Working as a financial counselor at the University of Utah, I come in contact with students who are juggling jobs, internships, classes, and supporting families. Life does a very good job of putting us in stressful situations.
These highly stressful workloads are common in today’s society (it seems everyone feels stressed sometimes). Jean Chatzky in her book, The Ten Commandments of Financial Happiness, tells us that those “who are happier with their finances are more likely to be happy with their jobs, relationships, health, friendships, appearance, self-esteem, children (if they have them) and lifestyle.” When people who are happy with their finances get stressed, she says that “they are more likely to work those feeling out by doing something positive, like exercising.”
Jean Chatzky goes on to state, “People who are dissatisfied with their finances are more likely to deal with stress by doing something that’s not good for them.” To help you find that happy middle ground with your finances, I have come up with some tips that will help reduce going into debt while truly enjoying life at the same time.
- Avoid rent-to-own establishments and payday lenders to purchase items or to take out a loan. These services make the item or loan look attractive by offering a very affordable payment plan over a period of time. What they don’t say is that you will end up paying much more than you want to. It is best to save and purchase the item with no loans attached or going to your credit union.
- Never have more than 38% owed to debts per month. To calculate this, take all your monthly debt payments such as mortgage, car payment, credit card payment, etc. and divide it by your total monthly gross income. The final number should not be over .38, or 38%. For example, if you have $1,500 in debts and have a monthly gross income of $4,000, you will divide $1,500 by $4,000 to get .375 or 37.5%. This is right at the border of an appropriate debt load.
- Spend time with your family and friends doing inexpensive activities. Everyone loves to own things that make them feel good, but spending time with family and friends is priceless. A study in the Journal of Adolescent Health finds the more a family interacts with each other (such as a family dinner), the less stress each family member has. Memories are better made having a picnic at the local park than watching the football game on a huge TV alone.
- Save a little bit each month for your item. If you want to purchase a nice $1,000 TV by the “Big Game”, save $100 beginning in April all the way to the following January. You will be able to save the money necessary and also give you some time to shop and find your “dream TV”.
- Buy an item that will last. If you do decide to purchase an expensive item, sometimes it is better to spend a little more money on an item that will last longer vs. an item that does not have a good record of reliability. One of the best resources to compare items is Consumer Reports, an unbiased magazine that tests products for reliability, repairs and price. For more information, visit www.consumerreports.org.
- Don’t forget to save for retirement. The stress of being an officer now is heavy, but it can be worse if there isn’t enough money to retire on. https://www.socialsecurity.gov/retirement/ is a great source to start the planning process. This government-sponsored website offers retirement calculators as well as information regarding government benefits. Following a few guidelines, one can reduce financial stress. Life is meant to be enjoyed and if you are financially happy you are more likely to be financially successful.