We turn in a lot of directions these days and hear about poor mental health. The stress of concerns about getting COVID, children returning to school, and the safety of loved ones in a nursing home or hospital is causing individuals to be less patient. The shortage of supplies and consumer goods and the increased costs of others make us concerned about where costs are going. The stress of not finding work, having to return to the office, or being in a short-staffed office leaves many of us frustrated and confused.
On top of that –financial stress can be an added burden. There is a lot of fear. Maybe, about Social Security and Medicare not being able to pay benefits. Maybe, about how to handle debt that has increased during the pandemic. Maybe, about the unfairness of wages between new and long-term employees. Maybe, about how to handle rising costs as we see 10% to 25% increases in product and service costs. Maybe, about feeling that you need to retire before you are financially ready. Maybe, because you need to help support children and grandchildren.
What can you do about it?
Below are some suggestions that might help ease some of that financial stress:
Get organized. You need to know where you stand. Create or update a spending plan so that you know where your money is going. It would be best to balance your “wants” to ensure that current and future “needs” will be met.
Continue paying debt, find ways to decrease the debt load. Pay your student loans if you can afford to, even when not required. This will allow future payments to be lower or for loans to be paid off quicker. If keeping up with debt is a concern, stop incurring more debt by going to a “cash only” plan. Automate payments to avoid late charges. Look at ways to reduce the interest rates on debt – refinance mortgage and car loans (many are unaware you can refinance cars just like a mortgage, generally with no costs). Talk with creditors about lowering interest rates on credit cards. If struggling, you may need to ask creditors to go to interest-only payments. Do what you can do to make sure you minimize the impact of debt on your future.
Find non-traditional ways to earn income temporarily to help with a budgetary problem. Become a rideshare driver. Work a retail Christmas season job. Remember, if you do something like this, it does not have to be long-term. It is meant to help you get out of a challenging situation. Hold a garage sale or sell some items on Craigslist or e-Bay. Consider renting out your house through an Airbnb arrangement if possible. It can even be something as simple as cleaning out all your coin jars and turning them into funds you will use – helping the national coin shortage and providing you with additional cash.
Barter skills you have for things you need or for activities you do not like to do. Offer to mow someone’s lawn in exchange for a couple of home-cooked meals rather than doing takeout. Offer your skills with solving technology issues in exchange for cleaning services. Offer tutoring skills in exchange for someone running errands for you. I remember a coach once asking me if I would rather clean my house or hire a cleaner to clean if it meant I had to work two more hours a week. I would choose to work the two extra hours all day long!! What do you not like doing or do not have the time to do AND what can you barter in exchange to avoid having to do it?
What can you do to reduce general expenses? Grow your vegetables or herbs – some can be grown inside all winter long if you have the right sunlit spot. Increase deductibles on insurance policies to save on premiums or pay them less often if it makes a difference in the amount you pay. Review your cable bill – can you change how you get your television to reduce the bill? We now have more options in the Broome County area for Internet service. What can you go without for the next 6, 9, 12 months, or permanently? Cook more from scratch – and double the recipe to have one for an extra meal later rather than doing takeout. When you shop, pick up extras of sale items to avoid having to pay full price later.
Document the savings. Post it somewhere so that you can track it. You will be more likely to continue working on saving dollars if you see its impact over a week, a month, a quarter, or a year. Make it a game. If you have a partner and/or children, make it a game for everyone to see who can save the most – and the prize could be half the amount saved for the week. Consider issuing a challenge to see who can come up with the most creative way to reduce expenses.
With the holidays coming, it might be time to have that discussion about reducing what you spend. The national average reported that a family spends on Halloween is $94. The national average reported for a Thanksgiving dinner is $186.05. For Christmas, if you add the cost of gifts, decorations, and other non-gift items like food, the average cost is $998. These are the year 2020 numbers. With price increases that have occurred this year, we can expect these dollar amounts to increase.
What can you do to decrease your average? Homemade Halloween costumes from items you already have in the house. Maybe ask guests to bring a dish to pass instead of you shouldering the entire burden for Thanksgiving and/or Christmas dinner. Consider reducing the number of people you give gifts. Our family has talked about how we buy what we want when we want it, making gift-giving difficult. Instead, we may choose to do a Chinese gift exchange. We may take the funds and donate to a charity instead of purchasing gifts. We may plan to go somewhere and create an experience rather than getting another trinket. For example, this December, we will finally get to use the December 2019 Broadway tickets we bought as a birthday gift for our son.
Look at the many ways that merchants are willing to pay you today. Consider plans like Rakuten, Ebates, or Gas Upside that pay you for shopping. If you are a Weis or Price Chopper shopper, make sure you use your points for gas or grocery discounts before they expire. Make sure to take advantage of your cashback or whatever rewards you get for your credit cards. Use Loyalty cards to obtain savings. There are dozens of ways that merchants reward you.
While some of this might seem like a lot of work for small savings. Once it becomes a habit, it can take very little time to achieve some savings. A few dollars here and a few dollars there can add up to significant dollars over time. And – it helps you feel less stressed because you know that you are improving your financial future. If you need help, ask about our financial coaching program to help you stop living paycheck to paycheck. Call the Planning with Purpose office for information.