For Ellie Alvarado, a teacher and mother of three in Elgin, Illinois, figuring out how to pay the bills has become a source of anxiety and stress, especially when she and her husband argue over how to cut costs.
“When I say, ‘OK, we can’t buy anything this week or we’ll have an overdraft,’ he says, ‘No, what are you talking about? We both work. This should not be,” said the lady. Alvarado said.
Soaring grocery prices mean impromptu trips to McDonald’s are no longer necessary. Brand name cereals and other small luxuries are also missing. gas priceswhich recently hovered around $5 a gallon are also eating into their budget.
“Every time I fill up our van, I am amazed,” said Ms. Alvarado, who sometimes sees only $100 in her family’s checking account. “I’m always worried,” she added.
Her husband, who works in a factory, decided to work the night shift because the hourly pay is higher. But her family still couldn’t pay the rent.
“I can defer the mortgage for two weeks,” said Miss. Alvarado, 38, manages the family budget. “But then another two weeks go by and all of a sudden they call you.”
Inflation reached its highest level in 40 yearsforcing many families to make do with less. The consumer price index rose 9.1 percent year-over-year, with some of the highest prices rising on necessities like groceries, rent and gasoline, according to data released this month by the Bureau of Labor Statistics. The additional financial stress not only takes a toll on your bank accounts, but can also make you feel depression, shameanger or fear.
Study of the elderly published in 2017 found that how someone perceives and responds to financial hardship can have implications for their mental well-being. Those who were frustrated with their economic situation were more likely to have higher rates of depression than those who were also financially distressed but didn’t care — even after controlling for other factors such as health and income.
Fortunately, “there’s a lot we can do to manage and manage stress and emotions,” said lead author Sarah D. Asebedo, director of the Texas Tech University School of Financial Planning in Lubbock, Texas. .
We spoke to financial experts about how to deal with the emotional impact of worrying about money and how to have productive conversations about finances with family members.
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Engage in introspection and communicate with empathy
When couples disagree about how to manage their finances, each partner usually tries to convince the other to change their mind, says Rick Kahler, co-founder in The Financial Therapy Association, which is working on a book for couples with money problems.
Instead, Mr. Kahler suggested thinking about how you react when you discuss your finances. What is caused by your past? Are there stories or scripts you live by when it comes to your finances – like the idea that hard work always results in rewards?
Approach your partner with empathy and ask, “What are you hoping to spend this money on?” or “What are you afraid of cutting this object?” mr. Kahler said.
Both partners may eventually realize that they want the same thing – for example, that each of them wants the best for their family.
Amanda Kleiman, a Los Angeles-based financial therapist, noted that when discussing disagreements, any requests should be specific. So instead of saying, “We need to save more,” say, “Let’s find ways to save an extra $200 each month.” And try to use “I-statements” whenever possible, such as “I’m not happy with how much we pay for entertainment subscriptions, and I’m wondering if we can cut it down.”
For this to work, miss. Kleiman added that both partners need to feel that their needs are being taken into account and that they have an equal say in the matter, regardless of who worries more or who earns more money.
Spend wisely, but don’t deprive yourself completely
Whether you live on your own or manage the finances of a large family, it’s important to think about goals before you try to solve any money problems, says Megan McCoy, a licensed marriage and family therapist who teaches financial planning courses at Kansas State University.
What are you saving for? What do you need to cover with a limited budget? Write it down. Then think about possible cuts, but try to keep what brings you joy.
Ask yourself, “What can I cut that won’t negatively impact my mental health?” Dr. McCoy said. “I think people tend to limit too hard.”
For 36-year-old Sarah Davis, major (but expensive) expenses include mental health therapy and her pet cat, which has developed health issues.
“He’s like my little fluffy baby,” she said.
To afford such things, she moved away from Boston, where she works as a project administrator, and now lives about 25 miles north of the city in Lawrence, Massachusetts. Rent is cheaper there, she said, but it’s still “admittedly expensive.”
Understand inflation and how it affects you
What keeps her awake at night is the likelihood that something will go wrong and the uncertainty of how long prices will continue to rise.
“I’m really one bad tire away from being in financial trouble,” Ms. Davis, who lives alone with no other source of income.
There’s been so much uncertainty over the last couple of years that it’s “constantly worrying,” says the doctor. McCoy said. But having a plan that you’re working on—whether it’s saving up or taking steps to pay off debt—can give you a sense of power and control.
Orly Hersh and her family made the decision to move in with her mother five years ago at her home in Boulder, Colorado. This allowed her mother to grow old on the spot, and they stayed in the city they loved. She and her husband, both teachers, cannot afford to become homeowners.
“This is a great mutual benefit for all of us,” said Ms. Hersh, 53, mother of two.
While they are saving money on housing costs, Colorado currently has some of the the highest inflationary costs in the country and rising prices hit their budget hard. To pay the bills for her youngest daughter’s recent hospitalization, they would need to visit the hospital. Hersh’s pension fund, “which is depressing,” she said.
But, she added, it’s best that her stress levels pay off as soon as possible. “I really hate having this debt hanging over my head,” she said.
Explore different types of professional help
Seeking a financial advisor can be helpful for anyone who wants to improve their financial literacy. Perhaps, for example, you need advice on budgeting or want to learn the basics of investing. If cost is a concern, the Association for Financial Counseling and Planning Education offers free virtual financial coaching anyone who is experiencing financial instability.
Financial therapy is another type of counseling that can help people understand their thoughts and beliefs about money, especially when they feel stuck.
“The question is: what is going on inside? What unfinished business from the past needs to be finished? mr. Kahler said.
For example, one of his clients insisted on spending all the money that came into his checking account. During financial therapy, he realized that he had developed this behavior because he did not believe his money would be safe if he put it aside. Part of this came from his childhood when his parents took all the money from his savings account after they lost their own money during bankruptcy.
Talking to a financial therapist can help people sort out their feelings about money and understand long-held beliefs that “frees us up to start adopting new behaviors that are in our best interests,” Mr. says. Kahler said.
The worrisome economic outlook means that rising costs of living are largely out of our control. But if you know you should be making smarter financial decisions and you’re not, then “that’s when we need to look under the hood,” he said.