What Should my Budget Look Like After a New Jersey Bankruptcy?

New Jersey bankruptcy

When overwhelming debt and missed payments start to control your life, bankruptcy can offer a fresh start to begin rebuilding your finances. It is important to take advantage of this clean slate by doing everything in your power to learn from past financial mistakes and create better habits for your future. Debt can accumulate from overspending, a medical emergency, or the loss of employment or income. No matter how you found yourself in debt and filing bankruptcy, there are steps to take to make sure it doesn’t happen again. One of the best ways to become more aware of your finances and prepare yourself for unexpected expenses is to create a household budget.

A household budget will allow you to track your spending and find opportunities to build your savings. Every budget will look different for every household, which is why you need to make sure you are creating a realistic budget that works for your household. Learning how to use this helpful tool will help you manage your money and bounce back fast after bankruptcy. Here are some steps to creating a household budget while recovering from bankruptcy:

1. Track Your Expenses

Take the first thirty days after bankruptcy to track how much money you are spending and what you spend your money on. The best way to do this is to create a spreadsheet listing different categories of expenses and then tracking these expenses throughout the month. Make sure you include every purchase you make to ensure you are getting the most holistic view of your finances. After you spend one month tracking your expenses, subtract your total expenses from your total monthly income.

2. Adjust Your Spending Habits

What are the results? Pay attention to where your money is going. You should never be spending more than you earn in a given month. If you have more money going out than coming in, it’s time to figure out where to make some spending cuts. You should start by determining which expenses are essential, like groceries and utilities, and which expenses are not. Start cutting back on any non-essential expenses.

3. Allocate Your Income

Once you know where your money is going and where you can start to make some cuts in spending, it’s time to figure out how you’re using your money. The best way to do this is to determine what percentage of your monthly income goes to specific expenses. For instance, if your monthly income is $4,500 and you spend $1,000 a month for your mortgage payment, you’re spending 23% of your monthly budget on your house. Here are some suggested percentages to compare with your budget:

  • Medical: 5-10%
  • Housing: 25-35%
  • Transportation: 10-15%
  • Savings: 10-15%
  • Food: 10-15%
  • Utilities: 5-10%
  • Insurance: 10-20%
  • Recreation: 5-10%

These percentages are only meant to serve as rough guidelines and they will not work with every household, but this is a great jumping off point for creating your household budget. If you find your spending in the above categories is significantly higher than recommended, you may want to start cutting back on those costs.

4. Finalize Your Household Budget

Based on the above information, you should be able to create a monthly budget that works for your household. Continue to track your expenses to keep yourself accountable for your spending and to make sure your budget is realistic. Staying aware of your spending habits will help prevent former bad habits from resurfacing. Pay specific attention to growing your savings and emergency funds. These financial reserves can really save you in the event of an emergency.

At Veitengruber Law, we know that life is unpredictable and rarely goes according to plan. A monthly budget can’t account for everything life will throw at you, but it can help you prepare for unexpected life events and sudden expenses. Creating a household budget will help bring some stability to your financial status and ensure you can weather the set-backs. If you need help making your post-bankruptcy budget, we can help!

Financial Planning When You’re Expecting a Baby

financial planning

Along with all of the big emotions that accompany a positive pregnancy test comes the stressful question: How will I be able to afford this? No matter if the pregnancy was planned or a total surprise, many parents find themselves balking at the impending massive expenses associated with supporting a child. Diapers, formula, clothing, baby food, nursery furniture, baby gear, toys, books, activities, day care, doctors’ visits, education—these expenses and many more will need to fit into your budget over the course of the next 18+ years. Without a doubt, it can feel overwhelming to financially prepare for an expanding family. Here are a few steps to help you ready your finances for parenthood.

First things first: relax!

Take a deep breath and focus on one thing at a time. If you have just found out that you or your significant other is expecting, you likely have at least seven to nine months to get things situated.

Evaluate your current money situation.

The first actionable step is to determine your spending “before kids.” The best way to do this is to take a very hard look at the first month after you find out that you’re expecting. In order to successfully track your “pre-baby” finances, spend like you normally would, but keep a diligent record of every penny spent. At the end of the month, you will be able to see your expenses, your income, and how much money you have left over. Take notes throughout the course of the month regarding any expense categories in which you may be able to cut back.

