April is Financial Education Month, and it seems even more relevant now amid the COVID-19 pandemic to talk about how technology and virtual apps can support financial education, capability and empowerment for working age adults and their families. Even prior to what many are referring to as the COVID-19 recession, financial distress and uncertainty were major complaints among working age adults (according to the American Psychological Association’s Stress in America 2019 survey and the Aspen Institute’s Financial Security Program. Now that many are faced with furloughs, layoffs, and potential longer-term unemployment, it’s likely we will see a further spike in financial distress.
Why is managing my finances so important?
Getting a handle on our finances can have an impact on our general sense of well-being. When you have a clear picture of what’s important to you and can direct where your money is going, you’ll gain an improved sense of control over life, which may be welcomed right now among many who are feeling distressed and out of control due to the pandemic. Think about it — when you clearly see the reality of a situation, such as how much debt you owe, or how much you actually spent on eating out or on hobbies in the last few months, it can bring a sense of relief or clarity. Hiding from the truth harbors a simmering anxiety; seeing the truth allows you to size it up, consider your plan to address it, and start the tough, but rewarding work of improving your financial well-being.
How do I start?
When you think about managing finances, you may think “I have done a budget before” or “I had a budget and it didn’t work when (insert any life crisis here) happened.” These are valid responses and reactions, but you shouldn’t give up. There are a number of financial apps which can help with setting realistic goals and planning behaviors to reach them. Some of the apps recommended at the end of this article have customized tools and processes that provide much more than typical cookie-cutter budgets. For example, You Need a Budget (YNAB) helps you not only develop a budget, but to identify and customize elements of prioritizing goals, allocating resources, flexibility with goals in the short- and long-term, and self-care. These four areas help to provide tools to help you see real progress over time.
What resources are out there to help?
Below are some of the apps and online programs that we, steering committee members of the University of Maryland, School of Social Work’s Financial Social Work Initiative believe can serve an even greater purpose as we respond to COVID-19. They can provide education, guidance, and support to working families struggling with the ever-changing financial stresses they face.
As with any online program, there are a few important considerations before you use an app. For example, are there hidden fees associated with use once the trial period is over? Is the app actually a good fit for your needs, will it help you with your short- and long-term financial goals? Is the app protecting your personal information if it is linking to your accounts?
Below are a few apps that we have used with clients:
1. You Need a Budget (YNAB) budgeting software can help you save money and focus attention on working to get out of debt. You can try out the software for free for 34 days (or 12 months free for students).
2. Saver Life app awards prizes for building up your rainy-day fund, making saving fun and engaging.
3. My Savings Jar is offered through American Association of Retired People (AARP). Their motto is that “We help you start and build up your savings — even if you’re on a tight budget.”
4. Fresh EBT by Propel, Inc is an app that helps you manage EBT (Electronic Benefit Transfer) benefits in real-time, save money, and earn income. EBT benefits help individuals access food supplement and other cash benefits.
5. Mint is a well-established online program that provides users with a free, safe, and user-friendly app for tracking your money, spending, setting goals etc.
6. The Financial Health Network/Financial Solutions Lab have also funded a number of interesting apps and programs for financial health which can be found here.
The online world is full of choices and this list highlights just a few that we have used with low-to-moderate income families. All of these apps have a proven track record. They can easily be integrated with a more comprehensive overall personal plan for emotional health and well-being. In fact, more and more mental health counselors are recognizing the importance of financial health and well-being and starting to recommend using apps like the ones above in conjunction with personal coaching and emotional counseling. Using financial apps in conjunction with counseling, such as stress management and mindfulness, can help to reduce overall personal stress and lead to enhanced productivity. Technology provides us with limitless potential ways to manage and resolve financial distress!
Originally published at https://www.psyberguide.org on April 30, 2020.