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Managing your money when times are tough

With pay cuts and furloughs now in effect across the UC system, it’s probably no surprise that nearly every seat was taken for a campus presentation about personal money management. “Living with Less: Building a Better Budget,” hosted by the UCLA Staff and Faculty Counseling Center, drew some 175 employees from all corners of the campus to the Sept. 2 Learn-at-Lunch event in the Semel Institute auditorium.

“People need practical tools in these stressful times, specifically as they deal with financial pressure,” said Jorge Cherbosque, counseling center co-director, in introducing Andrew Kish, a counselor with BALANCE, a company that counsels members of the University Credit Union on a variety of financial matters.

budget-istock-hi-res“Hard times are a good time to learn how to plan a budget, said Kish. He said that he and his colleagues find themselves consulting with growing numbers of people hit by economic hardship and grappling with a negative cash flow — more money going out than coming in.

“Sometimes it’s rough, even shocking” to take a cold, hard look at your income and your expenses, Kish said. “It may be shocking, but it’s a requirement. You need to take a look at where you are right now to determine how to improve the situation.”

As the most powerful tool available for establishing financial control, he said, a budget will enable you to reach your goals — whether that means having enough money to pay your immediate expenses, or perhaps buying a new car or planning for retirement.

Budgeting also helps you use your money efficiently, rather than frivolously, and become financially secure. “If you earn $30,000 a year, in 30 years you earn almost $2.5 million,” Kish said. “How are you going to spend that money?”

One pathway to creating a budget is to track your expenses in detail. Using tracking forms that are downloadable from the BALANCE website, or computer software designed for this purpose, keep an eye on everything you spend.

“When you get home every day, write it down,” Kish urged. “How much did you spend on filling up your gas tank? Going out to lunch?”

This habit might lead to some surprises, Kish said. “You might discover, ‘I didn’t know I was spending that much on Frappuccino.’”

Find more Learn-at-Lunch events from the Staff and Faculty Counseling Center.
Find more Learn-at-Lunch events from the Staff and Faculty Counseling Center.
A bit of simple math — your monthly expenses minus your monthly income — may bring you to a negative cash flow. If so, it’s time to think carefully about whether your expenditures are really essential or not. Paying your rent and buying groceries are probably essential; getting weekly manicures or signing up for pay-per-view boxing matches is probably not.

“This takes time, a bit of homework — but realistically, if you want to prepare for the impact of pay cuts you have to start somewhere,” Kish said. “Will this have a negative impact on your life? And if it does, what types of things are you going to need to sacrifice?”

Kish also offered a variety of tips for saving money, from buying generic medications to refinancing your home while interest rates are low.

He also encouraged putting money aside in an emergency fund to cover three-to-six months’ worth of living expenses in the event of a catastrophe such as a job loss. In the absence of such a cushion, he said, “people start using their credit cards for things like buying groceries, then having to pay interest on top of the money they just spent. It’s a very slippery slope.”

Kish and other counselors from BALANCE, which is headquartered in San Francisco, are available for free phone consultation to members of University Credit Union. They can walk you through creating a budget and a variety of other topics, including setting financial goals, preparing for a home purchase or avoiding a foreclosure, and planning for retirement.

Free educational materials and financial management forms and tools are downloadable from the credit union website, which includes a link to BALANCE. Counseling services are available in Spanish at this at this BALANCE website.

UCLA Staff and Faculty Counseling Center will present another money-related workshop, “Your Credit: Facts, Myths and Scams,” on Wednesday, Sept. 23, noon-1 p.m. in the Semel Institute Auditorium. To RSVP, call (310) 794-0245, or e-mail Lena Wu. A future session discussing the psychology of money is also being planned.
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