Real money help for real people
There has been pressure here and there to be more transparent about income, to share salary information, to disclose budgets. But it’s a bit like halitosis: something best discussed in private. Meanwhile, social media is fueling the dissonance between headlines and reality. This summer, we dominated the country with an unemployment rate of 16.1%. There are unprecedented queues at food banks, but also unprecedented Peloton sales.
Why are we always so fearful of how this sausage is made, especially at a time when so many of us are in pain – or at least under stress – and probably want to share, empathize, and seek advice?
“There’s always something that gets remembered,” says Misty Lynch, certified financial planner and life coach at Walpole. (She actually became a life coach because she noticed the strong connection between emotion and money for her clients.)
“For most people, they’ve been taught from childhood that it’s not a polite thing to talk,” she says. “There is guilt and shame at all levels of wealth, from living paychecks to having more than your neighbors. There is always some kind of hang-up.
Maybe it’s the envy of a friend who can switch to part-time due to a spouse’s fancy job, guilt over a windfall, or total panic about being kicked out . Maybe it’s the bile that rises in your throat at 4 a.m. when you realize you haven’t saved anything for college. Or the fear of knowing that this week might be when the ax falls and you have no emergency savings. Money and psychology are the same.
What makes matters worse is a system that links employment to health care, which equates career with dignity and security.
“The pandemic highlights this as many people who have experienced health problems have experienced a reduction in their income at the same time,” said Gerald Loftin, a certified financial planner at Norwood.
With that in mind, here are some tips from these very relevant, non-preaching experts on things you can do right now to stabilize yourself.
If you need immediate help: The city of Boston this week launched a free financial browser program, designed to sort through people needing help finding shelter, food and other necessities. It is part of the city’s Office of Financial Empowerment. If you have any difficulties, visit ofe.boston.gov/city-of-bostons-financial-navigators. Two other useful resources: www.mass.gov/info-details/covid-19-dhcd-website and www.mass.gov/info-details/financial-assistance-during-the-covid-19-crisis.
If you’re wasting money on impulse buys: Clicking on Amazon at 11 p.m. feels good. It gives us the dopamine kick that we used to get, you know, from interacting with people. Lynch instituted a one-year shopping ban for herself after falling into a rattling spiral during a late-night shopping spree while breastfeeding her baby. Now it’s even more tempting, she said.
“We’re on screens all day, and maybe we feel bad for our kids,” she says, who are locked up, bored and really want an inflatable ball pool. His thing? Let it linger in your basket for a day. Just one day. Then come back and see if you are still convinced with the purchase.
“Even this little delay causes the brain to use the human part, not the rush-seeking part,” she says.
If you are faced with an unexpected drop in your income: “The pandemic has affected people who seemed almost recession-proof, surprising me and them. No one had predicted it. Their hours have been reduced, or they can’t work physically, or they don’t have daycare, ”says Lynch. See: hairdressers, chefs, small business owners.
Now is the time to negotiate. Call the credit card companies and ask for a better interest rate. If you have student loans, find out about forbearance.
“Communicate with creditors about the forbearance options they offer to people facing job losses related to the pandemic. Contact local mortgage, rent, utility and food aid organizations about any available programs they can offer to help people facing job losses related to a pandemic. Consider renegotiating or refinancing interest rates on student loans, mortgages, credit cards to reduce monthly expenses, ”says Loftin.
Plus: Many certified financial planners offer pro bono services. Visit www.financialplanningassociaton.org to find one.
If you are saving bizarrely more than ever: A camp refund has just appeared on your checking account. What to do?
“Be intentional about it,” says Lynch. Think of the airplane mask cliché: We can’t help others until we help ourselves. So, before you shop or donate, make sure your own financial situation is in order. That means: an emergency fund placed in a high yield savings account (Lynch and Loftin both recommend 12 months of spending, if possible) and debt repayment.
That said: emergency savings are pretty laughable if you live paycheck to paycheck.
“Even put away $ 5 a week,” Loftin urges. “I’m aware that even this can be difficult for families,” he says, but even raising a few dollars each week provides a little cushion. It also creates a habit of saving.
Once you’ve dealt with an emergency fund, tackle the things you can’t borrow for: retirement savings and proper coverage, like life insurance.
Give back. If you are able to donate – that means you have emergency savings, a fully funded pension plan, and adequate insurance – then give back. Find a full list of Massachusetts pandemic relief funds here: www.mass.gov/info-details/giving-wisely-to-covid-19-relief-efforts.
Do not worry. As Lynch says, finances and emotions are inextricably linked. But your income, your savings level, and your current financial situation have absolutely nothing to do with self-esteem, and often everything to do with circumstances.
“Keep in mind the socio-economic differences based on race, ethnicity, educational group and geography make the ability to accumulate adequate savings very difficult for many Americans,” Loftin said.
Kara Baskin can be contacted at firstname.lastname@example.org. Follow her on Twitter @kcbaskin.