#StayWoke: How to Keep Money Problems From Keeping You Awake at Night
Are you tossing and turning thinking about your bills? Losing sleep over mounting student loan or credit card debt? If so, you’re not alone.
According to a CreditCards.com national survey, sixty-five percent of respondents admitted to losing sleep over money problems, a level of financial insomnia not seen since the Great Recession.
At the the top of our financial worry list, – healthcare and insurance bills with 38% of us loosing sleep over this issue. Lack of retirement savings, paying for college, and dealing with credit card debt also ranked high as causes of sleepless nights.
Understand that elections have consequences
Worry over health care is at the top of the list for good reason. With the election of Donald Trump new emphasis was placed on the repeal and replacement of Obamacare.
The most recent repeal and replacement bill out of the House of Representatives would cause millions to lose health insurance coverage. While we don’t know exactly how many, previous estimates suggest nearly 24 million Americans could lose their coverage. Medicare stands to suffer a $880 billion cut and people with pre-existing conditions would become more vulnerable under the current proposed legislation.
Most of the changes would hit the African-American community especially hard. Yet, in the 2016 presidential election black voter turnout fell for the first time in 20 years.
Here’s what you can do: Politics matter. You can no longer afford to be an idle bystander. Become informed. Voice your concerns. Get involved by calling your Congressperson or Senator and attend their town hall meetings. But most importantly, get out and vote, because elections have consequences.
Save little by little
According to a GoBankingRates survey, one third of Americans have no retirement savings at all. That’s probably one of the reasons that 37% of us lose sleep over our retirement savings. No one wants to live their Golden Years in misery.
Here’s what you can do: Have a small portion of your paycheck directed to your company’s 401k or 403b plan. Many companies will match your contribution, providing you with essentially free money. If you must, start small. Contribute just 1% of your salary to your 401k or 403b. Then, at the start of each new year increase your contribution percentage. Remember: Start early and invest consistently so that you can begin to sleep more comfortably.
Avoid student loan debt
Americans owe over $1.3 trillion in student loan debt. That’s why 34% of Americans are losing sleep because of educational expenses.
Here’s what you can do: If you’re about to enter college, pay special attention to the price tag of your education. You don’t want your education to become a wealth trap. The general rule of thumb is that your total student loan debt at graduation should be less than your annual starting salary. If you’re studying a major that pays well, you can afford to spend a little more, but if you’re in a field of study that generally doesn’t pay well you must tightly control your education costs, even if it means considering a different college or university.
If you’ve already graduated from college look into entering an income based repayment plan for your federal student loans or take advantage of the Public Service Loan Forgiveness (PSLF) Program. Consolidate or refinance your loans where appropriate.
Cut up your credit cards
It seems that nearly 21% of us lose sleep over credit card debt. It’s not too hard to realize why. Sky high interest rates combined with the power of compound interest cause balances to skyrocket in no time at all. That’s why the average US household with credit card debt owes more than $16,000 in credit card debt.
Here’s what you can do: In the the words of financial guru Dave Ramsey, if you can’t pay cash for something, don’t buy it. Question each and every purchase. Batten down the hatches and use the debt snowball method to pay off your credit cards.
With a little planning and discipline, money problems should not keep you awake at night.
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