financial freedom Archives - Diary of a Jamerican Mom

If you think back to a stress-free time in your life, either you had no responsibilities or you had everything under control. Well, if your life is anything like the rest of us, the first option might have been during our pre-teen years and the latter is totally impossible. Sadly, a jus’ so di ting set(Translate – it’s just how life works). This post will focus on four simple ways to reduce financial stress.

Can we all stop and think of a time in our life when we were stress-free? Just think with me for a minute… Where would you be? Recreate the scenery right now.

For me it would be back when I was a child, playing with self-made toys with my neighbors and friends during summer vacation. You know those months when all you had to do was play, and your chores of course. But the top priority was play time and interacting with friends. The only stress we had was making sure that we completed our chores on time and deciding what teams we would be on. In Jamaica, it would probably be 90 degrees, brisk breeze… we’d be eating fruits from the trees, playing one game after the next. Looking forward to trips to the beach; to some new spot on the island you had never been; visiting relatives and friends. Laughter and fun was never in scarce supply. Ahhhh…

Life throws so many things our way; some real, others imagined. These circumstances can lead to stress of varying degrees. The focus of this post is on those of the financial kind. I know you know them. We probably can all speak from personal experience but that will not be the focus of this post. I want us to consider 4 simple things we can do to reduce that financial stress and recreate some of that feeling we had during the stress-free time in our lives, even if just for a short time.

My tips are loosely based on Dave Ramsey’s plan but scaled back based on my own experience and where I am on my journey.

Build up your emergency fund

This is for unforeseen eventualities that WILL pop up. For example, an unexpected car-related expense, a house repair, you get the picture. Since I am in the US the recommendation is to have at least US$1000. You can equate that to your own currency and decide what that figure should be for you. But make sure you have the emergency fund built up so, not if, but WHEN those curve balls come at you, you can dig in. But remember to replace it. It should always be available.

Plan your budget/expenses

When I say plan, I mean every dollar. Have you ever heard of the concept called zero-based budgeting? I hadn’t either, but it means that you should budget every last dollar until there is no money left in your account. I know it sounds strange but stay with me.

Now, this does not mean you should spend all your money, but it simply means that every dollar is accounted for, and get this… even for saving. See how that works! So you know when your funds are coming in, you look at all your categories(monthly bills, everyday expenses, fixed expenses, debt, giving , saving etc.) and you allocate all your income to each category as appropriate.

I must admit this was hard for me at first, but the more you do it the more you get used to it and you begin to see the value. That way when you have to spend money on say ice-cream for the kids, or shopping for those shoes you have been eyeing that are now on sale, there is no guilt. It’s planned for. And guess what, your stress levels go down.

Plan your payments weekly

This is one of my valuable tips. I started doing it and a couple weeks ago I skipped out on it and something unintended came up and I panicked. What happens when you panic, stress levels go up! There might not have been a need to panic but because I had lost control of exactly where things were I could not resolve it in my mind. Not until I sat down and caught up did I begin to feel more at ease. What this entails is every week(or however often you need), you look at all your upcoming bills or payments and schedule them to make sure they are paid on time. Some people have separate accounts for all the different categories but that’s a bit too much over head for me at this point. Try planning weekly and let me know how it works for you.

Last but not least,

Come up with a plan to get rid of your debt

Now this is no secret. I shared with you a few posts ago how I was able to overcome the medical debt trap during my pregnancy and the birth of my son. Some debt is unavoidable. I don’t know many people who can survive without debt so it would be unfair to say, do not get into debt. However, we should try to get out of it as soon as we can. Consumer debt… no brainer. That’s a given. That needs to happen fast. The only people who benefit from that kind of debt are the card companies. But other kinds of debt like cars, homes etc. we should try to reduce or eliminate as soon as possible.

I know it’s a tall order and I confess I do have debt. The stress factor comes in when you fall behind on your obligations and are eventually either staring the repo man or foreclosure in the face. All the more reason to try to reduce or eliminate them as soon as you can. This would be the ultimate financial peace where you owe no one. Wouldn’t that be grand!!

These tips are very simple so if you haven’t started they should be easy to adapt. For those of you who are farther along, please share. I am also on my journey to ultimate financial peace as well. I will be sharing with you any tips that I come up with that can help you. Feel free to share with me your strategies as well. Each one, teach one.

Please join my community by subscribing so you never miss a post. Please also follow me on my social media channels. Thank you again for stopping by and looking forward to sharing with you again.

In Jamaica we have a saying “When trouble teck you pickney shut(shirt) fit yuh“.

Translation: When trouble comes to you, a child’s shirt will fit you

Meaning: When in difficult situations, you have to make adjustments to survive

I do believe we can all relate to a time in our lives when despite our best laid plans, we have suffered from some kind of setback, financial or otherwise. You know the kind that throws you into a tailspin and you’re left with your hands on your head wondering what your next move will be… the kind that makes you start to think of the worst possible scenario and thinking of contingency plans just-in-case. I am sure most, if not all of us can relate. Today I want to focus on those of the financial kind, you know them.

