Tag Archives: Stress

Use These 5 Simple Hacks to Ease Financial Stress

 

April is Stress Awareness Month and we all know that finances are the root of much of the stress we face. If you haven’t ever lost a little sleep worrying about a money-related issue, I would question whether or not you had a pulse. It’s almost inevitable that, at some point, we all will have a financial difficulty that wears on our mind, and ultimately, maybe even our body.

Financial Finesse is a financial wellness firm that offers coaching to over 2.4 million people in the U.S. In the firm’s 2016 Financial Stress Research, they reported that 1 out of every 4 people say that they suffer from high or overwhelming financial stress and 6 out of 10 people reported losing sleep over at least one financial problem. The good news is that there are some fairly simple steps we can take to ease financial stress. Here are some that have worked for me.

Resist the consumerist culture we live in.

My wife and I just recently realized we had too much stuff. Not only did we have too much, we wanted even more. The culture we live in is constantly in our face about purchasing items that are supposed make us happy; new clothes, beauty products, cars, toys for your kids, electronics, apps for your phone. The never-ending assault on our desire for more is relentless. Our home was bursting at the studs with things we didn’t need and all of that stuff was causing stress. So we decided to get rid of it. Anything in our home that is not useful or doesn’t bring us joy is sold, thrown away or donated. And, we have begun to use the same criteria for our purchases. We are spending less money on things that have no lasting value and using those resources to focus on experiences and priorities that truly make us happier. We are still in the beginning stages of this journey, but it’s amazing how much less stress we have.

Create an emergency fund.

According to a recent survey by Bankrate, 57% of Americans don’t have enough cash on hand to cover an unexpected $500 expense. Now that is stressful! Sticking money into an account and resisting the urge to touch it can be tough, but here is a quick hack I have used for years to help with this. Create automatic transfers from your checking account into a savings account. Most of us now have our paychecks directly deposited into our checking accounts and most banks allow you to set up automatic recurring transfers. So, set up money to transfer every payday to a savings account and you will likely not even notice it’s gone. It doesn’t have to be a large amount; it will feel great just to get started!

Make a plan.

Simply having a plan in place to manage your finances can be a huge weight off of your shoulders. Knowing your monthly income and essential expenses is the first step in figuring out a budget and sticking with it. When my wife and I decided she would leave her career and stay home with our girls a couple of years ago, we both lost sleep over the financial impact this would have on our family. So, we sat down together and calculated our monthly income and bills. From there we identified some expenses we could easily reduce (like our satellite bill) and figured out how much we would have left for discretionary expenses (it wasn’t much). Having this plan in place made us both feel better and gave us some peace of mind knowing we could make this work as long as we stuck to the plan.

Talk about money.

Perhaps the most important thing you can do to ease financial stress is to talk to your spouse or significant other about money. These are not always easy or fun conversations and they may even end with one person being upset. But don’t give up. It is vitally important for you and the person you are sharing your life with to be on the same page about finances. A seemingly simple rule my wife and I have always used is that we will ask the other person before we make a purchase that is over a certain threshold. When we were first married and had very little in the way of financial resources, the limit was $50. For example, if I wanted to buy new decoys for turkey hunting and they were going to be more than $50, I had to run it by my wife first. While our threshold has grown since we were newlyweds 12 years ago, we still have this rule in place. It may seem silly, but it is a subtle way to ensure we are both on the same page about how the family’s money should be spent.

Visualize your future.

Your future self wants to be financially independent. Taking steps now toward that end will ease stress today and have a lasting impact later in life. What does your future look like? What do you want do? What will you be doing when you are 65, 75, 85? A great first step in planning for your financial future is to visualize the life you desire. This will help you to know if you are on track today to achieve the life you are picturing. My wife and I frequently talk about our dreams for our life after work and what we want to do. Sometimes these conversations are just two people dreaming together and sometimes there is a little more planning involved, but either way, it is helpful. Be kind to your future self, take action today to reduce stress now in order to avoid tension in the future. Read my blog about this here.

 

Stress can kill. And financial problems are one of the leading causes of anxiety. There are many money problems that may be fixed using simple hacks like the ones above, but for serious issues, you may need to talk to a professional to get help. The key is to take control of your money and allow yourself some better nights of sleep!

 

Jeff Kempker
Manager of Member Services

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Should Employers Provide Financial Education for Employees?

Student Overwhelmed Asking For Help

 

Financial stress is an issue that touches all age groups and income levels.  Student loan debt, retirement, health care, credit cards, and mortgages are all common concerns for American workers.  A recent survey conducted by State Street Global Advisors found:

  • 60% of respondents said they are stressed and distracted by their financial situations.
  • Half live paycheck-to-paycheck.
  • Almost one-in-four say their productivity has suffered because of financial issues.
  • One quarter said they have missed work because of money-related stressors.

These results don’t seem particularly remarkable.  I mean, we all have issues, right?  Some would say that the employee needs to put all that aside while at work and keep productivity high no matter what.  But let’s face it, this problem isn’t going to fix itself.  The need for financial education is at an all-time high as financial literacy is low among Americans.

So who should provide this education?  More experts are recommending that employers provide financial instruction for their employees.  Why?  Because the benefits are great not only for the workers, but for the employers as well.

Think about it, employers are losing thousands of dollars each year due to low productivity. Some of these losses are due to the financial stress of their workers.   Missed working days, limited focus, and employees retiring on the job are all issues that can cost employers money.     So it now becomes much more than an individual problem, it is an organizational problem.  This is prompting more employers to consider financial wellness education for their employees.

Employers have provided employee benefits education since the first American pension plan was established by American Express Railroad in 1875.  This normally consists of describing the enrollment process, options, and required forms.  However, many think it is time for a more complete approach that includes basic money management skills, budgeting, and investment advice for employees at all stages of their careers.  In an article by Jill Cornfield featured on PLANSPONSOR.com, Fredrik Axsater, of State Street, said “A more holistic approach is needed, providing tools and opportunities for employees to reduce stress and improve their financial well-being.”  Employers are taking notice.   In fact, the Society for Human Resource Management (SHRM) reports that 57% of organizations are now making financial education available for their workers.

The University of Minnesota advocates “Workplace Comprehensive Financial Education” and says that the benefits to employers for offering financial education include:

  • Improved productivity – Enables employees to focus on their jobs rather than financial issues
  • Reduced employee stress – Leads to healthier, happier employees
  • Improved workforce planning – When employees can retire when they are supposed to, employers can better plan for future workforce movement.
  • Attract quality workers and then keep them – Employees generally view their employers as trustworthy sources of information. Providing these services for employees can be a very attractive benefit.

So what do you think?  Does an employer have any responsibility whatsoever to ensure its employees are fiscally fit?  Or is this the responsibility of the individual?

 

Jeff Kempker, RPA, CRC

Jeff Kempker
Manager of Member Services

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