Money and Stress: Moving from Anxiety to Action

Photo Credit: Alan Cleaver

Photo Credit: Alan Cleaver

Are you stressed out about your financial situation? According to the American Psychological Association (APA) Study of Stress in America the number one source of stress for Americans is money. Money stress affects every part of our lives–our relationships, our jobs, even our health. Financial stress has a way of consuming our entire lives.

Similarly, the APA study found that adults ages 18-47 reported higher stress levels than their parents and grandparents’ generations. Young adults are stressed out by the rise in student loan debt, the bleak unemployment rate for recent grads and fears that they will never be able to accomplish their financial goals like owning home, retirement or even having children. Young adults today, myself included, are caught in a web of fear and stress about money. So what can we do?

We can, like many people that I know, choose to avoid the topic of money all together. We can choose to not talk about money, live the way that we want and let our credit cards take care of it. We can avoid our student loan payments and defer our credit card payments. If we don’t talk about it and don’t deal with it our money stress just will go away right?

We all know that the issues won’t go away and yet so many of us choose to avoid our money issues and end up stressed. But, there is another way. First, we can name it. We can take our money problems head on. It is scary and challenging, but it is necessary. We can own our debt (credit card or student loans). We can own our employment issues and lack of income. We can own the ways that we have lived beyond our income. And, when we name it whether by ourselves, to close friends or in a more public way to our communities we will find that we are not alone. So many people are dealing with the same challenges that we are, and they are just as afraid. While money issues may feel isolating, together we can hold each other accountable, help each other achieve financial sanity and maybe even effect real change around these issues in our communities. I encourage you, if you feel alone in your financial issues talk to someone maybe a family member, friend, spiritual leader, financial counselor or small group. Find someone or some people to support you on your journey to your financial freedom! It is amazing how naming your financial challenges and knowing that you are not alone has a way of alleviating stress.

As we begin to name our financial shortcomings, we should also take a look at our financial assets. Take a hard look at all that you have and be grateful. Maybe you or your spouse/partner has a good, steady job. Maybe you have a supportive family that is willing to help you financially. Maybe your debt is below the national average. Maybe you have found a supportive community to walk with you. Maybe you are just grateful to have a roof over your head and food on the table. It is so easy to focus on the negative things (what we don’t have), but we need to take time to focus on what we do have. We all have much to be grateful for and these are the people, resources and facts that will help us to hang on on the long road to achieving financial sanity.

Lastly, we have to make a plan to move forward. Create a sustainable budget for yourself and clear, realistic goals. Make it a goal to live within your means. Want help creating a budget? Check out these posts. Not sure that you can do it alone? Seek out financial help. If you are struggling with student loan or credit card debt, talk to the free financial counselors at LSS MN. Take a debt management course, like Dave Ramsey, at your local congregation or community center. Check out the financial resources available through your bank, investment company or insurance provider. Check out the posts on this blog. Find someone who is financially savvy who can serve as your coach. Be proactive!

You cannot solve money stress by yourself, but by naming your challenges, looking at your assets and making a plan you can begin to move forward and achieve financial sanity. The whole mission of this blog is to assist you on this journey. So get moving and know that Grace, the author of this blog, and hundreds of other frugal community readers are behind you!

Best Personal Finance Apps

mint androidAre you looking for an easy way to track your budget and save some money? These personal finance apps are one of the best ways to do just that. These apps can help you to track your spending, pay your bills, create a grocery list, and even find cheap gas! Here are five free apps to put on your smartphone:

  • Mint.com: This app comes from the makers of the popular personal finance website Mint.com. This app works in sync with the your free, Mint web account to automatically track bank accounts, credit cards, loans, spending, and much more. While you can’t modify your budget on the app, it does offer you easy access to look at your budget while you are out to make sure that you are on track. The app has the option of being passcode protected, so if you lose your phone no one has access to your accounts. The app is simple and easy to use, definitely the number one finance app in my book.
  • Easy Envelope Budget Aid: This app puts the popular envelope budgeting system on your phone. You can add some envelopes (budget categories) and then add a transaction every time you spend. It’s simple, clean, and free. Like Mint, Easy Envelope Budget Aid (EEBA) is an app that has been created to work together with its web tool which has a variety of free and paid plans. While EEBA functions similarly to many budgeting apps, it also has the ability to be shared with another family member or significant other.
  • Bill Tracker: This easy to use app allows you to view your outstanding and upcoming bills on your phone. It helps you track your bills and features a helpful reminder system that notifies you when a bill is due. It also includes an archive of past bills so that you can see your full payment history. There are free and paid versions available for this app.
  • Check: Check, like BillTracker, is a free app that helps you manage your bills. However, this app also features bill pay for $0.30/transaction. After linking your accounts, Check packs your information into a standardized, easy-to-read format with intuitive navigation paths. A few quick taps allow you view transactions and pay your bills. Begin by creating an account.
  • Ziplist: This is one of the easiest meal planning and grocery shopping apps that I have found. This app can help you search for and save recipes, plan meals, organize grocery store trips as well as look at grocery deals and coupons. You can also share your weekly shopping list with family and friends. This app syncs with the ziplist website.
  • Gas Buddy: This is a simple app that helps you to find the cheapest gas. You can find gas near you using GPS or search by city or zip. You can look at the options in a list or on a map.