Estimate your baby’s first year expenses.

Once you have a good idea what your current monthly spending looks like, ask friends and family who have recently had a baby how much they spent preparing for baby and how much they spend monthly now that their baby has arrived. In a 2010 study completed by the USDA, they found that new parents spent an average of $12,000 on child-related expenses in the baby’s first year of life. This number (quite easily, in fact) breaks down to about $1,000 a month.

Keep in mind that expenses will be slightly different for each family due to variables like the cost of bottles and formula vs breastfeeding and the cost of childcare vs stay-at-home parenting. To get a breakdown of your first year expenses, you can use Baby Center’s First-Year Baby Costs Calculator. There are also expenses for things you don’t think about at first, like keeping your house warmer—and paying a higher heating bill—to accommodate a sensitive newborn. Your financial plan for your new baby isn’t meant to be exact; rather, it will give you an estimated idea of how much you can expect to spend.

Based on your above estimate, make a plan for your baby’s first year of life.

Now you have some decisions to make. No doubt you will realize that you are currently spending money on things that need to be cut or eliminated to make room for new expenses related to having a baby. But some of these decisions are bigger, and more emotional, than simply eating out less frequently or cutting entertainment costs.

For couples living on two incomes, deciding whether or not one spouse will stay home to care for the child can be an emotional as well as financial decision. Some parents may wish to stay home while their child is young but find that they will have trouble making ends meet on one income. Other parents may thrive on the sense of self they derive from their work life while simultaneously struggling with leaving their child in day care. Start planning for these challenging choices now so you aren’t burdened with them after the baby’s arrival – when emotions are high and you’re living on little sleep.

Look beyond the first year.

Beyond everyday expenses, there are a lot of longer range expenses to think about when you have a child. Believe it or not, as expensive as newborns are, kids actually tend to get more expensive as they age. And while new parents can find themselves already starting to worry about college expenses, the best thing you can do for long-range planning is to protect your family financially. This means getting life insurance and establishing a will or estate plan in the event of your untimely departure. Once those important decisions are made, you can begin saving for college and other future expenses. The sooner you start, the better your future position will be to help your child achieve their dreams.

Bringing a new life into the world is an overwhelming, emotional experience. The good news is there are steps you can take now to make it financially manageable. Understand your expenses, set a budget, and stick to it. Now is the perfect time to take the necessary steps to set your family up for financial success.

Common Causes of Debt and How to Avoid Them

nj debt relief attorney

Almost every household in the USA carries at least some debt. The simple explanation for debt is that you spend more money than you make, but there may be some less obvious factors that have contributed to your accumulation of debt. Taking the time to think about how you got into debt could help you avoid similar mistakes in the future. These are 6 of the most common causes of debt and how to avoid them:

1. Loss of Income

The sudden loss of a steady income can quickly lead to debt and financial troubles. You may be laid off, fired, or experience a decline in your personal business. You may need to take time away from work or leave the workforce completely to care for a child, an aging family member, or attend to your personal health needs. After the sudden loss of income, you may become overwhelmed by everyday expenses, and debt can easily build up.

One of the best ways to defend against this kind of debt is to build an emergency fund. In times of financial health, live below your means and put any extra money into savings. An emergency fund should be able to cover at least six months of expenses, so even if your income declines unexpectedly you will have the financial support you need to get back on your feet

2Medical Expenses

As one of the leading causes of bankruptcy in America, medical costs can easily push someone into debt totaling tens of thousands of dollars or more. With expensive treatments and high premiums, even those with health insurance can struggle with medical debt. When facing medical expenses, people will turn to savings or even credit cards to pay for their care. Since you can never predict what your health will be like in the future, it is best to take precautions now to prevent medical debt. Enroll in a good health insurance program. Even if paying for health insurance will cost you more now, trying to pay out of pocket for a medical emergency in the future could be financially devastating. You can also plan to include potential medical expenses in your emergency fund.

3. Expanding Families

The cost of raising a child is estimated to be around $250,000.00 from birth all the way through to adulthood. So, even if you feel you have plenty of extra money, having a kid can quickly change that. The new financial responsibility of raising a child can also be affected by the need for childcare. Paying for childcare can be so expensive that it can be cost prohibitive, causing some cases families to live on one income so one parent can stay home to care for the child(ren).

