Today’s post is by Amelia Baladez, the client coordinator for our Launch program at Momentous Institute.
Many of us are feeling the financial pinch related to inflation, rising gas prices and more. When we face situations like these, many people feel as though they have no control… we don’t set the prices and we can’t really do anything about them. This is true, but it’s also true that there are things we can do to manage our stress and anxiety, as well as our finances, to make it through the tough times.
First and foremost, it is important to acknowledge any feeling you may be having about your financial situation: worry, anxiety, stress. We have to know the feeling is there before we can address it. And like with all emotions, if we don’t acknowledge it and instead ignore it or even try to deny it, it will come back even stronger. Acknowledging the feeling is as simple as being honest with yourself to say, “I am feeling worried about finances.” Once you’ve named it, you can do something about it.
While it is true that we don’t have any control over the price at the gas pump, there are things we can do to be more financially sound. Here are just a few tips.
When we face financial stress, we often are put in situations where we have to do things that make many people feel uncomfortable. Calling the credit card company and asking for a lower rate, calling or emailing to cancel subscriptions, asking for a late fee to be waived, borrowing items or buying used items rather than buying everything new. Any of these situations might make someone feel vulnerable, uneasy, or anxious. But it is important when we are taking care of our financial situation to put our pride aside and practice humility.
Write your expenses down on paper.
If you have a budget, look at it again. If you don’t have one yet, it’s a good time to start. We are in the age of technology, and there are a million tools out there to help with budgeting. But there’s something about pen to paper that really connects to the brain a bit more than looking at numbers on a screen. Take a piece of paper and write down what comes in and what goes out each month and notice what you see.
Identify needs vs. wants.
Some people may be entering a new financial stage who haven’t always had to pinch pennies. For those who have enjoyed relative financial comfort, it isn’t always obvious where to cut expenses. A good filter to use is to decide a ‘want’ vs. a ‘need’. Really think through all your purchases and categorize them accordingly. If something falls in the ‘want’ category, try setting a 24-hour or 48-hour time limit before you can buy it, to make sure it’s something you really want rather than an impulse purchase.
There are plenty of tricks you can find about how to spend money carefully, but some important ones include:
Meal planning – know exactly what you are going to buy and only buy those items
No add-ons – we’ve all gone to the store for one item and come out with 20… make a list and only buy what you need, no wandering the aisles and adding things to the cart
Avoid tiny purchases – the dollar store with its many one-dollar items can be enticing, but every dollar adds up, and when you run to the dollar store to buy an item, you often leave with several
Look at your monthly charges – we often have so many subscriptions, we don’t even realize it… streaming services, magazines, gym membership, online publications and more. Look at these closely and decide which you use on a regular basis and which you could do without
Make it a game – challenge yourself to see if you can beat your own spending from previous months, sometimes a little challenge makes it more exciting to cut back
Think about extra income.
Just as we have control over what goes out, we can also have some control over what comes in. You may be able to do some babysitting or pet sitting, turn a hobby into a small profit, or do odd jobs in your neighborhood. There are even small ways to add money to your bank account, like cash back apps where you upload your receipts after each purchase. If each dollar that goes out adds up, so does each dollar that comes in!
Parents, talk to your kids.
For those who have children in the home, it’s a good idea to include them in the process. You can help children identify their own ‘wants’ vs. ‘needs’. If they have a ‘want’ that is outside the family budget, see if they can find a way to pay for it. Maybe they could bake cookies and sell them, offer to do odd jobs for the neighbors, or make a craft and sell it. You’d be surprised at what people will buy from kids! This offers them an important lesson that it takes work to earn money to buy the things we want.
It's important not to create anxiety in children who aren’t naturally concerned or even aware of money. Rather than making it a big deal and talking about how you can’t afford things, you can help them develop an understanding that money doesn’t just magically appear and that you can’t just take out your credit card and buy anything their heart desires. They’ll be better off in the long run with adults who help them understand that sometimes they can buy things, and sometimes they have to save up or say no.
Don’t lose hope.
In moments of anxiety, we can sometimes turn away from others. But being alone in your anxiety often ends up making you more anxious. The best thing we can do for our mental health is to bring that anxiety into the light. Stay connected with others – people who you can talk to and people who will ground you and bring you perspective. It’s so important to have loved ones who remind you that, while money matters, it’s not all that matters.