Join the Conversation: What is your favorite personal finance app?

Ways to Eliminate Your Credit Card Debt

Do you have credit card debt piling up? Maybe you brought it with you to graduate school. Maybe you have accrued it during graduate school. Regardless, you have some debt that is eating away at you. Here are a few simple steps to help you eliminate your debt while you are in school:

  • Take Stock of Your Debt: Figure out where you stand, honestly. Don’t estimate it. You can’t fix the problem if you don’t know the reality. Write down the total debt and the interest rate on every card that you have.
  • Analyze Your Spending: Take an honest look at your income, expenses, and spending. Track your spending from the last few months. Are there ways that you could cut down your spending, even just $25 a month, to help pay down your debt? Every little bit adds up.
  • Create a Budget: Create a new budget for yourself that is focused on debt elimination. Wondering how to create a budget? Check out this post.
  • Generate Some Extra Cash: Look for ways to earn some extra cash. Sell a few of your items online. As a student, you probably have some old books that are lying around that you don’t plan to read again that you could sell. Do some odd jobs: yard work, babysitting, tutoring, etc. Give up something for a few months: eating out, junk food, Starbucks coffee, new clothes, etc. Put all of the money that you save towards your debt.
  • Choose Your Payoff Strategy: There are two common payoff strategies. One is to put all of your extra cash toward the highest interest credit card while paying the minimum on the other cards. Once the first one is paid off, you will have even more extra cash to apply to the card with the second highest rate and so on. For more information about this method check out this article. Another way is to start with the lowest balance first, paying the minimum on the others. Though this is not the most cost effective it is certainly a great way to motivate yourself as you are starting out. For more information about this method check out Dave Ramsey’s Debt Snowball.
  • Ditch The Plastic: During this time, hid your credit cards and just go with cash. It may seem archaic, but it is very wise. You spend 20% less when you pay with cash than when you use credit cards. This will also help you to keep on budget by only taking out as much cash as you need.
  • Motivate Yourself: Make concrete, trackable goals so that you can watch your progress. Celebrate your little achievements along the way. If you gave up coffee, you might treat yourself to a Starbucks or if you gave up eating out you might treat yourself to a meal at your favorite restaurant. It is up to you! Just make sure that these celebrations don’t involve you spending outside of your budget or, even worse, using your credit cards.
  • Get Help: Debt elimination can be very challenging, particularly if you have a lot of debt and/or you are dealing with many different credit card companies. There are many great debt elimination programs that can guide you through this process. I highly recommend Lutheran Social Service of Minnesota’s Financial Counseling Service. They have debt management plans to help people, not just Lutherans, pay off credit card debt and avoid scams for a nominal monthly fee. Another great resource is Dave Ramsey‘s debt management classes.

Join the Conversation: What are your tips for paying off credit card debt?

Summer Budget Challenge Part 2: Confessions of a Foodie

A few weeks ago I challenged you to discover your financial habits by tracking your income and expenses over the last month. If you missed it, check out the first segment of the Summer Budget Challenge. This week, I am continuing the Summer Budget Challenge with an article on evaluating your spending patterns and aligning your spending with your values.

Over the last month, I have been tracking my own spending on mint.com. I carefully categorized my income and expenses, evaluating the trends. To be completely honest, I didn’t expect to find much. Being a naturally frugal person and writing a frugal blog has kept me away from lots of bad spending habits. Yet, I was surprised when I found the majority of my budget (outside of housing expenses) was going towards food!