Whether you are a single-income or multiple-income home, the expenses of raising a child can quickly add up. Start saving before you have kids and prioritize saving throughout your child’s life. Prepare yourself by investigating the best childcare options for your specific financial situation before having children. Ideally, wait to have kids until your income will support adding a little one into the mix.

4. Divorce

A lot of financial changes take place after a divorce. With each person going from two incomes to one income and the added expenses of alimony, child support and legal fees, getting divorced can be very expensive. When facing divorce, it is important for couples to look critically at the financial impact of their decisions.

Often, the more amicable the split, the less likely it is that the divorce will have disastrous financial consequences for both people. If couples can agree to work together financially through a divorce, they can lower their legal costs and normally find more mutually agreeable results. Working through an arbitrator or divorce mediator can further save money on legal fees that accumulate when working within the court system. By working together, couples can come up with a solution that is financially best for everyone involved.

5. College Costs

For many young people today, crippling college debt has become the norm. Student loans add up quickly and sometimes recent graduates are not prepared to make the loan payments they accumulated getting their degree.

As a parent, you can help your future college graduate by starting to save for their college education as soon as possible. If you are student facing the expense of college alone, there are ways to reduce your student loan debts. Make smart choices about the schools you attend. Private schools may have the name or the prestige you think you need, but remember they offer the same degree that you will be getting from a state school. You also don’t have to start college right after high school or go to college full time. Working before and during college is a great way to offset expenses.

6. Lack of Insurance

Both in the case of individuals and businesses, not having adequate insurance can send people scrambling during an emergency. Home owners insurance, car insurance, and medical insurance can all make a huge difference when disaster strikes. Insurance is an essential aspect of financial planning. Take the time to understand your insurance policy. What does it cover? Would that coverage be enough to get you through an emergency? Being uninsured or under-insured can land you in huge debt if you are faced with a sudden unfortunate event.

 

It can be easy to fall into debt. Taking the time now to analyze your financial situation and plan for the future can reduce your risk of falling into the above debt traps. No two people have the same debt problem. At Veitengruber Law, we offer individualized debt management services to help you get back to financial health and security if you have occurred debt that you can’t seem to shake. We can also help you set up a plan to avoid accruing debt in the first place. Call us today at 732-852-7295 for your free debt management consultation!

Budgeting in Retirement: Living Well in Your Golden Years

budgeting in retirement

Having a well thought-out budget is the best way to start your retirement on the right foot. Retirees must plan to have a form of steady income and create a budget that fits their expected lifestyle. In retirement, financial priorities will change with your changing lifestyle. It can sometimes be hard to determine what kind of retirement budget is realistic until you have entered retirement. While some people overestimate their expenses in retirement, some people struggle to adapt to life on a fixed income. For these reasons, it is a good idea to revisit your budget several times a year.

Retirement involves a lot of big changes, but one of the biggest changes is how most people get paid. Instead of receiving a weekly or biweekly paycheck, retirees typically rely on income that pays out once a month. On top of this, many people find their monthly income reduced in retirement. It can be a big mental shift for people entering retirement to suddenly adjust to all of these changes. Sometimes the best way to adjust your budget in retirement is to go back to basics. Here is how you can take one month to monitor and analyze your retirement budget:

Throughout the month, keep all receipts, payment confirmations, and a tally of any cash spent. It is best to record these expenses daily so you do not accidentally leave something out. Use a spreadsheet, notebook, or app to track your expenses. In tracking spending for a month, you can get a good idea of where your money is going. At the end of the month, sort your expenses into categories: groceries, dining out, entertainment, phone, utilities, housing, insurance, transportation, etc. Be sure to factor in irregular expenses like holidays and birthdays. Your expenses in December are likely to be a lot different than your expenses in June, for instance.

Next, analyze the results. This analysis is meant to be a realistic assessment of your lifestyle as it relates to your spending and income. Where is your money going each month? If your monthly budget was based on your pre-retirement lifestyle, you may see some significant differences between your expected spending and your actual expenses. Maybe you spend less on transportation and entertainment, but you spend more on eating out and medical expenses. Pay attention to these shifts in spending and make sure you are adjusting your budget accordingly.

