Beating Broke

Personal Finance from the Broke Perspective

How to Get More Financial Peace of Mind

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Financial Peace of Mind

Money troubles kill relationships. They also cause major stresses, catalyze health problems, ruin plans, mess up sleep schedules, and so much more. We hate to admit it, but money is easy to worry about, and many of us do it a lot. What’s more, there is good reason to worry about money. Without enough of it, we can’t live where we want, eat what we want, get educated, have a fun time out of the house. Like it or not, your sense of well-being has much to do with how much money you have and how you use it. So here are a few ways to get more financial peace of mind.

Life Insurance

Perhaps the best way to get peace of mind in your financial life is to buy life insurance. If you’ve never thought about buying life insurance before, you probably don’t realize how inexpensive it can be. Many people find that life insurance quotes are much lower than they anticipated, especially for people who are young and healthy. Life insurance creates peace of mind not just for you, but for the people who depend on your for income and security. If you find that you no longer need a life insurance policy, you can consider selling your life insurance policy for cash once you reach a certain age to help support your family or health expenses.

Know Where Your Money Goes

If you’ve ever made a budget after a long period of not paying attention to your money, you know how much it hurts. You  may feel like your spending record is judging you, so some people avoid budgeting at all costs. But the only way to spend money more wisely is to take a close look at how you need to spend, and how you actually spend in practice. Often there is too much difference between these two , and you should find a way to spend your money according to better measures and goals.

Get an Emergency Fund

Financial Peace of Mind
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Building an emergency fund and contributing to it regularly is one of the most important financial habits you’ll ever create. An emergency fund will help protect you in the event of an accident, a breakdown, and any number of unexpected expenses. It takes awhile to build an emergency fund large enough to cover you and your family for six months (the oft-recommended amount).  However, once you’ve managed to build it, you’ll find it’s worth it. An emergency fund provides great peace of mind because you know you have a safety net.  Plus, to create one you have to be financially responsbile and disciplined.

Final Thoughts

There are many ways to live beneath your means and acquire better financial peace of mind. We lose our cool financially when our money is out of control. Learn the basic ropes of personal finance, spend time caring for your own financial garden, and you may be surprised at the extent to which it improves your life. People don’t feel secure when their means of sustenance and shelter are constantly in upheaval. When you have financial security, you are very likely to have physical security, which can only have a positive impact on your state of mind.

Read More

When Do You No Longer Need Life Insurance?

Finding Low-Cost Term Life Insurance

Realized Benefits of Emergency Funds

What the Pandemic Has Taught Me About Our Spending

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The pandemic has changed our American way of life.  More people work from home now.  Kids go online to complete their schooling. Many of us are wearing masks now.  And, our month or two quarantined at home has given us time to reflect on what are life used to be like. . .and whether or not we want to fully go back to that life.  I’ve spent some time considering what the pandemic has taught me about our spending.

What the Pandemic Has Taught Me About Our Spending

What the Pandemic Has Taught Me About Our Spending

Sometimes you get complacent in life and just do things the way that you’ve always done them.  This pandemic has allowed me to look at our finances with fresh eyes to discover what we did well and what needs improvement.

My Bargain Shopping Was a Boon to the Family

What The Pandemic Has Taught Me About Our Spending
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I used to drop by the grocery store three or four times a week, scouring the store for clearance mark downs.  I bought probably 1/3 to ½ of our weekly food this way.  I used to worry that I was spending too much money shopping this way, but now I see how much I was really saving us.

Since the pandemic, I’ve relied on grocery store pick up, which means paying full price for everything.  Our grocery bill has shot up by 30%.  When the pandemic is over, you can bet I’ll be back to stopping by the store a few times a week to pick up the bargains.

We Drove Around Way Too Much

What The Pandemic Has Taught Me About Our Spending

Before the pandemic, we were a busy family with three kids.  We spent our time, like many American families, in the car driving from activity to activity.  Gas was a large line item in our budget, especially since our town is very spread out.  We easily spent 2 to 2.5 hours in the car a day, dropping off and picking up a child from school, taking another child to therapy, going to horseback riding lessons, gymnastics lessons, religious education lessons.  On and on.

