Personal Finance Gurus Share The Top Tips They Want Everyone To Know (From Huffpost.com) [2 Articles]
~ Sunday, August 13, 2023 Blog Post ~
By Jillian Wilson, April 18, 2023
From tracking your spending to opening a certain kind of savings account, here’s how to get your money in order.
When it comes to money, debt, budgeting and investing, it can be hard to know where to start. The path to financial success is different for everyone, and it can even mean different things to different people.
For you, financial success might mean having a lot of money in your savings that you can leave to your children and grandchildren. For someone else, financial success may mean being able to book flights as often as they want. And there is no right or wrong answer.
But it is important to understand your money and know what goals are important for you, so that you can set yourself up for financial success as you move through this expensive life.
Below, financial professionals share their top tips.
Get your finances organized.
“So, I think the first thing, and the biggest one I would say, is to get organized,” said Kimberly Palmer, a personal finance expert at NerdWallet. “I think that just making sure you’re organized with your finances is really the first step toward taking control of your spending and your saving.”
Finances can have many moving parts: Some bills come through the mail, others come via email, and other payments are just directly taken out of your bank account.
Palmer said you want to make sure you’re keeping track of all of the different moving financial pieces and that you have a system that works for you.
“For some people that means uploading everything into a spreadsheet or using an app that helps you track your spending, but however you choose to do it, whatever method you use, I think the biggest, most important thing is to get organized with your finances,” she added.
Align your financial goals with your values.
Gaby Rincón, a personal finance coach and the founder of Realistic Personal Finance in Los Angeles, said it’s important to make sure your finances line up with your goals and values.
So, if you want to retire early, you should make sure your financial decisions reflect that goal. Or, if you want to travel more, you should keep that in mind when deciding what to spend money on.
“My point in this is that getting your money in order, it doesn’t have to be a negative, or it doesn’t have to be deficit-based,” Rincón said. In other words, just because you create a budget doesn’t mean you can’t budget for the things you love, like fancy massages or trips to visit family.
Instead, as you meet your financial targets, you can know you’re working toward what you want and making decisions you can actually afford.
Don’t try to “keep up with the Joneses.”
“What I encounter the most is this… unspoken desire to keep up with the Joneses,” said Garrett Prom, the founder of Prominent Financial Planning in Texas. “I have way too many people coming to me that are spending way too much money on things that aren’t bringing them joy in their lives.”
This could mean purchasing a house you can’t afford just because your friends are buying big homes, or getting a car that’s technically out of your budget just so you look “cool” as you drive down the street.
“My number one piece of advice is… don’t try to keep up with the Joneses. Live within your means. Make sure that you’re saving and investing for your future,” Prom said.
Instead, focus on purchasing items you can afford, not on products that are the latest “it” thing.
Create an emergency fund — and you can start small.
According to the experts, it’s a good idea to create an emergency fund.
“I think having an emergency fund is just so crucial to helping you get through any sort of difficult time, like an unexpected expense, but also something bigger like a job loss,” Palmer said.
Additionally, if you have an emergency fund, an unexpected expense won’t derail your larger financial goals, said Ashira Nelson, an accountant and finance activist in Ohio.
How much you put in your emergency fund depends on what you’re able to comfortably save. So, no, you do not need to follow the old-school advice of having three to six months saved. While that’s a great thing if you’re able, it’s also unattainable for many folks.
“It’s more than OK to start with a smaller goal — maybe it’s $500. It could be more, it could be less,” Palmer said.
Whatever amount you choose to save can help you get through challenges without having to rely on something like a high-interest credit card, she added, which ends up costing you money in the end.
Look into opening a high-yield savings account.
Palmer said you can consider storing your emergency fund in a high-yield savings account.
High-yield savings accounts typically have higher interest rates than traditional savings accounts, which allows your money to make more money via interest. It’s important to know that the yield rates on these accounts are constantly fluctuating due to market conditions, she noted.
“They can earn [around] 3% [annual percentage yield]. By comparison, the national savings average is 0.37% APY,” according to NerdWallet.
You can open a high-yield savings account through banks like Ally, Marcus by Goldman Sachs or Citizens Bank — a Google search will bring up more options, too.
Plus, it’s doubly beneficial to open one of these accounts in the current climate.
“Right now, of course, we’re in an environment where rates have been going higher, so it’s easier to earn some interest on your savings,” Palmer said.
Stay away from shame-based finance advice.
