Ever felt like one of the people pictured above? Well, you’re in good company. In 2010, Thrivent Financial and Kiplinger asked folks how they felt about their financial situation. More than 30% said they were “struggling” and another 24% said they were “worried.” Check out more survey findings and take the survey to see how you compare. The point is, many of us don’t feel very good about our money.
Financial insanity abounds at the macro level – in institutions and governments – and at the micro level – in families and with individuals. Some nonprofit professionals could benefit from a shift in perspective on the relationship between their money and their work.
We don’t do what we do because we get paid a lot.
We do it because it matters.
We do it because it makes the world around us better.
That's a noble pursuit, something to be proud of. However, as we do this work, we don’t have to live with stress, worry, fear, and anxiety. We don’t deserve it, and there are things we can do about it.
Take this one-minute, financial fitness quiz to figure out which animal archetype best fits your financial attitudes and behaviors.
Then choose one or two of the habits below that resonate with you and start laying a solid financial foundation. Oh, and do step 8, from now on.
- Check in on your values. We’ve all done the values assessments and personality profiles. Now start asking, “Is who I want to be reflected in how I spend, save, or share my dollars?”
- Track and balance spending. This is the most often skipped piece of financial sanity for our generation. Find a tool/system to use to retroactively check in and proactively choose where money will go each month. The key is to find something that integrates into what you already do. It might be opening Mint.com (a website that allows you to view all your financial accounts in one place) as another tab when you check Facebook and email each morning. Or maybe you are an Excel spreadsheet nerd. If you want a place to start, check out these tools and calculators.
- Plug spending leaks. These are the things we buy without really thinking about it and that often have cheaper alternatives. Identify yours and find a wiser way to do it. Do the math, it might be interesting. One example to consider: making coffee at home versus unlocking the Level 10 Fresh Brew badge on Foursquare because you’ve been to every coffee shop in the Cities.
- Save $1,000, then work toward 3 months + emergency savings. This saving is to cover the “what-ifs.” Get to $1,000 as the first milestone, then finish Step 5, then come back to this and extend those savings to cover your expenses for three months and emergencies. This is separate from the money saved for retirement, education, or things like vacations.
- Get rid of credit card debt. More than a few of us have dug ourselves into a deep hole trying to “build credit” using our credit cards and vowing to pay them off. Get rid of the debt and then don’t put anything on the card that you can’t pay off immediately.
- Have basic life and disability income insurance. Yes, young adults should have them. Make sure to take advantage if your work offers them and make sure that you have enough to cover the things that matter. Let me know if you need some help checking in on this.
- Save early, often, and easily for the long term. Getting money taken out of your paycheck or setting up automatic transfers into different types of saving accounts seems to be the best way to make this happen.
- Don’t do it alone. Ever again. This is the most important step. Find sources of information that you trust. To start, check out this list of the top 100 personal finance blogs . Listen to MPR’s money programs. Talk to a coach. Email me if you have questions.
What questions do you have about how to recapture sanity in your financial situation?
Image with permission. Copyright of Thrivent Financial.