Archive for the ‘Financial Stress’ Category

Today’s economic conditions call for some financial stress relief.  The current state of the economy is due to excesses of lifestyle and government spending out of control.  We need to get back to fiscal conservatism both personally and governmentally.  By not living on the edge financially, we could avoid much of today’s fiscal woes and stresses.  Personal and government responsibility must be acknowledged if we are to overcome the irresponsible mess we have created.

Personally we should all be debt free except for a mortgage.  We should have a significant reserve fund to weather unexpected expenses and job layoffs – nothing is guaranteed.  Taking the equity out of one’s house is a bad financial move.  Expecting an unending rise in the housing market is just plain ignorant.  Credit card debt and excesses not paid for in cash are all ingredients to a financial meltdown.  We must take responsibility and make positive inroads to owning up to and paying off our debts.

What we can do:

* Stop buying on credit – pay cash or you can’t afford it
* Stop pulling equity out of our homes for toys and excesses
* Live within a budget, apply the rest to debt and reserve
* You don’t need a new car payment – hang on to car longer
* Don’t try to keep up with the Jones
* Stop buying expensive non-necessities
* $100+ cable – pare down services
* $100+ cell phone service necessary?
* $5 coffee drinks necessary?
* Eat out less, pack a lunch for work
* Beat the recession blues with freelancing jobs

Interest payments will consume your wealth with not much to show for it.  Buckle down and live frugally until you have taken control of your finances, that is the best financial stress relief you can have.  Write down every dollar you spend for a month and you will be amazed how much you are pissing away.  Take the savings from the above list and apply it to your debts.  You will be amazed how fast you can make inroads on paying off your debts.

Tuesday, November 18th, 2008

Financial problems are often a family problem and parents need to manage stress so they do not transfer their anxiety onto their children, according to experts at Kansas State University.

John Grable and Kristy Archuleta of K-State’s Personal Financial Planning Institute say it is important for parents to not pass along their stress about financial matters in these tight economic times to their children.

“Creating anxiety in children creates more problems, said Archuleta, an assistant professor of family studies and human services, licensed marriage and family therapist and a faculty member with the Personal Financial Planning Institute. “Children pick up a parent’s stress quickly because they can feel tension and can read non-verbal communication.”

From belt-tightening to losing a house, life-changing transitions are hard on children, Archuleta said. Be open with children, but don’t give them too much information about issues that are adult issues and not children’s issues, she said.

She suggests that if you have to take something away from a child, like piano lessons or pizza every Friday, she suggests substituting something like family night in the kitchen and attending free concerts.

Archuleta and John Grable, a K-State professor of family studies and human services and head of the Personal Financial Planning Institute, suggest several methods to lower financial stress:

• First, have an emergency fund of at least three months worth of living expenses in a safe account. What matters is a savings plan that is dedicated to building that emergency reserve, Grable recommended.
• Second, discuss financial goals regularly. They change, Archuleta said, as the family changes with births, retirements, college graduations, job changes and other events.
• Third, talk about individual financial risk tolerance. “The real issue comes down to preference, perception and tolerance,” Grable said. “Most people prefer to avoid financial risk. Why take risk if I don’t have to?

“Second, how we perceive risk is different from others. I might have a preference to avoid risk, but not perceive the stock market as risky,” he said. “In the end, though, risk tolerance does really matter. Risk tolerance refers to a person’s willingness to take risk. For example, I might prefer not to take risk; I might also perceive the stock market as risk, but in the end, I might be willing to take the risk anyway. Why? To maximize my long-term returns.”

Grable said it is essential for a married couple to know the risk tolerance of each partner. If the husband makes the investment decisions and his risk tolerance is significantly higher than the wife’s tolerance, this could lead to stress within the relationship.

“Knowing risk tolerance differences at the outset can eliminate many financial arguments and stressors,” he said.

Archuleta offers a final piece of advice for parents: Be good examples.

“Children learn financial and stress management from their parents,” she said. “Especially in economically turbulent times, they can learn to talk about how to save and spend money effectively, and to seek help when needed.”

Sources: John Grable, 785-532-1486, jgrable@k-state.edu;
and Kristy Archuleta, 785-532-1474, kristy@k-state.edu
Web site: http://ipfp.k-state.edu
News release prepared by: Jane P. Marshall, 785-532-1519, jpm2@k-state.edu