Money Management

Stressed? Depressed? Here’s How To Cope

If you’re feeling Grinch-y, Scrooge-y and a bit more than bah hum-bugged, overwhelmed by the array of demands the holidays bring, there are ways to make things better, according to a Mayo Clinic release.

Among the stressors are too many – sometimes unwelcome – guests, selecting and then paying for gifts, shopping, baking, cleaning and entertaining. And the list goes on, depending on your own circumstances. Plenty to make for a no-good, no-fun, no-happy Noel.

The trick, if possible, is to recognize the potential and stop it at the pass. Especially if you’ve had problems in the past, anticipate an emotional toll and don’t let it happen.

The Clinic’s suggestions include:

1. Acknowledge your feelings. If you’ve had particular challenges recently, don’t expect them to be less emotionally draining just because it’s the holidays. It’s all right to cry or otherwise express your feelings.

2. Reach out to others. If loneliness or isolation get too big to bear alone, seek out community, religious or other opportunities to be with others. Volunteer to help others as a way to put your troubles into perspective and broaden friendships.

3. Be realistic. Nobody’s holidays are perfect. If things are different from last year, if your family structure has changed, traditions and rituals altered, don’t expect things to be the same. Hold onto some of your personal traditions and be open to new ones. For example, if your adult children can’t make it home, find new ways to share long-distance, through emails, pictures, chats or videos.

4. Set aside differences. Looking for the ideal in any normal family is an exercise in futility. Accept each other as is. If there are grievances, wait for a more opportune time to discuss them. If others get upset or distressed, be understanding. Avoid confrontation.

5. Stick to a budget. If your stress and depression are triggered by money matters, make them matter less. Plan a realistic holiday budget and then stick to it. Buying an avalanche of gifts that you can’t afford will only extend the pain beyond the holidays. Give homemade gifts, donate to a charity in another’s name, promote a family gift exchange.

6. Plan your time. Divide up the chores into manageable bits: a time for shopping, baking, parties and other activities. Avoid last-minute scrambling. Be sure you have the ingredients you need for cooking. Line up help for preparation and cleanup.

7. Learn to say No. If you overextend yourself, you end up feeling resentful and overwhelmed. If you can’t involve yourself in every possibility that comes your way, don’t feel the need to apologize. If you can’t avoid the added demands, for instance, if the boss says he needs you overtime, drop something else from your schedule if you can. The days during the holiday season are just 24 hours long, as usual. Don’t try to pack them too tightly.

8. Retain healthy habits. Have a snack before a party to avoid overeating. Get enough sleep. Make exercise part of every day.

9. Take a breather. Make time to relax and be by yourself. Just 15 minutes may be enough to refresh and help you handle what’s on the agenda. Take a nighttime walk. Listen to music, read a book, get a massage. Whatever it takes to relieve the tension and prepare you to jump back into the maelstrom.
Laugh out loud.

10. Get professional help if you need it. If you persistently feel sad or anxious, have recurring physical symptoms, can’t sleep, are irritable and feel hopeless and unable to face routine expectations, see a doctor or mental health professional.

Sounds like a dream. No more debt. No sleepless nights trying to figure out how to scale the mountain of credit card debt. No painful personal contacts with collectors. Financial freedom!

The advice takes just a minute. Here we go!

Resolve to spend less than you make. No other financial wisdom has ever been better than that. Make it a habit. Embed in your mind the truism that you can never get out of debt by going into more debt.

Good Debt vs Bad Debt

Learn to distinguish between bad debt and OK debt. Don’t settle for any debt that requires more than 10 percent interest, and watch for tax advantages. Home mortgages and college debt that increase your overall worth over time are among OK debts. Auto loans are marginal, since they don’t appreciate in value. Most everything else is bad debt, such as credit cards or high interest “quick cash” loans. Avoid them like the plague.

When choosing credit cards, look for the lowest annual interest rate. Use cards for emergencies only. Get rid of cards that are not essential and simply pose a temptation to buy what you don’t really need.

Line up your bad debt accounts in a row. Add up the minimum payments and pledge to pay the minimum on each, plus whatever you can must. Choose the account with the highest interest and work on it first, and so on down the line. Resist the temptation to add to any of these accounts.

Request that the issuing institution lower the interest on your cards. Tell them you are aware that there are cards available at lower rates, but that you want to stay a loyal customer. The response may make you uncomfortable, but stick to your guns. The institutions depend on their customers to make their profit, remember? If you have any bill on which interest tops 14 percent, try to get it down to at least 11 percent.

Be aggressive in paying down debt, but don’t put yourself in a bind with other obligations.

Look for ideas (and sympathy) through discussion boards such as consumer credit/credit cards, provided by The Motley Fool. The company, through its credit center, also offers workable ways to get out of debt.

