For your Financial and Mental health

One of the things I have been blessed with is financial prowess. I have earned a good living and have been able to live within my means. Many many people don’t have this blessing and it affects their mental health. The U.S. National Library of Medicine has been looking debt and mental illness for some time now. Below is another link as sometimes the links I insert dont always get to the right URL.

https://www.ncbi.nlm.nih.gov/pubmed/24121465

So to paraphrase what I have read, many people with OCD, acute distress, depression and other common mental illness have a higher risk of financial debt. Financial debt can increase symptoms of mental illness and create a cycle of behavior that can have consequences that reach far into your adult life. Additionally, we often associate debt with negative personal abilities in our society. Someone in debt is often called a failure, immature, incompetent so on and so forth. So on top of the personal cycle of negative behavior we have indirect social shaming which makes it even harder for those with debt. In extreme cases, where the cycle of debt increases the effects of mental illness we see the break down of families, personal relationships and in some cases suicide.

I am no mental health professional I am not qualified to tell you how to heal yourself. However I can offer you 5 tips financially to help you secure a financial foundation to help you through tough times. A quick story, when I was 17 my father died, he did not carry life insurance and my mother lost the house. We had generous relatives, but that situation could have gone the other way very quickly. Again I am not professing to have had a great deal of hardship in my life, but anything can happen at any time you have to be prepared and part of that preparation is financial.

  1. Start and emergency fund: This is for when the poop hits the fan. This should be minimum of 6 months worth of your current bills. This protects you from loosing your job or devastation. Example of devastation is a tornado. If one hit your house tomorrow and destroyed it, do you have the resources to cover needs? This has to be a liquid account where you can get cash. check or wire the same day.
  2. No Car debt. You should be paying cash for vehicles. If you are borrowing money to drive a car then you are buying something you cant afford. This principle scales based on income. Vehicles are transportation and many of us have fallen into the trap of trying to use vehicles to look good. Trust me if you are physically fit and a good person you’ll attract the right person. There are plenty of good used cars out there, buying a new car isn’t a good investment.
  3. Two credit cards paid every month. You should pay your CC in full every month. Next to housing this should be your next top priority. CC debt piles up fast and so does the interest. You should have one primary card you use for purchases and one back up just in case. That’s it, you don’t need a CC for every store just one main master card or visa.
  4. Make a budget. Be honest about your spending, list everything on a monthly basis you spend money on. Then list your income and look at your net. If you do this, and if you can do it honestly (yes that includes the 4 bucks a day at starbucks) then you can really see where your money is going. you can then eliminate things and adjust your expenses accordingly. This is one of the hardest things to do financially as an individual as we often don’t want to list everything or cant remember everything. Spend the time and do this and revisit it often. This is your own “business plan” you need to know what you are spending money on.
  5. A minimum of 10% of your money to automatic retirement savings. If you have a plan at work, great, if you don’t start one at fidelity. This should be automatic they take the money from your paycheck or bank account and you never see it or touch it. This will begin to compound and “snowball” over time. Start this as early as you can in your life. Here is a really good article about the positive effects of investing and compounding. https://www.investopedia.com/articles/investing/100615/investing-100-month-stocks-30-years.asp

So if you can do these 5 things you will feel better about yourself. When things go bad, and they will, everyone has calamity at some point in their life, you will be in strong financial position. Mental health is really important and being in financial dire straights can really inflate the negative impact. Take this one last tip from me to help you, designate a half hour every week to go over your finances. That’s it  ! a small investment of time now may save you a lot of pain in the future.

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