Since the pandemic, our gas consumption has dropped to nearly nothing.  I’ve bought gas for my vehicle twice in three months; my husband hasn’t had to buy gas at all.  We find we’re happier with more time at home.  Whenever things are more normal, we don’t plan to be as busy, which means less gas consumption.

Our Emergency Fund Is Not Large Enough

We’ve been working on building our emergency fund from a tiny $1,000 to a six-month emergency fund.  When the pandemic hit in mid-March, we had a two-month emergency fund.  While that’s certainly better than a $1,000 emergency fund, I really wish it was larger.

We’re lucky that my husband was able to keep his job and work from home, but he did get a pay cut.  While we have rearranged the budget to accommodate the pay cut, we won’t be able to grow our emergency fund like we had previously.  And, depending on the way this pandemic rides out, we’re both aware that he could lose his job next year.  I’d feel much more confident if we had a bigger cushion.

Final Thoughts

These three are what the pandemic has taught me about our spending.  I’m quite sure when this pandemic is over, our family won’t go back to the way things were.  I think we’ll drive a little less and try to save even more.

How has the pandemic changed the way you look at and spend money?

Dell Pauses Employee Benefits to Cut Costs

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As the COVID-19 crises continues around the world, the United States continues to see economic fallout.  While restaurants, bars, gyms, and other service sector employees had to layoff employees during the early days of the pandemic, now, many white-collar employees are also feeling the pinch.  Many universities have had to furlough employees, and recently, even the computer industry is taking significant cost cutting measures.  Specifically, Dell pauses employee benefits to cut costs.

Dell Pauses Employee Benefits to Cut Costs

The Cuts Dell Is Making

Beginning June 1st, Dell is making cuts to several of their many employee benefits.

Retirement Contributions

Dell will not be contributing to their employees’ retirement funds for at least the remainder of the fiscal year.  (Dell’s current fiscal year ends on January 29, 2021.)

Dell typically matches the employees’ 4% retirement contribution the first year of employment, then bumps that amount to 5% the second year, and 6% the third year of employment or up to a $7,500 a year match.

However, in an effort to preserve cash, Dell will temporarily halt this benefit.

Internal Promotions and Raises

Dell Pauses Employment Benefits to Cut Costs
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Also beginning June 1st, Dell will temporarily stop internal promotions and raises.  Once again, these actions are expected to last at least through the end of the fiscal year.

Employee Incentives

Dell has an internal employee incentive program where employees can earn “inspire points” that they also paused.  With this program, employees receive commendations from bosses and colleagues and can use the points to buy gift cards and other items.

The Cuts Dell Has Not Had to Make

While Dell is signaling that they are proactively protecting their cash with these cuts, there are some significant measures they have chosen NOT to take.

No Furloughs

Unlike many companies, Dell is currently NOT furloughing employees.  All employees have kept their jobs.

No Pay Cuts

Many companies and industries, such as higher education, have had to cut their employees’ pay.  Thus far, Dell is avoiding that.  While employees won’t be eligible for promotions or raises for at least the next seven months, they are not, so far, getting their pay reduced.

Employees Aren’t Alone

Dell pauses employee benefits to cut costs isn’t the first cost-cutting measure implemented by the company.  Effective the second quarter, which began May 2, 2020, Dell Technologies CEO, Michael Dell, forfeited his base pay, estimated to be approximately $950,000 per year.

Dell and his wife also have donated $100 million to coronavirus relief.

Take Aways from Dell Pauses Employee Benefits to Cut Costs

Dell is just the latest of many white-collar companies that have faced decreased revenue thanks to the COVID-19 pandemic.  As a result, Dell employees must make some sacrifices to keep the company in good financial standing.

If your company has not been affected yet, be prepared financially.  Likely before this pandemic is over, your company (and your pay) will be affected.  Take the time now to make your budget leaner.  Also, now is a good time to forego unnecessary spending and funnel more money to your emergency fund.

As a nation, as a world, we will pass through this time of difficulty, but it likely won’t be as soon as we would like.