After you have identified the trends in your spending, figure out where you can cut expenses. Determine which expenses are needs (like bills, housing, transportation, etc.) and which expenses are wants (like entertainment, hobbies, and gifts). In retirement, your “needs” may change. While you may have needed two cars when you and your spouse were working, is this still a necessary expense? Are you eligible for discounts to your cell phone or insurance plan? While you want to make sure you cover your essential expenses first, finding ways to make cuts to necessary spending will give you more financial freedom in general.

Finally, it’s time to put all these insights into your finances to create a new plan for your budget. Identify five goals that make sense for your income and expected expenses. Goals help you align your budget with the intention of getting the most out of your income. Make your goals specific and give yourself deadlines. Find ways to keep yourself accountable. Sign up for auto-pay, use an envelope system to categorize your spending, or get your spouse or partner to join you in your strides to reach your goals. A budget is only as good as your ability to stick with it!

You can do this financial check-in every six months or whenever your budget seems to be spread too thin. Sticking to a budget will help you feel more secure and relaxed so you can enjoy your golden years. Get your finances back on track by taking a fresh look at your retirement budget as we move toward the New Year!

Cell Phone Resources for Senior Citizens

cell phones for seniors

With more and more people entering their senior years using cellphones for everything from keeping in touch with family to entertaining themselves with the latest games, figuring out how to budget for a cell phone is important for most seniors. With plans ranging from simple pay as you go flip phones to smart phones with unlimited data, there are a lot of options to choose from. Here are some tips for making sure you are getting the best deal for yourself or your loved one.

 

First, figure out what you really need. With so many different capabilities being offered on digital devices, it can get overwhelming to decide what kind of phone is right for you. Do you need the smart phone with GPS and apps? Or would your needs be met by a simpler flip phone for calls and texts only? Many companies have developed senior-friendly phones that include higher volume options, bigger buttons, and simpler menu screens to help seniors navigate their devices. If you still aren’t sure, ask the provider if you can take the phone model you are considering for a test drive. Make sure you choose a phone that works for you.

 

Many providers are now offering senior discounts and services geared specifically to their 65+ customers. AT&T’s Senior Nation Plan offers service for basic phones for seniors 65 and older. With their plan, you get 200 anytime minutes, unlimited calls to other AT&T customers, and 500 minutes for nights and weekends for $29.99 per month. Verizon’s Nationwide 65+ Plan includes 200 anytime minutes and pay as you go texting for $29.99 per month. You can add data to this plan for $10 for every 75MB. T-Mobile’s Pay As You Go Plan is perfect for seniors looking to use their cell phones for emergencies only, with plans starting at $3 per month for 30 minutes of calls or 30 texts.

 

Greatcall is a service geared towards helping seniors stay connected and independent through their mobile phone options. Their devices were made with seniors’ needs in mind. Their Jitterbug Smart2 smartphone offers a simplified menu screen and internet access while the Jitterbug Flip offers bigger buttons, a brighter screen, and a powerful speaker. All Jitterbug phones come with built-in support at the push of a button, connecting the user with 24/7 5-star urgent response agents. Greatcall services provide peace of mind for relatives and keep seniors connected. Their service plans start at just $19.99 per month.

 

If you are a low-income household, you may qualify for some additional discounts for cell phone service. Lifeline is a government funded program that helps low-income families get discounted internet or cell phone services. Lifeline can help get you connected with local providers that participate in the discount program. There is a limit of one discount per household and it can only be used for cell phone OR internet, but not both. Many big providers also offer low-income discounts. These services are not listed, though, so you will need to ask potential providers directly if they offer these programs and if you qualify.

 

A cell phone makes you instantly connected to family and friends, providing peace of mind and convenience. Choosing a cell-phone service is an individualized choice based on your needs and budget. Take the time to choose the service that is right for you or your loved one and don’t be afraid to shop around and compare prices for the best deal.

5 Mistakes to Avoid After NJ Bankruptcy

NJ bankruptcy

After your NJ bankruptcy, a common concern is how to re-establish your credit score. The real challenge is creating new financial habits so you don’t find yourself back in the same hole all over again. At Veitengruber Law, our holistic approach to financial health means our job doesn’t end after the bankruptcy is closed. We work with you to repair your credit and create healthier financial habits.

