Financial Stress in the Workplace
By Keith Bunn Jr.
July 13, 2012
In the July 11th edition of USA Today’s money section, they had a small poll listing towards the bottom of the page saying, "What is the most common cause of on-the-job distraction". The distractions were...
People stopping by your office: 27%
Phone calls: 26%
E-mail alerts: 19%
Text messages: 10%
Don't know: 10% (that was really one of the distractions)
Social Media: 8%
A Bigger Distraction
Although I'm sure those are true distractions, there is another distraction that didn't make the cut, which in my opinion, is a greater distraction and effects more people by far.
Personal finance issues effect about 55% of the work force today. When yours, mine, or anyone else's finances are a mess, it can occupy most of our waking moments just trying to figure out how we can pay the car payment, the light bill, or just put food on the table. It can be extremely stressful at time and we've all been there a time or two.
In a YouTube video I watched the other day, financial coach and speaker, Chris Hogan said, "You can't manage something you're not aware of." Meaning, if you don’t know where your money is going, there is no way you can stop it from going there and he is absolutely right! So how do you start? Well, you have to have a plan.
1. Emergency Fund: It is extremely important that the first thing you do is to get an emergency fund started. If you make more than $20,000 per year, you should have $1,000 tucked away for a rainy day. If you make $20,000 per year or less, that fund should be at least $500. This baby emergency fund is just enough to catch life’s little mishaps. Later, after you’re debt free, come back to this fund and build it up to 3 to 6 months’ worth of expenses.
2. Write a Budget: You need to make and live on a written budget each and every month. Why every month? Because each month won’t be the same. You will have birthdays, holidays, weddings, graduations, anniversaries… you get the point. The best kind of budget I know of is called the Zero Base Budget. To put it simply, income minus outgo equals zero each and every month. And if you’re married, work with your spouse on making the budgets. This is both of your mess!
3. Pay Necessities First: We all have our own definitions of what necessities are so let me explain. Necessities are Food, Shelter, Utilities, Transportation, and clothing. Notice that I didn’t say cable/satellite, cell phones, or restaurants. Just what you need to live on so you can fight another day.
4. Make a List: Make a list of all your debts except your mortgage. List them and start paying them off in the order of smallest to largest amounts owed, not smallest to largest interest rates. By paying them off in the order of amounts owed, it will give you some quick wins and help you stay motivated.
This whole thing of getting out of debt, living on a budget, and living on less than you make is not an easy task at first. It’s hard, but it is worth it!
Hebrews 12:11 says, “No discipline seems pleasant at the time, but painful. Later on, however, it produces a harvest of righteousness and peace for those who have been trained by it.”
Questions for you
· Have you ever done a budget before?
· If you’ve had one that failed, what do you think went wrong?
· Do you understand what a Zero Based Budget is?
· Do you understand why an Emergency Fund is so important?