Financial Stress Management

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Stress, Managing Stress, Stress Management, Financial Stress, Managing Financial Stress, Coping Financial Stress, Stress relaxation, relaxation

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Financial Stress Management

  1. 1. Managing Financial Stress: Surviving the Weak Dollar Nancy D. Losinno
  2. 2. Where’s that $100 bill I just put in my wallet? <ul><li>Learn to recognize financial stress </li></ul><ul><li>Worrying/arguing with spouse over $$$ </li></ul><ul><li>Having to use plastic for everyday $$$ </li></ul><ul><li>Only making minimum payments </li></ul><ul><li>Making payments late (and incurring those hefty “default rates”) </li></ul><ul><li>Feeling overwhelmed by debts </li></ul><ul><li>Having trouble sleeping or being moody </li></ul>
  3. 3. Money Matters…Part of Life <ul><li>Every family has expenses and decides their money priorities </li></ul><ul><li>Some things you have no control over: costs of gasoline, food, electric rates, income and property/school taxes, stock market </li></ul><ul><li>Financial stress can build up insidiously over time as larger economic forces change the overall climate </li></ul>
  4. 4. Poor coping responses to Financial Stress <ul><li>Being afraid to open the mailbox </li></ul><ul><li>Not paying your bills/holding onto what is believed to be your money </li></ul><ul><li>Stacking your bills in one pile and dis-regarding their due dates </li></ul><ul><li>Other avoidance tactics: drinking to escape, screaming at family members, even possibly domestic violence </li></ul><ul><li>Financial stress can cause some people to think of suicide </li></ul>
  5. 5. Get control of what you can!! <ul><li>Analyze your use of credit cards </li></ul><ul><li>Analyze your level of responsibility about paying bills on time to avoid late fees, default rates, overlimit charges, etc. </li></ul><ul><li>Figure out a Phase One plan, Phase Two, etc. about how you will learn to live on what you earn (short-term goals and long-term goals) </li></ul>
  6. 6. Triaging your debts <ul><li>Is there any situation that requires immediate (esp. legal) attention? </li></ul><ul><li>Is there any impending situation that if unaddressed, will create a huge crisis? </li></ul><ul><li>Wage garnishees, foreclosures, evictions, IRS or NYS income tax issues cannot be ignored </li></ul><ul><li>Get expert legal advice and know your rights under the NYS consumer protection laws (do a google search for bank, credit cards, etc.) </li></ul>
  7. 7. Demystifying your Debts “What caused this mess?” <ul><li>Effects of a divorce (legal fees, cutting assets in half, child support, starting a new household); </li></ul><ul><li>Kids in college; </li></ul><ul><li>Using cards to live—not living within your means; </li></ul><ul><li>A medical crisis </li></ul><ul><li>An adult child with “problems” </li></ul><ul><li>Lost income (a tenant moved out, etc.) </li></ul><ul><li>The terror of the default rate </li></ul><ul><li>A gas-guzzling vehicle </li></ul><ul><li>Not looking!!! </li></ul>
  8. 8. Clear the Clutter <ul><li>Your ability to think clearly about your situation will improve if you de-clutter your environment </li></ul><ul><li>Clutter can cause depression & inertia </li></ul><ul><li>Clutter prevents you from finding what you need quickly </li></ul><ul><li>Clutter will make you lose important papers (bills) that you must attend to </li></ul>
  9. 9. Get organized today! <ul><li>Create a bill-paying workspace with a bill-drop zone; </li></ul><ul><li>Have phone & office supplies nearby; </li></ul><ul><li>Develop habit of reading bills as they come in and flagging items that need response (call company, question amt.) </li></ul><ul><li>Be aware of all due dates—postmen are not perfect; </li></ul><ul><li>Get address book to keep track of all those online bill-pay user id’s and passwords </li></ul>
  10. 10. Become a Smarter Consumer <ul><li>What is your mortgage rate? Is it fixed or variable? If variable, get it fixed. </li></ul><ul><li>Are you over-paying for necessities? (e.q., using local drugstore for prescriptions vs. mail order) </li></ul><ul><li>Use in-network doctors </li></ul><ul><li>Make cash a habit; think twice </li></ul>
  11. 11. Things you can “tweak” <ul><li>Look for more competitive rates on: </li></ul><ul><li>Cable plans </li></ul><ul><li>Cell phone plans (can be bundled) </li></ul><ul><li>Mortgage </li></ul><ul><li>Homeowners insurance </li></ul><ul><li>Car insurance </li></ul>
