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Finances and Stress, Stay Calm and Save!

Posted by | Olga Johnson, SW Washington Program Manager, Save First Financial Wellness

Money issues is one of the most common causes of stress in our society. There have been many surveys done over the years that demonstrate over 75% of Americans report feeling anxious about their financial situation. Financial anxiety can affect our self-esteem, relationships, performance at work and may even cause stress related illnesses.

As we all understand, feeling anxious about our financial situation will not solve our money issues. However, by figuring out the root of the problem and addressing the issue will begin the path to understanding and healing.

For many of our clients, the biggest stressor during the COVID outbreak has been no money or lack of money in emergency savings.

An emergency fund is money that is set aside to cover life’s unpredictable and unexpected events such as sickness, job loss, or an unforeseen car repair. Setting up an emergency fund is a practical way to reduce stress and ease the financial anxiety that comes from these life circumstances.

You may have read that the goal for someone setting up an emergency fund should be to have three to six months of expenses saved, however, this can be overwhelming for many as it could take years to save so much. What we recommend is a “starter” emergency fund of $500 as the first goal, and from there we can begin to save and build the fund little by little.

To set money aside for this purpose, we will likely need to make adjustments to maximize income and/or reduce spending (read our Money Savings Ideas blog). Adding even a small amount from each paycheck can help to create this essential cushion over time and gain more control of our finances. Think about meeting with a financial coach or counselor to go over your financial goals, a spending plan, and to discuss ways to jumpstart your savings. Here’s a link to our website where you can learn more.

No matter where you are currently, start small and start today!

Here are some tips to begin or boost emergency savings:

  • Make the savings goal concrete and realistic: break it down into monthly contributions
  • Automate and make it fun: Set up automatic transfers from your checking account to your savings account, even small amount per month can turn into a big money over time. Try one of the many round-up savings apps that make savings fun. Using these apps, purchases are rounded up with the extra going to savings.
  • Look for extra money: whenever extra money comes your way, put it into your emergency savings account: overtime pay, bonuses, tax refunds, monetary gifts from family, and any other refunds or reimbursements received
  • Sell things you don’t use: just one of the ways to jumpstart savings!
  • Rent out a spare room in your house: rent out your car, RV, tools, musical instruments, sports equipment or other belongings. There are several apps and websites that allow you to rent out various items.
  • Take surveys for money, participate in focus groups, become a user experience tester: a part-time job where you can have fun while making money
  • Get creative with your income: temp jobs, baby/pet sitting, tutoring online, turning a hobby into a business, driving Uber/Lyft, become a food delivery driver, some companies will even pay you for advertising space on your car
For more info on Save First Financial Wellness program visit: https://savefirstfinancial.org/