 

Top Mistakes to Avoid After a Bankruptcy Discharge:

 

1 – Ignoring your credit report

When rebuilding your credit subsequent to a bankruptcy discharge or reorganization, you will want to be very attentive to your credit report. Your creditors are supposed to report any discharged debts included in the bankruptcy to the credit bureaus. These reports should show a zero balance and include a note indicating the debt has been discharged. It is crucial to follow-up on this and ensure that all creditors are reporting to credit bureaus correctly. If discharged debt is being wrongly reported—as either a charge-off or an open account—late or missed payments can continue to show up on your credit. This can further damage your score and make it more difficult for you to get new credit.

2 – Applying for multiple new credit lines

It can be tempting after bankruptcy to rush out and apply for a gaggle of credit cards or loans in an attempt to quickly repair credit. However, it is important to give your credit score time to rebound before applying for new credit. The impact of a bankruptcy is strongest in the first year after filing, although it can stay on (and affect) your credit report for up to ten years. Instead of rushing into opening several credit lines at once, be patient and take the time to research your best options.

3 – Failing to read the fine print

When you do start applying for credit cards, it is important to remember that not all credit cards are created equally. Some credit cards will be more helpful to those rebuilding post-bankruptcy. A secured card, for instance, allows you to deposit cash as collateral up front to create a line of credit. That way, you are not able to charge more than your initial deposit. With any card you choose, it is important to read the fine print of your terms to make sure the card will work in your favor.

4 – Falling for credit repair scams

Many unethical “credit repair companies” make big promises about performing miracles to improve credit scores, but they rarely ever deliver the results promised. These companies rely on misinformation to scam those that don’t know much about how credit works. Some of their tactics may even be illegal. Keep in mind that if something seems too good to be true, it probably is.

5 – Making things too complicated

Ultimately, when it comes to rebuilding your credit after bankruptcy, you need to go back to the basics. What bad habits caused you to file for bankruptcy in the first place? An unflinching assessment of your spending habits will help you determine which factors led to the bankruptcy and determine where you need to make changes. Figure out what your credit-bingeing triggers are and work toward setting spending limits for yourself. Simple things like making on time payments, keeping debt to a minimum, and sticking to a healthy budget are excellent foundations of any financial strategy and will get you on the road to financial health quickly.

You’ve been through the hard-fought financial battle of bankruptcy and come out victorious on the other side. Now is the time to think positively about your financial future. Rebuilding your credit after bankruptcy takes time and patience, but you can use the knowledge and financial savvy you’ve learned along the way to move forward to a brighter future. Veitengruber Law is here to help. We are skilled in advising clients and creating easy-to-follow strategies to rebuild credit. Call for your free consultation today.

10 Easy Ways to Improve Your Finances

improve your finances

  1. Start saving
    It seems obvious, but many times it also seems impossible. By the time you pay your bills and have some spending money, every paycheck seems to fly out the window. The easiest way to save is to make sure you never have the chance to spend those funds in the first place. Most people have direct deposit these days; set up an automatic transfer of 10% of your net pay into a separate savings account each pay period. You won’t miss it, and it builds up pretty fast. When you get a raise, try redirecting the entire difference in your net pay over to savings. Your net pay will seem unaffected on your end, but your nest egg will grow that much quicker. You will be prepared for an unforeseen expense like an emergency car repair or for a “rainy day” when you want to take a long weekend out of town with friends.

 

  1. Make a budget – and be realistic
    Determine your starting point by keeping track of every dollar spent in a month. Now separate each expenditure into a category: utilities, housing, food (groceries), eating out, entertainment (movies, clubs, golf, etc.), childcare, transportation, car payment, and so on.Where are most of your discretionary funds going? See if there is anything you can cut back on or cut out altogether. If you have a wicked Starbucks habit, you might decide you can do without that daily grande latte after seeing that you are spending over $80 a month on coffee. Don’t want to quit your Starbucks habit cold turkey? How about only getting that latte once a week (say only on Fridays or Mondays) instead? Your $80 a month expense just went down to $16. You can’t decide to live on canned soup five days a week – you know it’s not going to happen, so don’t set yourself up for failure. Look at where your money has been going versus where you want it to go.