  12. 12. Some philosophical questions <ul><li>To refinance, or not? </li></ul><ul><li>To borrow against your house, or not? </li></ul><ul><li>To declare bankruptcy, or not? What about “debt consolidation?” </li></ul><ul><li>Which medical plan is best for this time in yours and your family’s life? </li></ul><ul><li>How much should you improve your home and how much is too much? </li></ul>
  13. 13. The Rule of Three <ul><li>Make a promise to yourself to handle THREE problems a day </li></ul><ul><li>Set aside a certain time of the day to call a creditor re: incorrect bill, question a late fee, return an unwanted item, etc. </li></ul><ul><li>When you do this on a regular basis, you are chiseling away on your debt </li></ul>
  14. 14. Money & Marriage <ul><li>Marriage can be a formidable economic unit if both partners share same goals; if not marriage can create financial chaos </li></ul><ul><li>Both partners need to work collaboratively to solve the money issues; one cannot reserve right to “act out” with money according to indiv needs </li></ul><ul><li>One person’s acting out with money can create workaholism in other </li></ul><ul><li>Don’t go shopping when angry or depressed </li></ul>
  15. 15. Detoxing from Overspending <ul><li>Is sure to bring discomfort </li></ul><ul><li>Is an opportunity for growth & creativity </li></ul><ul><li>Create a “spending plan” not a budget </li></ul><ul><li>Spending plan: rational, thought-out, no connotations of “scrimping” </li></ul><ul><li>Avoid the stores..find something else to do, enjoy paying your bills </li></ul><ul><li>Take a second look at kid’s afterschool activities (dance, sports, etc.) that require extra time and money </li></ul><ul><li>Trim spending for eating out, fast foods esp due to poor planning, or not grocery-shopping regularly. If going out, avoid appetizers, alcohol, pricey desserts, etc. </li></ul><ul><li>Put your credit cards in a “Forbidden Zone.” </li></ul>
  16. 16. Ten Money Rules for Becoming Proactive <ul><li>Your job is your most valuable asset. Protect it, perform your job well. Your job gets you better rates, pays your health insurance, etc. </li></ul><ul><li>Question the “not enough” feeling of inadequacy you might have. Often comes from childhood deprivation, other trauma, etc. </li></ul><ul><li>Set goals, have a dream such as the house being paid off by retirement, etc. </li></ul><ul><li>Pay down higher interest rate cards first but you must first know the rate your’re paying </li></ul><ul><li>No one minds your money as well as you will. Don’t look to be taken care of by someone else. </li></ul><ul><li>Keep good records and someday you will be glad you did. </li></ul>
  17. 17. More Money Rules <ul><li>Subscribe to a monthly money-related magazine. It will jog your brain for new ideas, keep you updated about trends, and remind you to do some regular housekeeping on your finances. </li></ul><ul><li>Teach your kids about money literacy, the little kids as well as the older ones. </li></ul><ul><li>Learning money skills is a positive life skill. Don’t give your kids a fish, teach them how to fish. </li></ul><ul><li>Nature abhors a vacuum. When you look at your whole life, try to look at the areas of prosperity or the ways you can downsize in order to help others. Try to live smaller. </li></ul>
  18. 18. Causes of Relapse for your “Spending Plan” <ul><li>Using money as a mood-changer </li></ul><ul><li>“ We’ll deal with it later” impulsivity </li></ul><ul><li>“ Till debt do us part” </li></ul><ul><li>Hidden addictions </li></ul><ul><li>Not planning for major expenses </li></ul><ul><li>Playing rescuer to other people’s crises </li></ul><ul><li>Untamed grandiosity </li></ul><ul><li>A divorce occurring late in life </li></ul><ul><li>Letting cash “burn a hole in your pocket” </li></ul><ul><li>Sudden wealth syndrome </li></ul>
  19. 19. Speaking of Sudden Wealth <ul><li>Would you know how to handle it wisely should it happen to you? </li></ul><ul><li>Sudden wealth produces many emotions: guilt, anxiety, fears, etc. </li></ul><ul><li>Many have spoken about “the Lotto curse” </li></ul><ul><li>Get a good lawyer, a good accountant and a good therapist!!! </li></ul>
  20. 20. Making Positive Changes <ul><li>Where would you like to be one year from now? Five years from now? </li></ul><ul><li>Self-esteem must be an inside job, and should not be defined by externals </li></ul><ul><li>You are not your debt, but you are responsible for managing your financial affairs wisely </li></ul><ul><li>Eliminate “entitlement” thinking; avoid resentment about what you don’t have & focus instead on what you do have </li></ul><ul><li>Get some mental energy going and see this as a challenge and opportunity for growth </li></ul>

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