Well, I have had my fair share of those, and I thought I’d share with you how I was able to move forward from them and some lessons I have learned along the way. Now, I know some of you might have had worse things happen and others; not so bad. But what I will attempt to do is to pull some references from across the board that we all can relate to and hopefully the lessons will apply to your situation regardless of the intensity. Please keep in mind that this is not financial advice; I am just sharing my experience with you.

None of us is immune to adversity, especially financial ones. And it seems to me that living in the US presents some magnified challenges. Not just because I am away from home, but suffice it to say, it’s much easier to fall into a situation that can have immediate impact which can make recovery difficult. Can I get an amen?

First situation that comes to mind was during my pregnancy and right after my son was born. Now you don’t know what you don’t know until you need to know, right? My first encounter dealing with health insurance in the US was an eye opener for me. Now all I knew was that I had health insurance, after all I could see the contributions being extracted from my paycheck every 2 weeks. I’ve had health insurance before, how different could it be?? Think again!

I had started my regular appointments to the ob-gyn and presented my health card. On each visit I would just walk out of the Dr’s office, no payment requested. So I thought to myself, “Hmmm, at what point are the going to ask me to pay and how much”. I asked, but I wasn’t given an answer(the admin people have no idea). You see, for the most part, all of that is on the backend. After all, where I’m from, we talk about the money up front. So you know what you are dealing with.

Anyway, the time came to talk about payments, then I realized that there is a lump sum charge for all prenatal visits and then another for delivery. So we discussed that and agreed on a payment plan. As onerous as it was, we had no choice. After all I couldn’t have decided to deliver this baby myself!!

We started paying the agreed amount monthly which would take us up until time for delivery. When we go to January of the following year, we realized that our payment increased. They advised me to call the insurance company who then proceeded to tell me that my deductible was reset at the beginning of every calendar year. What!!! I didn’t even know that. It was as if they were speaking a different language; copays, deductibles, out-of-pocket, in-network, out of-network HMO, PPO. Lots of complexity that was nothing like my SHAPE plan from LOJ back home or my mother’s Blue Cross plan that I had until I was of age. This is stuff no one bothers to talk about or explain, especially for a newbie immigrant like me. The assumption was that you already know.

The long and short of it was that I had to come more out of pocket. AND I hadn’t started talking with the hospital yet!! That was another large lump sum payment that would become due in June.

Apart from medical payments, we had to think of preparing for the arrival on our son. He needed clothes, blankets, diapers etc. That stuff costs! We were just bleeding funds, out of our ears. At the same time we were thinking of moving from the apartment we were renting at the time. What a mess!!! There was the cost of moving, the costs associated with purchasing our new home(our mortgage turned out to be less than our rent) among other things. At the time my salary was good, but not great and my husband was working a commission-based sales position and the pay was not consistent.

We not only had to look for ways to cut back on everything, we had to set our frame of mind to tackle the challenges because in this case, we did not have much of a choice. With a baby on the way, in our minds this was just something we had to do. I’m thinking back and wondering how under the heavens we got it done, BUT WE DID IT, without debt.

We have had other challenges since then and have had to get creative in pushing through them. For instance, we have in the past decided to go down to one income temporarily(it was only for 3 months), so I could stay home and care for my baby. At any rate, who knew you had to get on a waiting list before your child was born to secure a spot in a decent child care facility. I had not, so I did not have many options. Being far away from home as well with no family support made it even more difficult. I was so grateful that my mother agreed to come and care for him for a while so I could go back out to work and until we could get him into a day care facility.

Below is a consolidation of a few debt-free strategies we have employed to manage and overcome financial setbacks and challenges we faced.

We looked at where we were spending our money

Budgets used to be a bad word for me. I am not very structured when it comes to finances. But we put it all down on paper and it became real. No guessing or estimating, it was there for us to see. The biggest shocker was how much we spent on food! That was our biggest monthly expense, after the mortgage.

We trimmed the fat

After taking a critical look at all our recurring bills, we looked at how much we were paying and either eliminated the bill completely, or found a away to reduce it. Bills like expensive cable was dropped. Then we renegotiated our telephone bill and car insurance.

We cut our spending – strict “no-spend” periods

We would go for a period of time when we would not eat out, purchase clothing or anything like that. Instead of buying lunch at work, we packed our lunches in order to save money. You would be surprised at the difference this makes to your budget.

We found ways to cut our grocery spending

The first thing I did was to shop my own pantry and refrigerator. I don’t know if you’re like me, but my pantry was filled with things I didn’t even know I had. In my case because my pantry was so disorderly. I took the time and reorganized my pantry, threw out expired items and found a place for everything else. My items were easy to find therefore I knew exactly what I had so I could plan meals around what I had already.

I also started clipping coupons. Don’t knock it, it’s a huge money saver especially on non-perishables. Sometimes I end up with items for free!! I also changed the way I shopped for certain items. (I could write a whole blog post on this). Even my husband is adopting my critical(read cheap) shopping habits.

These are simple everyday strategies I have used. There are some other larger strategies that I will explore with you another time that will have an even bigger long term impact. I didn’t want this post to get too long.

But please share with me some of your tips and tricks in the comments below. I am very eager to learn from you. You can also follow me on my social media channels so we can continue to learn from each other.

Tag: financial freedom

4 Basic Tips for Reducing Financial Stress