 

  1. Little changes can make a big difference
    As you saw, coffee can be a bigger expense than you realize. There are a lot of those little things that can suck money out of your wallet. Limit your dinners out each month. Make the transition less painful by allowing yourself one or two fancy dinners out, but eat at home the rest of the time. Pack your lunch. Join a carpool. Use a filtering pitcher, such as Brita ™, instead of buying bottled water. Feed a meter instead of using valet parking. Shop for clothes at consignment and second hand stores; you might even find higher quality items than in a big box store! Cigarette smokers spend hundreds of dollars a month on a product that they literally set on fire. That type of savings might make a lifestyle change a real incentive. It all adds up.

 

  1. Lower your existing monthly bills
    If you’ve always made payments on time, call your credit card company and see if they are willing to lower your interest rate. If you haven’t reviewed your cell phone plan in a year or more, it’s time to compare new deals and potentially cut your costs in half. Consider whether you really use that gym membership. If you barely go, it’s time to cancel it. Consider workout alternatives like YouTube videos or running groups. If a brick and mortar gym is where it’s at for you consider this; membership deals are generally better in the summer when everyone else would rather exercise outside. You could get those initiation fees waived or get a lower monthly rate.Shop for cheaper car insurance. Lower your electricity bill by using timers and power strips, and your water bill by checking for leaking faucets or toilets. Look into local weatherization programs that can troubleshoot conditions in your home to prevent wasting money on heating and air conditioning. Many times these programs are run by your utility company or local government and are free.

 

  1. Set goals
    Hard decisions are easier when you see the payoff at the end. Want to take vacation? Set up a retirement portfolio? Send your kid to college? Keep that in mind when you’re setting up your budget, or deciding if it’s really worth it to go to Olive Garden tonight, or if you really need yet another pair of black shoes.

 

  1. Check your credit reports
    The three major credit reporting agencies are Experian, TransUnion and Equifax. You are entitled to a free report annually or whenever you are denied credit directly from all three agencies. Look for mistakes and dispute them! This is even more important if you have a common name or share a name with someone else in your family. Check your credit report for bills you forgot about or never received. Maybe there’s an old bill from a dentist that got lost in the mail or never got forwarded when you moved. Even a small bill that went to collections stays on your report for 7 years after it is paid off. A low or lower credit score can mean increased interest rates or outright denial of credit when you need it most.

 

  1. Don’t pay full price – for anything
    Clip coupons; look for online deals, shop sales. Get discount codes from places like ebates.com, retailmenot.com, or slickdeals.net. Look for Deals of the Day on Amazon. Utilize discounts for services or experiences by using Groupon and Living Social.

 

  1. Change where you bank
    Many banks are rife with fees. Fees for less than a minimum balance. Fees for ATM use. Fees per check. Shop around, find a bank that values your business and doesn’t drain your account when you want to use your money. Veterans and business owners can often get even more perks, such as free certified checks or safety deposit boxes.

 

  1. Utilize employment benefits
    Your benefits package at work can offer a lot more than you think. Does your employer offer matching incentives for retirement account deposits? Flexible spending accounts? Free counseling or other wellness support programs? Take advantage of everything you can.

 

  1. Make sure you are financially informed
    Understanding basic concepts when it comes to investing, spending, saving, interest rates, etc. will benefit you (and your bank account) in the long run. Find out if your employer offers programs on these subjects, or seek them out yourself through online videos or books by consummate professionals in the field. If you have a personal accountant or financial planner, ask questions and ask for advice and heed it! You can’t make good choices if you don’t have the background information needed to make them.

How Financial Stress Affects Your Health

Would you be surprised if someone diagnosed your change of appetite, difficulty sleeping, and incessant headaches as symptoms of financial stress? It might be a hard pill to swallow, but your financial stress can have a tremendous impact on your health.  According to a survey published by the American Psychological Association in 2017, 62% of Americans reported being stressed about finances. Unbelievably, financial stress can cause companies upwards of $520,000 per year! You’re probably asking “why?”


Are you aware of the impact of stress on the human mind and body? You’re about to find out.


Financial stress, and many other kinds of stress, can have a negative impact on your health. There is a positive, temporary response to stress, and that is known as the “fight-or-flight” response. Preparing to run a race, giving a presentation, performing, and being involved in a dangerous situation are all examples of when your body is going to react with the “fight-or-flight” response, or adrenaline rush. Heart rate quickens, pupils dilate, brain functions heighten, and oxygen intake increases as your body reacts to the scenario. This is helpful in the short-term, but in the long run, on the other hand, it can become extremely harmful.

