Budget Divas

Mastering Your Money Mindset: Overcoming Budgeting and Income Anxiety

November 10, 2023 Jenn Trinidad Episode 77
Budget Divas
Mastering Your Money Mindset: Overcoming Budgeting and Income Anxiety
Show Notes Transcript

Ep #77: Today, I want to dive into something that often gets overshadowed in our debt-free journeys—budgeting anxiety and income anxiety. Many believe that once you're debt-free, life becomes a breeze, all rainbows and sunshine. But the reality is, the worry about financial stability doesn't just vanish. Let's break down what budgeting anxiety and income anxiety really mean.

It's that uneasy feeling when you're juggling personal finances, stressed about expenses, fearing you won't meet financial goals, or overwhelmed by the complexity of budgeting. On the flip side, income anxiety is the stress tied to the amount and stability of your earnings. It could be the fear of job security, the unpredictability of gig work, or simply not earning enough to cover your essential expenses.

Even though my husband and I have been budgeting for ages, have our emergency fund, and all the financial foundations, the worry about tomorrow still lingers. And that's what I want to dig into today because stressing about financial stability, especially in this unpredictable world, is totally relatable.

We see people flaunting their fancy lifestyles, but behind those snapshots, we're clueless about their actual financial situation. So, how do we navigate this anxiety and still find happiness without constantly fearing the worst?

First things first, we need to acknowledge and understand these anxieties. You're not alone. Once you pinpoint the sources, you can tackle them head-on. Now, when I'm stressed about money, I don't immediately slash my budget. Instead, I make a list of things in my budget that genuinely make me happy—the "spark joy" list.

It's liberating because it helps me decide what stays and what goes without feeling deprived. And let me tell you, extreme frugality like turning underwear inside out or reusing cloth toilet paper isn't my style. So, no, I won't be doing that. Instead, I focus on practical strategies.

One key tip: make a "not right now" list. Sure, say no to some things, but if you keep saying no without a "not right now" list, you might end up stressed with nothing left that brings you joy.

Another crucial move is building your emergency fund. I'm a big fan of Ally Bank—great for setting up multiple buckets for different goals. Start small and gradually increase your emergency fund over time.

Now, let's tackle income anxiety and diversify. Having multiple sources of income brings security. It could be freelancing, a side hustle, or investments generating passive income. I often talk about mystery shopping, but it could be anything that fits your lifestyle.

Keep building your skills. Stay adaptable in this rapidly changing job market. Continuous learning and staying updated with industry trends enhance your employability, reducing income anxiety.

Lastly, seek support. Whether it's a financial advisor, a community like Budget Divas, or attending financial literacy workshops—having a support system makes a significant difference in managing budgeting and income anxiety.

Overcoming these anxieties is a journey. It's okay to seek help along the way. Until next time, keep moving forward, Budget Di

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You are listening to the Budget Divas Podcast with your host, Jen Trinidad. In this podcast, we discuss real life money strategies that you can implement without sacrificing your social life or living on a beans and rice budget. It is possible to live happily while on a debt free journey and enjoy the shiny objects in life.

Welcome to another episode of the Budget Divas Podcast. I am your host, Jen Trinidad. It's so great to be back with you. As of this recording, It's November. We have a little over a month left until Christmas and I wanted to talk about budgeting anxiety and income anxiety. Most people think that once they are fully out of debt and they don't have any more debt and payments running over their head.

It's like they've hit their destination and everything is free flowing and life is gonna be hunky dory and sunshine and rainbows all the time, but that's simply not true. Before we get into it, let's define what budgeting anxiety and income anxiety actually mean. So, budgeting anxiety comes in the form of stress or uneasiness that arises when managing and planning personal finances.

This could be due to your expenses, fear of not meeting financial goals, or feeling overwhelmed by the complexity of budgeting. Income Anxiety On the other hand is the worry and stress associated with the amount and stability of one's income, and this may stem from concerns about job security, the unpredictability of freelancer gig work, or simply not earning enough to cover financial essential expenses.

Now, even though my husband and I have been budgeting for quite some time. We have an emergency fund. We have the financial things that are set up, our financial foundations. It doesn't mean that we still don't worry about tomorrow. And that's what I wanted to talk about today, because it can be super stressful if you're worried about financial stability, not knowing what's going to happen tomorrow.

In the past three years, we have seen so many things happening around us with industries collapsing, job financial security. No more. And just the like of what is happening around us brings up a lot of anxiety and insecurity, you know, a lot of it has to do with the fear of the unknown. And when we're unsure about our financial situation or lack of clear plan, it's natural to feel anxious.

