I want you to: deal with your money feelings, take one action, and start an emergency fund.
Deal With Your Money Feelings
I work with folks across all class backgrounds in my classes and coaching. After working with people who come from poor, middle-class and upper-class backgrounds I can tell you for a fact: anxiety about money has no class boundary. No matter where you are in terms of your access to resources, you have to find an emotional solution to money stress, anxiety, or avoidance in order to move forward on the tactical solutions.
Hack: Practice separating any spiraling ACK feelings from the accurate facts of any financial situation: the facts you can act on, the feelings you can process separately.
Behind our budgets and planning is an interconnected web of both how the money got to us (an important topic for another day) and how we relate to the money we get. Behind our capacity to work through our money is our way of relating to money, which often stands in as a literal metaphor for our ability to take care of ourselves, survive, and thrive! (read more on money reactions and feelings here)
The source is less important than the outcome, here: if your feelings are getting in the way of you doing things to handle your money, I want you to name the feeling, put it aside to take care of separately, and then get precise on what you’re going to do.
2. Get extremely clear on one thing you can do, and do it asap.
It’s easy to get stuck in overwhelm and not make any changes. But you know what’s even easier? Taking 20 minutes to make a call, set up an account, or redirect funds to an autopay.
You can’t “fix your credit” or pay off a looming debt in one day – but say we wanted to address the credit card issue above. In one day you can:
- call your credit card company and ask for a limit increase (this boosts your credit without you spending or paying off a dime), or
- call your phone company, ask how they can reduce your bill (and usually get something off!), and redirect the $10-$20 you save to something you’re paying on, or
- Cancel a random subscription and redirect the $9.99/mo to a debt or savings
- Set up an automated savings account that puts, say, $25/paycheck away.
The power of tiny movements in the direction you want to go can’t be understated: Saving $100/mo for a decade (available to me because I choose to ride a bike) + saving my tax returns is what got me a down payment.
Hack: What is the money thing you’re most worried about? That’s your hint as to where to start taking an action. Not sure what to do? Then determining what to do IS your action.
3. Develop an emergency fund.
An emergency fund is a pot of money you only use … in an emergency. I’ve heard this called a “feminist fuck-off fund” which I liked. Call it whatever inspires you to put this money aside.
Why? It’s for the “Oh crap!” in life. If you get sick, if you get fired, if you have surprise medical bills, if your living situation becomes unsafe… you can TCB. Think of it as interest you won’t have to pay on a credit card in the future or an option you wouldn’t have otherwise had. This is 100% about paying it forward, and future you is going to be grateful.
Do whatever you have to do (legally) to save this! An emergency fund is especially important for all the people who don’t have family resources to lean on, but is very important for everyone in terms of developing financial independence, not relying on credit, and developing options.
Hack: if you find a way to pay less for something, or pay a bill off, redirect the money you were paying into saving for an emergency fund. Paying yourself should not be optional.
How much? If you have no savings, start by saving at least one month’s rent/$1000 (whichever is larger). In a perfect world, you’ll save 2-6 months of all your costs (experts’ opinions vary).