of our bank accounts – commit to making the right (spending) decisions for ourselves and our family … (putting us) on the road to happiness. When you’re happy, you create your own financial stability by living within your means.”
Jacquelyn Ferguson, M. S., of InterAction Associates, is a trainer and a Stress Coach. E-mail her at www.jackieferguson.com with your questions or for information about her workshops on this and other topics and to invite her to speak to your organization.
Stress for Success
May 5, 2008
How far will housing values plummet? Or gas prices rise? Is your job safe? Do you have enough money to get you through this downturn? Stress!
We can learn from smart real estate agents who’ve been through these ups and downs before; rather than overextend themselves during the good times they save more to get through the rough patches.
Unfortunately, many families have not done this and are ill-prepared for any economic downturn. Their financial anxiety often leads to alcohol and drug overuse, physical and emotional symptoms, and even increased domestic violence.
There are only two ways to have more money:
§ Earn more
§ Spend less
It’s simple.
If you’re worried about your finances, take control of how you spend what money you earn. Create a budget and live within it.
The first step is to know how you’re presently spending your money. For several months fill out a monthly spending record. Create a table with eight columns labeled: “category (under which list those below),” “week 1,” “2,” “3,” “4,” “actual,” “planned,” “plus or minus.” Then, list every cent you spend on:
§ Mortgage or rent
§ Groceries
§ Eating out/entertainment
§ Transportation
§ My clothing
§ Kids’ clothing
§ Debt repayment including credit cards
§ Insurance
§ Taxes
§ Utilities
§ Miscellaneous: haircuts, alcohol, medical, etc.
The first month is to track where your money goes. Study your spending habits. Identify in which categories you can decrease your expenses. In which categories are you spending more than you expected? Identify and avoid what keeps you overspending.
The following months are to create and stay on a budget that honors your priorities.
Next, compare your expenses to your income. The greater the deficit obviously the more cutting you’ll need to do. If necessary, to live within your income, debt restructuring can almost certainly be arranged by talking to your creditors before you miss payments (or miss too many.) Your income minus your essential expenses is the amount you have left to divide among your creditors. Call them. It’s better than filing for bankruptcy, which 2005 legislation made more difficult.
Be balanced in your approach, however. Don’t obsessively keep track of your expenditures year after year. The fear that drives this can also block your ability to think creatively on how to earn more and spend less. Also, even Debtors Anonymous recommends that you not totally deprive yourself when getting your finances in order. Set aside a small amount of money each month, within your new budget, of course, for special things for yourself and family.
Next week we’ll look at a plethora of ideas on how to cut expenses to keep you living within your means.
Suze Orman says, “… to have the capacity to take control of our lives – regardless of our bank accounts – commit to making the right (spending) decisions for ourselves and our family … (putting us) on the road to happiness. When you’re happy, you create your own financial stability by living within your means.”
Jacquelyn Ferguson, M. S., of InterAction Associates, is a trainer and a Stress Coach. E-mail her at www.jackieferguson.com with your questions or for information about her workshops on this and other topics and to invite her to speak to your organization.
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