If these stressors are present over a long period of time, other health issues will manifest. Have you ever heard of heart disease? That’s a rhetorical question, since it’s the leading cause of death in the United States for both men and women. Guess what? Chronic stress is one of the main contributing factors to heart disease (along with a poor diet and lack of exercise). Not only is heart disease intensified by stress, but migraines, sexual dysfunction, asthma, gastrointestinal issues, high blood pressure, diabetes, general pain, stomach ulcers and many other health complications are also correlated with stress – money worries in particular.

We know that when you’re stressed, you’re more likely to make decisions that aren’t always the best. But when you accidentally, or purposefully, make a choice that ends up being detrimental, stress will follow. For example, the fear of not being able to pay next month’s mortgage bill can initiate symptoms of depression or PTSD. In turn, this can lead to even more issues with budgeting and over-spending (like racking up your credit card balance to make yourself “feel better”), which only exacerbates symptoms.

In the same way that stress exacerbates physical issues, it can also aggravate psychological problems such as anxiety, sleep disorders, depression, anger issues, and hopelessness. About 10% of high-earning individuals experience 2 to 3 indicators of depression, in comparison with 23% of low-earning individuals. Pair together financial stress and depression, and you’ve got a crippling combination. It definitely isn’t a recipe for productive and satisfied employees. Each day it seems that employee health is worsening, so it’s crucial that employees, managers, and health care professionals work to decrease stress levels and improve coping skills.

Although many of us brush off money worries, the physiological effects actually make sense. How can your body thrive if it’s constantly being beaten down with the incessant worry of money troubles? Simply put: it can’t. The physiological response of the body to stress is so immense that physical and mental health quickly begins to suffer. The lower classes of America undoubtedly experience the effects of financial stress, but studies show that financial worries also plague middle and upper class individuals.

In the United States, approximately 75 to 90% of all doctor’s visits are stress-related medical issues according to The Journal of the American Osteopathic Association. We know that stress causes plenty of medical issues, but some of that can be attributed to unhealthy coping skills. When people are stressed, they tend to resort to unhealthy coping behaviors such as overeating, overconsumption of alcohol, etc., which only worsens other medical problems. Stress management techniques such as exercise, deep breathing, and meditation are all effective ways to lower stress levels.

The heaviness of financial stress can weigh you down, but it’s important that you and those around you find successful ways to decrease stress levels and develop helpful coping skills. Lifting such a weighty burden requires intelligent money management and more important, stress management.

How To: Overcome Financial Stress and Get Your Finances in Order

Before the Great Recession, financial stress was the number one worry of over 70% of Americans. Since the Great Recession, money issues have become increasingly depressing for some people. With the loss of a job or a decrease in income, many people can have a prolonged stress that sits like a ton of bricks upon their shoulders. This chronic financial stress is extremely detrimental to the body, and you will begin to affect the lives of those around you. Before you know it, you may start to rely on bad habits to relieve your stress. How can you get a foot in the door of overcoming your financial stress and straightening out your money matters? Well, it obviously doesn’t happen overnight, but if you keep reading, you may gain some insight as to how you can begin.

Setting Goals. 

Though you can’t control all of your circumstances, you can initiate steps towards improving them. One of the most important first steps is setting a goal. This might sound simple, but that’s because it is! Before you can even think about your goals, you need to take a step back and review your finances. Doing this on a monthly basis could be beneficial for you, and don’t forget to check out your budget to know where exactly your money is being delegated.

Once you’ve had a chance to look over and get really familiar with your debts and income, set some goals. We are always setting goals in life – (financial, fitness, education, etc) and this goal is just like the others. It should have a purpose and a particular plan of action that will help you to attain the goal. Rather than setting a broad goal, attempt to set specific goals. Maybe your goal is to have $5,000 in your bank account within the next 2 months. You can break that broad goal down into smaller goals, like making yourself more valuable to your employer or improving your business plan. No matter the goal, review your financial state, set a goal, and clearly define the parameters and steps needed to reach it.

Make it measureable.

