Finances

Emotional Finance, Spending and Debt – August Funding

Emotional Finance, Spending and Debt – August Funding

There are several different studies out there that talk about the top ten stressors in life and in most of them, financial struggles are right up there in the top 5 or 6 every time.  It doesn’t seem to matter if you are rich or poor or somewhere in between – we all seem to deal with financial stress and it can be overwhelming.  Our family is no different.

Sometimes finances can be stressful because a person may not have enough basic understanding to manage their finances, while other times maybe a major life event happened to really mess up any financial plans a person has had.

This article isn’t really about how a person got into this mess it is about how to deal with the emotional aspect of finance, spending and debt and basically get your head back on straight so you can move forward.  Sounds simple right?   I get it – believe me.  I have been there and done that more times than I can count.  So let’s map out a plan together.

The Small Stuff – August Funding

When I get overwhelmed with anything I allow myself the following steps and they work well.  I actually wish I knew this when I was in my 20s when my solution was to lock myself in the bathroom until I could handle the world again…  Yeah that worked well…

  • Allow yourself time to be emotional.  I compare this to grief.  You can’t move forward until you allow yourself time to grieve.  That can be now, later today, tomorrow or next week.  But at some point these emotions need to come out, be put in a bucket and put aside.  Don’t try to hold these feelings in – doing that can lead to resentment, regret, frustration and more.
  • Allow yourself a little bit of time to pretty much ignore it.  I know that seems crazy but the financial struggles will still be there tomorrow – take a day to just ignore it.  It isn’t going to fix itself overnight, this is potentially a big project.  Take a day for yourself – sit in the backyard and read a book; get on your horse and go for a long trail ride; go for a long bike ride or just sit in the sun on a beach in silence.  For me – I like to build things so I would build something then move on and move forward.
  • Then… it is time to move forward.  Make the decision that you are in charge of your destiny and you are going to do everything you can to make it a fruitful one.  You are not going to keep kicking that can down the road – instead you are going to become a financial expert!

Moving Forward

Create a Budget

  • Creating a budget goes a long way to giving you emotional peace.  It is kind of time consuming to create but once you do so much will become crystal clear and help you along your way.  I used to just pay my bills and wonder why I had no money left in the middle of the pay cycle.  But once I knew – really knew – what I was spending money on the light bulb went off.  Much of it seems innocent enough – $1 diet coke here; $1 burger there; etc… But those innocent little purchases can become $10 a day and $300 a month.  You don’t need an elaborate spreadsheet – mine literally has seven columns for my recurring bills handwritten in a notebook with each month having its own page:
    • Vendor/Company
    • Minimum Amount Due
    • Due Date
    • Outstanding Balance
    • % Rate
    • Amount Paid
    • Date Paid
  • Log all of your recurring bills and payments.  I get paid every two weeks so I actually also color code mine – everything that needs to be paid in the first paycheck is pink; in the second paycheck is green.
  • Pay more than the minimum balance – Don’t go crazy and try to solve your financial struggles overnight.  It didn’t happen overnight (in most cases) and it won’t be solved in a night.  Pick one bill and double or triple that payment – choose the one that has the smallest minimum due; the smallest balance; or the highest interest rate.  Then take that first paid off bill and roll all of that money you’ve been paying to the next and the next.  Once you are on your third to pay off – it starts moving really quickly.
  • Keep all receipts.  I mean ALL receipts.  I simply keep them all, tape them to a piece of copy paper, three hole punch and place in a binder.  You can be more elaborate with something like Quickbooks but this works just fine for me.  You will figure out what works for you… This is for a bunch of reasons:
    • You never know when you will need one – seriously now that I keep them I feel like I am always looking back on them for something.
    • Keep an eye on any recalls, class action suits etc… Many times you are eligible for a small something if you don’t have a receipt.  But if you HAVE A RECEIPT you are eligible for substantially more.
    • If you start a home business those receipts can come in handy when you are really trying to find anything legitimate to write off that you may have missed.
    • Most major retailers have a survey link at the bottom or on the back of their receipt for you to give your opinion and enter to win… I do them ALL THE TIME and yes sometimes I win because you’d be surprised how few people actually go through the trouble of filling them out.
    • And lastly – keeping all receipts will give you a strong idea about the little stuff you are spending money on.  In my case it gives me a very clear picture of how expensive my horses really are.
  • For a while I don’t recommend that occasional splurge.  What I do is when I finish paying off that first recurring debt – I allow myself that one month’s payment to splurge – the next month I start the rolling.  That is enough of a splurge for me.  But I will suggest that if you feel you need a built in splurge – schedule it, define it and stick to it.

Emergency Fund – August Funding

An emergency fund may seem impossible but it isn’t.  Even if you start the fund with just $5 every paycheck (and I highly suggest direct deposit with an online bank – out of sight, out of mind) at least you are doing something.  Perhaps as you pay off each recurring debt you increase it by $5 more every paycheck; or every time you receive a pay increase you put that increase towards your emergency fund.  Basically, define an achievable plan and stick to it.

Change the Things You Can and Accept the Things You Can’t

I love this motto and I refer to it often.  There are so many things we cannot change.  But I can change not buying a new blouse when I have an electric bill to pay; I cannot change having a medical bill for my special needs child.  Sometimes it is what it is and sometimes – it doesn’t have to be.

Keep a Positivity Journal

Really this process can be emotional at the start and maybe even a bit overwhelming but you will come to peace with it.  You will actually feel okay with finally knowing where all your money is going – every single penny.  In the beginning though a positivity journal is very helpful so you can really keep the focus away from spiraling emotionally.  Focus on your son’s beautiful smile and how happy he is to see you; your friends at work who are always willing to help; the fact that the sun is shining today… There are thousands of tiny positive moments in the day to focus on.

Ask For Help

If you don’t think you can do this on your own then definitely seek help.  There is definitely emotional peace in having someone objective help you through this difficult time.  You don’t have to do it alone.

 

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