Societal pressures and comparisons can also contribute to these anxieties. Seeing others seemingly effortlessly managing their finances can create a sense of inadequacy. And I blame it on social media. Because social media, we see everything that people want us to see their fancy cars, their lavish lifestyles, their fancy houses, going out to eat all the time, taking all of these wonderful vacations.

But deep down, we don't know what their finances are like. So I wanted to talk about that today, because how do we manage that anxiety? and still be happy while not always worrying about the other shoe to drop. So how can we overcome budgeting and income anxiety? Well, the first step is to acknowledge and understand these anxieties.

It's essential to recognize that you're not alone in facing these challenges. And once you've identified the sources of your anxiety, you can begin to address them more effectively. Now, whenever I feel stressed about money, the first thing I do is not go straight into doing my budget and cutting.

Everything that I absolutely don't need. Let's talk about some practical strategies to overcome budgeting anxiety. In our society, it tells us to cut out every single little thing that we absolutely don't need. In fact, this morning, I was reading an article about extreme frugal tips. And some of those tips on that list, I would not even do.

So, like, turning your... Underwear inside out so that you don't have to wash it so that you can reuse it again. Or other things like reusing cloth toilet paper. I mean, for some people, that might be extremely frugal and extremely. Economical, but that's just not for me. So the first thing that I do when I feel anxious and stress is not to go straight to my budget and start cutting out everything that I feel that we don't need.

But it's to make a list of things in my budget that actually make me happy. So my spark joy list, and when I make this list, it actually gives me freedom because I know exactly what I want to keep in my budget. The next column are things that I don't need. This is my no budget. Maybe I don't need a gym membership at the moment because I can walk outside, I can do some YouTube videos to get in shape, or something like cable.

We have not paid for cable in years and don't miss it because we have The streaming devices, and then the next list that I make is the not right now list, and I think this is the most important list because if you keep making no list and saying no, no, no, no, no, and putting it out of your budget. By the time you know it, you'll be so stressed because there's nothing left.

There's nothing left that brings you joy, that sparks joy for you. So if you make that yes list, things that you absolutely want to keep in your budget, but also make a list that says, not right now because there are some financial goals that I want to meet first before I spend more money. I'll give you a real life example.

So I have a 2018 Toyota Corolla that's in perfectly good shape. It's 100 percent paid off. It's a good car, but it's a small car, and yes, I want an SUV. I want a bigger car that has more power, has more space, but right now, it's on my not right now list because there are things in my life, in my financial plan, that I want to achieve first.

There are financial goals that I'm putting ahead. Before buying a new vehicle and being that we just bought a new house in the beginning of this year. I'm prioritizing that 1st to make sure that we are rebuilding. Our emergency fund because a lot of our money, a lot of our savings went to the down payment for this house and then to make sure that we have a good enough nest egg for any emergencies that come up.

So by putting it on my. Not right now list. It still gives me hope that yes, I will get that new car that I want in the future, but just not right now, so it eliminates the stress. It actually gives me freedom and control because I know that I'm making the right decision. For my finances at this moment.

Okay, so that is the first tip to make sure that you have a pen and paper handy Write down your list of yeses your must haves your No list. What can you? Live without and don't really need in this point of your life And then you're not right now list. One of the things on my yes list is to get manicures and pedicures because I'm constantly on my feet.

I'm constantly running around doing things. I'm constantly working with my hands, so I want to make sure that I, it's presentable, that I get a nice pedicure and manicure, and it really makes me happy. And the other thing that's on my no list is buying Christmas decor. Now like I said, we just moved into this house, so my First instinct was I wanted to buy the most beautiful Christmas Pinterest worthy decorations.

But I told myself this year, maybe I'll buy one or two noteworthy decorations, but I'm going to wait until after Christmas when it's on sale, when it's at that 50, 60, 70 percent off to buy those decorations at a heavily discounted price and to save it for next year. And that will make me even more happier when I'm able to decorate it, knowing that it didn't ruin my finances.

So buying Christmas decor at the moment, it's on my no list. I may change my mind in a month or so to get maybe one or two noteworthy decorations that I can place around the house. But for now, it's not on my yes list. And it's not even. Something that I want to focus on in this period of life. The second thing to address budgeting anxiety and income anxiety is to build your emergency fund.

I always talk about on this podcast that I love Ally Bank. L. A. Bank is my favorite place to save money because it allows you to have one account, but you can have up to 10 different buckets. So, what's coming up soon is Christmas. And even though we are, um, Month and a half away from Christmas, there is still lots of time to be doing some side hustles and to be saving that money to spend in the next few weeks or so for Christmas.