As covered in the last paragraph, clearly defined goals will be of more benefit. A goal such as “having a lot of money” does not have clear parameters. Some financial professionals suggest keeping 3-6 months of expenses in your bank account. Rather than setting a goal of “I want to always have 6 months of expenses in my account, sit down and put an actual value to that 6-month amount. This will focus your mind on a specific number instead of a vague sum.

Realistic and Reachable.

When you are setting your goal, it’s crucial to ensure that it’s one that you can actually attain. If you don’t have a good chance of reaching the goal, what was the point in setting it? Since you’ve already reviewed your finances and budget, you know whether or not a goal is realistic. If the goal is realistic, in your mind, you know that it’s attainable. Maybe your goal is adding $500 to your savings account each month. If you’re currently struggling to pay rent and have a low income, that goal may be a little out of reach. Work with what you have.

Deadline.

If you have no time limit on your goal, it might take you forever to reach it, which in turn makes setting the goal a waste of time. Part of defining a goal is listing a deadline so that you are able to separate your one big goal up into smaller chunks. Focusing on reaching your goal week to week can be mentally easier than seeing a huge number in front of you and stressing about how to climb that mountain.

Financial stress can take a toll on your mental, physical, and emotional state, which is why it’s so crucial to alleviate at least a small portion of that worry. Now that you have a few pieces of advice on how to overcome your financial stress, don’t wait until you find yourself in a desperate financial state. If you aren’t sure how to go about everything on your own, don’t hesitate to get in contact with a professional debt resolution/credit repair expert. They will be able to help you in setting a proper budget as well as raising your credit score and negotiating with any creditors to whom you may owe outstanding payments.

When to Break Up With Your Financial Advisor

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An important indicator of your overall financial wellness is how well you balance spending with saving and investing. You should always keep the end game (retirement) in view while simultaneously being able to enjoy life while saving for your children’s college education, if applicable. In order to coordinate all of the pieces of your financial puzzle most effectively, many people choose to work with a financial advisor.

Unlike many other professional partnerships you may form, your relationship with your financial advisor or financial planner can become more like a friendship. Because many people stay with the same financial planner for years, you can easily feel connected on more than a professional level. This feeling increases if you are also in the same circle of friends or live in the same town.

No matter how much you enjoy the company of your financial planner, if your needs simply aren’t being met, you have some decisions to make. You’ll either have to explain to your advisor exactly how he’s letting you down and what he can change to retain your business, or you can start looking around for someone new.

Reasons to consider leaving your financial planner:

  • Distrust – Being able to trust your financial advisor with your money is extremely important. If you’re asking questions and not getting answers that feel authentic, that’s a red flag.
  • Poor communication – While it’s true that financial planners are often very busy, if your phone calls and emails go unanswered for lengthy time periods, you’re paying for a service that’s sub-par.
  • Unclear expectations – The best financial advisors will lay out a plan when you first team up with them. The plan should include input from you regarding your specific goals for your assets and what you’d like to see happen. If your advisor never created an investment policy statement for you – it could signal that he’s skimping on his other duties as well.
  • No contract – As with any professional who provides you with a service that you will be paying for, your financial planner should present you with a clear contract at the beginning of your relationship that outlines his duties to you and what he needs from you as well. Without a contract, you have no way of knowing what to expect.
  • Distance – If you’ve been working with a financial advisor from afar and have recently decided to take a more active role in your finances, letting go may be your only option.
  • No fiduciary standard of care – In other words, if your advisor (or his firm) doesn’t put your interests ahead of their own, you have a very good reason for finding a new firm.
  • Fees – If you’re currently unhappy with your advisor’s fee structure and this is set by his firm, you may not be able to get the arrangement you’re looking for without finding someone new.
  • Additional services – Many people today are interested in working with a financial advisor who goes above and beyond making sound investments for them. Tax planning and basic budgeting advice are two services cited by clients who were unhappy with their current financial planning firm.

At Veitengruber Law, we pride ourselves on our vast network of professionals and we attend networking meetings every month to stay immersed in the financial, legal and real estate markets. We are more than happy to assist you in finding the NJ financial advisor that meets your needs. Give us a quick call [(732) 852-7295], or fill out the contact request form on our website. We’re always here to help!

Image credit: Nicolas Raymond