Practical Solutions to Money Problems
If you read this blog even semi-regularly, you probably know that I tend to tackle the bigger financial stuff: Paying down debt, creating and sticking to a budget, saving for retirement, and so on. But there’s more to finance than responsible credit card use and having an emergency fund. During a typical week, you’re probably faced with dozens of small money-related issues. While most of these issues aren’t exactly major financial emergencies, when you put them all together they can be stressful, annoying, and occasionally overwhelming.
That’s why I decided to dedicate this post to some of the most common smallish-but-disruptive money-related issues – and ways to deal with them. Keep reading for a few easy ways to deal with everyday financial issues.
The problem: You have a tendency to overspend. This is one of those “small” issues with the potential to become huge. In the short term, overspending – whether it’s a few extras at the grocery store or a spur-of-the-moment mall marathon – can wreak havoc on your finances. After all, it’s hard to stick to a budget or build up an emergency fund if you keep spending money on random and unnecessary purchases. Even worse, overspending often goes hand-in-hand with debt.
The solution: Think about your overspending. Do you tend to shop more when you’re stressed out? Do you typically spend more than you planned when you go to the grocery store? Do you find that you go to Target for a $12 family-size pack of toilet paper and walk out with $250 worth of knickknacks?
Once you figure out why and how you overspend, you can take steps to curb it before it happens. If you hit the stores when you feel stressed, try going for a long walk instead. If you tend to overfill your grocery cart, make a pledge that for the next month, you won’t go shopping without a list – and that if something isn’t on your list, it won’t get into your cart. Also: Take exactly as much cash as you need to buy the items on your list, and leave your credit cards at home to avoid temptation.
The problem: Your bills are all due at once – and it makes budgeting difficult. This is a pretty common issue. Let’s say you get paid on the 5th and the 20th of each month. For some reason, your bills – your utilities, car payment (if you have one), credit card payments, and so on – are all due on the 7th. You end up using nearly all of your first paycheck to cover bills – and you end up dipping into savings (or even worse, using your credit cards!) to pay for day-to-day expenses until your next check.
The solution: First of all, I strongly recommend that you create a budget so you’re not blindsided by bills every month (if you need a few creative budget ideas, you can find some here and here). In addition, call a few of your service providers and ask to change your due dates. You might feel less overwhelmed if your bills are spaced out a bit more.
The problem: You get too many unsolicited credit card offers. Let’s face it: Nobody likes those “pre-approved,” “just for you” offers – they’re annoying and they typically go right to the trash can, unopened.
The solution: Opt out. To get started, visit OptOutPrescreen.com or DMAchoice.org. When you register on these sites, you can opt out of receiving certain types of unsolicited junk mail, such as “pre-approved” credit card offers. You can also send a written opt-out request to each of the major credit reporting bureaus (for more information and for the mailing addresses of the credit reporting bureaus, visit the Federal Trade Commission’s Consumer Information page).
The problem: You feel overwhelmed by debt. Debt is stressful. If you’re struggling to pay down piles of high-interest credit card debt, it’s easy to feel overwhelmed. What do you do when you feel like there’s no end in sight?
The solution: That depends. If you’re past due and drowning in late fees, I recommend that you call your credit card company immediately. Try to work out a payment plan and see what you can do about getting caught up (for a more complete look at catching up on past-due cards, check out this article). On the other hand, if you’re trying to get a handle on your debt before it spirals out of control, consider using a debt-repayment strategy such as the snowball method or the snowflake method.
No matter what the situation, though, you should stop using your credit cards until you get your debt situation under control. And whatever you do, don’t use any of these debt-repayment strategies.
The problem: You just got a medical bill – and it’s full of errors. Few things in life are as frustrating as opening a medical bill and finding mistakes. Double charges. Overcharges. Charges for procedures you’re pretty sure that you didn’t even have. What do you do about it?
The solution: The first thing to do is call your insurance provider and talk to someone in billing or customer service. Explain the problem. Be polite. You may find that this alone is enough to set things right again. If that doesn’t solve the problem, you may have to dispute the charge in writing (check with your insurer or your company’s HR staff to find out how to get started). Until the situation is resolved, remember to document everything and keep copies of all correspondence – just in case.
The problem: You don’t know how long to hang onto receipts. You heard it was a good idea to hang on to your receipts, and you’re concerned about fraud/identity theft/taxes, etc. As a result, things are getting out of hand, storage-wise — but you don’t know when or how to dispose of them.
The solution: Keep receipts for business expenses (for tax purposes), medical bills (see the medical billing error problem above), and big-ticket purchases (for warranty purposes). You may want to keep receipts for smaller purchases (clothing, small appliances, and so on) for a few days after purchase just in case they’re defective or you change your mind. Aside from that, there’s no real reason to hoard receipts. If you’re concerned about identity theft or fraud, invest in a small shredder. Once a week, take all of your non-essential receipts and shred ‘em.
So, there you have it, some practical solutions to money problems. A few simple ways to stress less about day-to-day financial concerns. By making an effort to tackle a few of these head-on, you’ll save yourself – and your finances – a lot of time and trouble in the long run.