“It’s difficult to talk about money in general,” Rincón said. “We’re kind of taught, ‘Don’t talk about it. It’s awkward,’ right?”
This means we often don’t ask questions that are necessary for financial growth or end up in personal finance spaces that rely on shame to get a point across.
Think about it: You’ve probably heard someone say, “Why don’t you have more investments?” or “Why do you still have debt?” Phrases like these involve a lot of shame, Rincón said.
“Absolutely stay away from that because you’ll start to associate [money] with negative feelings and then tend to shut down or give up,” she added.
Any step toward your financial goals is progress; you don’t have to be doing everything at once.
Focus on paying off high-interest debt.
If you have debt — particularly credit card debt or other forms of high-interest debt — think about ways you can pay it off, Nelson said.
“I would list everything out, all of your debt, list out everything then put it in order from highest interest rate and go down your list and attack it,” Nelson added.
Starting with your highest-interest debt ― known as the avalanche method ― is important because that’s the debt that is costing you the most money each month, she noted.
Nelson said you can also allot any extra money to your debt each month, which is something she did to pay off $50,000 of debt in 3 years.
“I am so passionate about people paying off their debt,” Nelson said, “I don’t want that heavy burden weighing me down for the rest of my life. I believe in putting a plan in place and [destroying] your debt.”
Track your spending.
According to Palmer, tracking your spending is a great way to get insight into your cash flow and where your money is going.
“It can also really open our eyes to when we have recurring expenses that we either forgot about or just don’t even really need anymore,” she said.
You can commit to a month of spending tracking to see your money patterns and obligations, and you can do this in whatever way is best for you.
You can try a Google spreadsheet (which is what Palmer and her husband use), an Excel doc or try out a budgeting app that automatically tracks your spending.
YNAB, Honeydue and Mint are all popular budgeting apps.
You can even just write down your daily expenses in a journal or check with your financial institution to see if they have any tools available, she added.
“It’s just important to make sure you know where your money is going. And I think that fits into the bigger picture too, of just feeling organized about your finances,” Palmer said.
Consult books, podcasts and experts for additional advice.
“The best way to expand someone’s knowledge is to read, read, read,” Nelson said. “When I was trying to improve my financial knowledge, that is the one thing I did nonstop.”
Rincón agreed and said you can get books on personal finance from your local library (which, bonus, is free) or turn to social media where finance professionals post tips and share their must-read books or must-listen-to podcasts.
Specifically, Prom recommends “The Psychology of Money” by Morgan Houser, and Rincón recommends “Get Good with Money” by Tiffany “the Budgetnista” Aliche, “The Richest Man In Babylon” by George S. Clason and “Financial Feminist” by Tori Dunlap.
If you want more advice or tips customized to your situation, Nelson said you can go to an advisor or money coach for additional guidance; being armed with baseline financial knowledge is still beneficial as you embark on your finance journey.
Source:
https://www.huffpost.com/entry/budgeting-finance-tips-experts_l_6435c240e4b0fc8aefe00ebc
Article #2: How To Cope With Inflation Stress, According To Mental Health Experts (From Huffpost.com)
By Jillian Wilson, July 22, 2022
Inflation is at a 40-year high, and it’s hard not to worry or feel anxious about the cost of living, unexpected bills and more.
You are probably well aware that inflation is the highest it’s been in decades. It seems that everything is more expensive right now, from groceries to utility bills to new cars.
And not only is inflation daunting, but some experts have warned about a possible recession next year, which makes us feel even more worried about the uncertainty that lies ahead. (Oh, and not to mention that we are still living in a pandemic.)
It’s safe to say that things are stressful right now. And if you’re feeling a high amount of anxiety about inflation, you’re not alone.
The American Psychological Association found in a recent poll that 87% of respondents listed inflation as a “significant source of stress” in their lives, as Michele Tugade, a professor of psychological science at Vassar College, noted.
And how could it not? Money loss ― whether it’s layoffs, rental hikes, or expensive necessities ― is stressful. Money equals safety for many people, said Dior Vargas, a mental health advocate in New York. There’s a certain level of comfort that economic security brings, “if you have an emergency you will be able to survive and still [have] the standard of living you’re used to,” Vargas said.
When fears of job loss or increased rent loom, it’s easy to worry. Here’s what you can do if you’re feeling stressed about inflation or a possible recession.
Acknowledge you’re stressed, and get specific about what’s triggering it.
“Stress can be managed by taking pause, recognizing and acknowledging the emotions arising due to fears and anxiety related to inflation,” Tugade said.