Anyone who knows me knows that I love to eat. I am self-proclaimed foodie. Restaurants are great, but I would much rather make a really fun, elaborate meal and have friends over. I love to cook using fresh ingredients. I don’t cut corners. If I indulge myself, it is generally in this area. Needless to say, my grocery bills frequently exceed my idealistic grocery budget.

Anyone who tracks their expenses and income, particularly if they are tracking it for the first time, is likely to find a few surprises. While awareness is a big step, what you do with this information is even more important. Begin by asking yourself: Does your spending align with your values?

In my case, while I enjoy eating good, healthy food and having company over, it is not the most important thing to me. My first priorities are giving and repaying my debt. If my love of food impinges upon my giving or my ability to make my debt payments, then something is wrong. While my habit has not quite gotten to that point, it is definitely in critical danger of doing so. When I create my new budget I will red flag this area making sure that I set solid boundaries that allow me to indulge my love of food without overspending.

How does your spending reflect your values? Over the next two weeks, evaluate your spending habits, align your spending with your values and begin to identify problem areas that should be addressed in your budget. Stay tuned for the next part of the Summer Budget Challenge: Creating A Budget.

Join the Conversation: What are the problem areas in your spending and how are you addressing them?

Summer Budget Challenge: Step One Discover Your Habits

Summer is a great time to begin planning your budget for the next school year. This summer join me in the Summer Budget Challenge. Together we will discover our spending habits, align our spending with our values, and create a budget that we can maintain, all before the school year begins this fall. Follow frugal-community on Twitter and Facebook to hear more about what I have discovered and join the conversation.

We begin by discovering our spending habits. Over the next month, you have one task: track your income and your expenses. You may think your know where your money is going, be prepared to be surprised. Over the next few weeks track every dollar that comes in and every dollar that goes out. This includes everything from bills to paychecks to babysitting money to the dollar you used to get a diet coke from the vending machine. Every penny counts. There are a variety of ways that you can do this:

  • Journal Method: Carry around a small notebook or journal and track every purchase you make whether with cash, credit or check. On another page track your income.
  • Excel Method: Instead of using a journal, track all of your income and expenses in an excel spreadsheet. This works best if you set aside some time each week to put in each transaction, if you do it with any less frequency you might forget some of the smaller purchases. Microsoft provides a variety of personal budgeting templates.
  • Software Method: If Excel isn’t your thing, but you still want to track your spending on the computer there are a variety of different programs out there, one of the most popular is Quicken. This software will also be helpful later when we create a budget.
  • Online Method: There are a variety of sites that can help you track your income and expenses as well as create a budget. I use Mint.com because it syncs with my bank account, categorizes my transactions and tracks my budgets all in one place. Again, it is important that you set aside time each week to track your expenses on the site to make sure everything is categorized correctly and all of your cash purchases are included as well.

Happy Tracking!

Aligning Your Spending with Your Values

As graduate students it can be particularly hard to align our spending with our values because sometimes there just isn’t enough money to go around. However, it is still important for us to be conscious of our spending habits and how these align with our values. This is particularly important as you are creating or revising your budget.

Here is a simple process for aligning your spending with your values:

  • Make two columns.
  • Begin by listing the top ten things that you value in the first column. Don’t think too much about it, just write out the first things that come to mind. Your list can include specific items (house, new computer, saving for Italy, etc.) and/or more abstract values (adventure, philanthropy, art, friendship/love, etc.). Having trouble listing your values? Check out this resource.
  • In the second column, list the areas in which you spend (housing, dining out, clothes, travel, etc.) in order from highest to lowest spending. You can also do this with individual purchases, by putting different purchases on the same line as the value that they correspond with and see if the amounts match up.
  • Compare the two lists. Paula Pant suggests that you ask yourself: What opportunities am I missing as a result of the way that I am spending my money? What does my current spending say about me?
  • Depending on the disparity between your spending and your values, you might choose to restructure your budget around your values. While it can be difficult to organize all of your spending around your values as a graduate student, you might try this with your discretionary spending. For more information on budgets check out these articles on creating and maintaining a budget.
  • This list of values can also come in handy when you are making a purchase. Every time you consider purchasing something, ask yourself if it lines up with your values.

While it may be difficult sometimes, establishing good spending habits now can have a big affect on your future spending habits. So, why not begin aligning your spending with your values now when you have just a bit of extra cash and begin forming the habits that will guide your spending later when you have more discretionary cash?

Join the Conversation: What are your ten values?