Past Idocy

When your bad debt can be filed under “past idiocy,” make good use of the money you have saved by saving it.

Commenting on Motley Fools good advice, a woman said that she and her husband had almost maxed our their 401k and planned to use tax income and savings over the next year to pay off debt. Then life happened, with two hospital admissions, operations, hail storm damage and co-pays. Then the husband was laid off. “We spent every penny paying on debt on one credit card and a car. Then the credit card issuer, pursuant to the state laws where they lived, raised their maximum interest to 31 percent. Help! “We did not hesitate. We took our money out of our IRA and paid off every penny we owed. You wouldn’t believe how much free money we now have. We still have insurances, utilities, groceries and gas, but we have enough money that we don’t have to use the credit card. We kept one card, which we pay off monthly. (Our experience shows you should) pay off the credit card first, if you can.”

That’s good advice. And if it took more than a minute, you can count it time well spent.

Many people have multiple accounts in different categories – savings accounts, investment accounts, and even retirement accounts. But there’s often resistance to the concept when it comes to checking accounts. On one level, this makes sense because checking accounts typically impose fees on the accounts. Two checking accounts means two sets of monthly fees. But if you can have two checking accounts with low fees or no fees, there are at least five reasons to have two checking accounts.

In case of a security breach

People worry about identity theft, particularly the biggest kind where your entire identity is hijacked and all of your accounts are compromised. But it’s far more common that a thief gains access to a single account. Though it is possible for them to acquire access to all other financial accounts, the theft of the original account is often discovered before the thief can access the others.

A checking account is particularly vulnerable to identity theft because checks include not only your personal information, such as your name and address, but also the bank routing number, and most important, your personal account number. Both numbers are imprinted at the bottom of your checks. By issuing checks to pay bills, you’re putting this sensitive information out to other people, some of whom may be thieves.

It’s worth noting that identity theft is usually an inside job, which is to say that an employee of any company that you do business with could gain access to your account information if you pay by check. It’s not always possible to avoid paying your bills by check, so you have to be aware of the possibility that account information can be stolen. It’s a reality that we all live with.

But if your account information is hijacked by a thief on one checking account, you can continue to transact business with your second account. This will minimize the disruption caused by the theft. Just be sure that the second account is held at a different bank than the first one, so that it will not be so easy for the thief to get access to both accounts.

To allocate expenses

We often hear of people budgeting using envelopes – either virtual as part of an application, or even literal envelopes. Having two checking accounts can help you to do this without having to resort to buying and implementing an application, or maintaining physical envelopes.

For example, you can use one checking account to pay minor expenses, such as grocery bills and ATM charges. You can use the second account to cover larger expenses, such as your mortgage payment, health insurance or car payments. This will help you have the money available to make the larger payments, without running the risk that the swipe of an ATM card could leave you short funds.

To maintain a budget

This is similar to the concept above, except that it gets more specific. For example, you can use one checking account to pay for fixed expenses, like your house payment, debt payments, and insurance premiums. The second can be used to pay for variable expenses, such as groceries, entertainment, gasoline, and impulse purchases.

Once again, the separation will create a wall between your expense categories, and will keep you from over spending in either category. By limiting your variable expenses to a single checking account, you can limit the amount of money that you might have available for impulse purchases, such as clothing and entertainment.

To save money for large expected expenses

You should always have a checking account to pay for your expenses, and an emergency fund to be available for true emergencies. But there are what you might call halfway expenses – outlays that are large enough to be worthy of an emergency fund withdrawal, but don’t rise to the level of an actual emergency.

Car repairs are just such an example. Though you can’t know when they will strike, or how much they will cost, you know that they’re coming at some point. That means that while the cost will be disruptive, it won’t be entirely unpredictable. You can use a second checking account as a place to accumulate money to handle such expenses, that will help you to avoid dipping into your emergency fund.

Other uses could include using the second checking account to accumulate money for an upcoming holiday season or vacation. You may even use it if you know you’re going to have a major repair, such as replacing your roof or HVAC. Once again, these are large and disruptive expenses, but they’re not emergencies because you know they’re coming.

To have a second account to tap instead of using a credit line

Many people fall into the pattern of tapping their credit lines whenever their checking account is empty. But if you have a second checking account, always stocked with at least some money, you can access the funds in that account, rather than using a credit card or withdrawing money from your emergency fund.

The idea is to create levels of liquid cash that you have available so that you will not take on debt or withdraw money from accounts that have other purposes. This can work especially well for married couples where each spouse has their own checking account. If one spouse is running low in their checking account, they can get funds from the other spouse’s account.

If the fees charged on your checking accounts are reasonable, look into maintaining two checking accounts. Sometimes maintaining a smooth cash flow is worth paying the extra cost of the second account.