Another thing that we would want to save for right now are taxes. If you're self employed, if you have a Side gig, it's great to be setting up that account now, so that when taxes are due, You'll have the money saved in your account, and you don't even have to worry about it. Having that financial safety net can significantly alleviate budgeting anxiety.

So start small and gradually increase your emergency fund over time. You know, one of the things that we did when we first started our debt free journey was we made sure that we had our baby emergency fund. If you've ever heard Dave Ramsey talk about it, he always talks about having a baby starter emergency fund.

But we knew that 1, 000 wasn't enough to cover all of our emergencies. So even though we didn't want to make our emergency fund, you know, tens of thousands of dollars down the line, we at least made sure that we were saving a little bit. Of money to increase that emergency fund over time. Now let's talk about income anxiety and consider diversifying your income streams.

In today's gig economy, having multiple sources of income can provide a sense of security. This could include freelancing, a side hustle, or investments that generate passive income. On this podcast, I talk a lot about mystery shopping because it is my favorite side hustle. But whether you decide to become a mystery shopper, or you uber or have any other type of side gig be sure that you have at least one side gig and more if you can if you are working just a regular nine to five job You probably know that is not enough in today's world.

We are being hit with inflation. Grocery prices are out of this world. You know, I went to the store the other day and a loaf of bread was 10. I couldn't believe it was like 10 when it used to be 5 just a couple of years ago. So, do you have a regular 9 to 5 job? Your earnings could be even more when you have a side hustle and it doesn't even have to be a side hustle that takes a ton of time.

You could just be doing it one or two days a week. But even if you're doing it one or two days a week and making an extra 500 a month, that is totally going to be worth it when you go to pay off your debt or you put that into an emergency fund. Think about it. If you're doing 500 a month in side hustle money over the course of a year, that's 6, 000 more in your bank account than you had if you didn't.

Now, do you have to pay taxes? Of course. But that's going to be a lot more money than if you didn't do anything at all. The next tip to overcome income anxiety and budgeting anxiety is to keep building your skills and staying adaptable in the rapidly changing job market. Continuously learning and staying up to date with industry trends can enhance your employability and reduce anxiety and income stability.

You know, as a recruiter for a large organization, I know the importance of Keeping up with industry trends and making sure that you're always going to be marketable. And there are so many ways to take advantage of your company's education reimbursement. Sometimes these companies reimburse thousands of dollars per year for you to go to learn a new skill, attend conferences, and these are marketable skills that will make you become an even Better employee, or if you're looking for a new job, those marketable skills might be a huge increase to you down the line, you know, my friend Patricia Ortega, who has the uncommon career website, she coaches people on how to get to the next level on how to be the best marketable applicant They can be so that they can get a better salary pay rate.

They can get that promotion. Imagine if you had an extra 30 to 50, 000 even, or maybe even 100, 000 in your salary, because your skills and experience are up to date and you're being marketable to employers out there. How big would that be on your finances? So there are so many ways that you can look up YouTube videos online to make yourself marketable, but start by even just asking your employer what types of organizations would they pay for for you to go to trade schools, to go to conferences, to take those necessary skills and experiences So that you can be the best employee for them, right?

So the last way to avoid budgeting anxiety and income anxiety is to just seek support, whether you're talking to a financial advisor, joining a community of like minded individuals, like the budget divas community, which is attending workshops on financial literacy. Having a support system can make a significant difference in managing budgeting and income anxiety.

For example, when my husband and I were getting out of debt, we did not want to parade and tell everybody what we were doing, but we invested. Our time and our resources to a few programs that we knew would help us long term. We also talk to friends who we trusted, friends who were older than us, who, you know, could be like our parents or grandparents and ask them for.

financial education and tips on how we could get out of debt, what we should be doing with our finances, the investments that we needed to make so, so that we could get out of debt faster. And let me just say that the best investment you can make is within yourself. Because we have all learned in the past three years that we cannot rely on industries that we think are going to be around forever.

We have seen the airline industry go down, the construction industry, all of the industries that were hit during the pandemic. You know, we can't make sure that these are Jobs that are going to be around for a really, really long time. So if you invest in yourself and take some classes, make sure you're marketable to other companies.

And even if you wanted to start your own business. You'll be sure that you overcome that budgeting and income anxiety. That wraps up today's episode of the budget divas podcast on how to handle budgeting and income anxiety. Remember overcoming budgeting and income anxiety is a journey and it's okay to seek help along the way.

I hope the tips I provided today will guide you towards a more confident and my mindful financial future. Join me next time for more insights into the world where money and mindfulness meet. Until then, keep moving forward one step at a time.