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7 Tips for Tough Financial Times

The new jobs report is bad news. Here's some advice to make it through a tough financial season.

Chances are that the current U.S. economic crisis and the turmoil in the financial markets are messing with your life. According to the most recent figures from the Labor Department, there were 131,000 jobs lost in the United States in July alone. The unemployment rate remains at 9.5 percent. People are hurting.

Maybe you are right out of college and can’t find a job. Seventy-three percent of today’s graduating seniors will leave college with student loan debt, averaging about $23,000. The average outstanding balance on undergraduate credit cards is $2,169. Nearly half of students graduating this spring are expected to move back home, held back by the economy in establishing lives of financial independence.

Perhaps you were laid off from a job. The timing couldn’t be worse with a new baby or a new mortgage.

Many twentysomethings listened to the conventional wisdom of diligently putting money into a 401(k), or IRA, or in stock investments outside of retirement accounts. But now you are beginning to wonder where these investments are going and when the declines will stop. They say it will all eventually work out, but seriously—when is it going to stop?

All of the above is the “now” problem. Meanwhile, a larger “later” problem is brewing. The clock keeping tally of America’s national debt has officially run out of digits to record the soaring figure. The U.S. National Debt Clock was installed in Manhattan in 1989 to highlight what was then a $2.7 trillion debt. But when the total crept over $10 trillion, owners of the clock realized they needed another digit—a fourteenth digit, to be exact. Who’s going to inherit all that national debt? You!

Regardless of where you find yourself, you may be feeling the brunt of the economic crisis on all sides. You probably feel helpless and outraged—and that’s true whether you have a job or not.

On a purely practical level, there are several things you can do to help dissipate the financial anxiety and struggle of the current economic crisis including:

1. Create a budget. By making a budget, you will become aware of where you are spending money, how much you owe and where you may need to cut back. CNN Money created an online budget generator that allows you to plug in every aspect of your finances and calculate what’s going where—and what should stop going where.

2. Curb credit card use. Just because you have credit available doesn’t mean you should be using it, so start paying with cash more often than credit cards. This will help you feel more in control of your finances and save you from receiving a large bill at the end of the month that you may not be able to pay in full, and therefore fall deeper behind.

3. Don’t stress over what you can’t control. Just as you can’t control if it’s going to rain tomorrow, you can’t control if the $800 billion bailout package is going to improve the economy. What you can control, however, are your own finances, which will help build confidence and reduce stress. Stop stressing about stuff you can’t control; focus on the things you can.

4. If you have one, be glad for your job. Maybe you hate your job, and it’s not what you want to do long-term. The good news is that you do in fact have a job when many people don’t. This may not be the best time to quit your current job and pursue other ambitions. It’s all a matter of timing. Keep the job, do it well, be thankful and pursue your other ambitions on the side for now.

5. Place a priority on saving. You’ve heard the phrase “save for a rainy day,” right? It’s raining! If you’ve been living from check to check and maxing out your credit cards, you’re in trouble. If I could convince you of just one financial principle, it would be this: Save a minimum of 10 percent from every paycheck, until the day you retire. Make sacrifices wherever you can, and live within your means.

6. Work together. Twentysomethings are masters of collaboration and social networking. Apply this mentality to dealing with the present economic crisis. Whether it’s your neighborhood, church small group or a Facebook group, form networks where people can pool ideas, information, resources and possessions to help each other out. Such networks could also pool resources of compassion to help others in the community in dire need.

7. Apply truth. There’s a spiritual principle that says “you reap what you sow.” If you sow a life of dependency upon financial and career success as a source of identity, security, peace and fulfillment, then you will reap the volatility of these attachments deep in your soul. Markets fluctuate positively and negatively, stocks rise and fall; companies are born and die; jobs are created and dissolved; 401(k)s go up, go down and sometimes go away altogether; homes are bought and go into foreclosure—as they say, “It is what it is.” Even if you are responsible with your own finances, there are many things still left out of your control.

Jesus said that His peace is “not as the world gives.” In other words, the peace of God is not contingent upon circumstances. God’s peace is never threatened or diminished by economic conditions. You can experience the present reality of the Kingdom of God even if you lose your job, watch your 401(k) or other investments decrease in dollar value, or are forced to move back home. As you become more familiar with the presence of God within you, allow the stresses of daily life, including ways you are negatively affected by the economic crisis, to prompt you back to that place of awareness, allowance and reliance upon the Kingdom of God.

Jim Palmer is the author of Divine Nobodies and Wide Open Spaces. You can find him at DivineNobodies.com, and on Facebook and Twitter.

7 Comments

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Robert Andrew Hayes commented…

i would really like to see relevant do an article on www.common.org , especially in times like these. if you don't know what this website is, check it out.

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Curtis Swartzentruber commented…

if you have trouble budgeting or keeping track of where your money is going, Mint.com is a good resource that makes it all pretty straight-forward. You have to be willing to tie your financial accounts into their system, so it may not be right for everyone. but I really like it.

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stickboy160 commented…

interesting . . . no comments in the article on how to remain faithful givers in financial hard times (or any mention of giving as part of our faithful financial management . . .)

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Mandar commented…

Perhaps it's not so much sunny as overcast.

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Anonymous commented…

When I saw the heading of the article on the main page of Relevant honestly I wasn't expecting to agree with any of this article but point by point I liked it and I think it's advice that every twenty something needs to read and apply, especially the subjects re: saving and debt.

I would add a couple points to the list...

8) take every opportunity to increase your income that you can. There's a lot of leisure time that we've been afforded these days. If there wasn't, I wouldn't have had time to write this post; get the heck off Facebook and go mow a lawn...no, you're not above doing stuff like that. Few years ago I had a kid in my youth group who started a lawn business and I dedicated 4 hours one day a week to work with him (beyond my full-time job as a student pastor) and at the time that meant mowing about 5 yards each week. That brought in about $600 extra income a month and that was an awesome blessing at the time. Our first child was just born and there were hospital expenses etc. for that that insurance didn't cover...my wife cut back from full-time to part time at her job to now be a mom (which I was 100,000% behind) and so $600 a month extra was huge for us. There are opportunities out there - I'm not saying go bag groceries at minimum wage (unless you are in desperate need for cash) but there are opportunities for extra work that can arise through networking and they represent a good trade off between time required and income they bring in

9) the God factor--giving. Please don't hear a prosperity gospel here but what I will say is this: Jesus seemed to highlight a certain woman giving her last two coins. That's what faith is; it's saying God I put my finances on the altar; I've done all I can do (cut spending, prioritized etc.) and now I have to trust you to do the rest. Strike that...now I *get* to. He takes care of the needs of His kids. All I can say about that...

Great article.

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