It’s crucial to understand the root of your emotions by asking yourself questions like “how does this feel in my body?” and “what is this emotion telling me about the situation?” she said.
For example, identify where the anxiety is bubbling up in your body ― your stomach? Your chest?
Also, think about what made the anxiety come up ― was it a news report about tech layoffs? Was it browsing the aisles at the grocery store?
“Staying in an anxious mode can produce wear and tear on the body and have [harmful] effects on our physical and mental health,” Tugade said.
Doing this assessment is a form of mindfulness. Practicing mindfulness can help us cut back on overthinking and create clarity around the situation, Tugade said. If you’re able to truly understand the reasoning behind your stress or anxiety, mindfulness can even help you start problem-solving.
When you’re feeling overwhelmed, find an activity that doesn’t take a lot of thought to execute.
Whether it’s re-watching your favorite movie, going for a run or doing dishes, mindless activities are a helpful way to distract yourself from stressful matters like inflation, Vargas said.
Mindless activities mean something different for everyone, but you likely know what helps you feel more at peace. The next time you’re feeling anxious, take a step back and do something you don’t have to think about.
Create micro-moments of joy.
Just the phrase “micro-moments of joy” sounds pleasing, right? Luckily, it’s easy to add this anxiety-reducing practice into your life.
“In the midst of stress and anxiety, one useful strategy is to pay attention to the small things that bring big results… I call these ‘micro-moments of joy,’” Tugade said. These moments can include watching the sunset, zoning out to the flow of a nearby creek or just taking time to admire nature.
Even small bursts of positive emotions like gratitude, joy and serenity can help during stressful times. “Having gratitude can soothe feelings of stress in ways that have important benefits for healing and stress reduction,” she said.
Plus, it’s hard not to feel a little more relaxed when you’re admiring Mother Nature.
Create a calming environment.
Your living quarters can affect your mental health, Vargas noted. “Having a clean space does help me,” she said.
Vargas said she spends time cleaning her house (which, as a bonus, doubles as a mindless activity) during times of heightened stress. Once she’s done, she’s left with an environment that reflects a sense of calm.
Prioritize social connections.
“One of our greatest personal strengths is our desire to connect with others,” Tugade said. “Rather than retreating into isolation, which can produce growing feelings of loneliness and depression, find ways to connect with others.”
She noted that these connections can be in-person, but don’t have to be. You can connect with loved ones via Zoom, on the phone, through text or on social media.
“Reaching out to others means more than we realize,” Tugade said. It can build community and create a sense of purpose, which, in turn, helps balance out any stress triggers, financially-driven or otherwise.
Try journaling.
Vargas said that she turns to journaling during times of stress. “It’s a way for me to separate myself from my feelings,” she explained.
If you’re feeling anxious, take some time to journal. Write down whatever comes out, though it can be particularly helpful to write about the emotions you’re feeling in the moment.
It’s easy to bottle up our feelings, Vargas noted. Journaling is a way to combat that.
Be nice to yourself.
Don’t discount your emotions. These are stressful times and it’s important to show some self-compassion. There are benefits to doing so.
According to Tugade, “research shows that self-compassion is one important key to building resilience from stress.”
Beyond self-compassion, recognize that you are doing the best that you can. Just by acknowledging your personal vulnerability, you can initiate your body’s self-soothing and relaxation response, she said.
Supportive touch like putting your hand on your heart, giving yourself a hug or cradling your face are other ways to show yourself compassion, Tugade added.
“The sense of touch can release oxytocin,” she said, which activates a part of the nervous system that creates a sense of calm.
Focus on what you can control.
“When I feel anxious about the future, I re-center myself in the present and try focusing on what is within my control,” Aimee Martinez, a clinical psychologist based in Los Angeles, previously told HuffPost.
In terms of controlling your money, this can mean setting up an automatic transfer to a savings account, opening a high-yield savings account or canceling streaming services you don’t use.
Additionally, “creating a budget is really helpful,” Vargas said. It’s a nice way for you to take stock of what you’re spending money on.
And, remember, bad things don’t last forever.
Nothing good lasts forever, but nothing bad lasts forever either, Vargas said. If you find yourself in a panic about the future, try to be optimistic.
If that doesn’t work, connect with loved ones and find a community that you can lean on during hard times, she said.
Source:
https://www.huffpost.com/entry/inflation-stress-anxiety-mental-health_l_62d958ade4b0aad58d18015b
