The Link Between Money and Mental Health

May is Mental Health Awareness Month, and there is a clear connection between financial wellness and mental health. Financial problems are a major source of worry and anxiety for many people, and can lead to mental health struggles. If you’re worried about money, then you’re not alone! Here are some ways that financial issues can affect your mental health:

  • Stress. Money worries can be a major source of stress, and chronic stress can have a negative impact on mental health, and even physical health.
  • Anxiety. Financial problems can lead to anxiety about the future, and about being able to meet basic needs.
  • Depression. Financial problems can lead to feelings of hopelessness and despair, which can contribute to depression.
  • Substance abuse. Some people turn to drugs or alcohol, or other addictive behaviors, to cope with financial stress. You are not alone, and there are resources available.
    • SAMHSA’s National Helpline, 1-800-662-HELP (4357), or TTY 1-800-487-4889, also known as the Treatment Referral Routing Service, is a confidential, free, 24/7/365, information service, in English and Spanish, for individuals and family members facing mental and/or substance use disorders. This service provides referrals to local treatment facilities, support groups, and community-based organizations.
  • Suicidal thoughts. Financial problems can be a major risk factor for suicide. Please reach out for help AS SOON AS POSSIBLE if you are having suicidal thoughts.
    • If you’re thinking about suicide, are worried about a friend or loved one, or would like emotional support, the Lifeline network is available 24/7 across the United States. The 988 Suicide & Crisis Lifeline (formerly known as the National Suicide Prevention Lifeline) is a United States-based suicide prevention network of over 200+ crisis centers that provides 24/7 service via a toll-free hotline with the number 9-8-8. It is available to anyone in suicidal crisis or emotional distress. The caller is routed to their nearest crisis center to receive immediate counseling and local mental health referrals. The Lifeline supports people who call for themselves or someone they care about.

If your finances are negatively affecting you mentally, emotionally, and/or physically, there are a number of things you can do to improve your mental health, such as:

  • Talk to someone. Talking to a friend, family member, therapist, or financial professional who can help you cope with your financial problems and develop a plan to improve your financial situation. Getting involved in your community can help you to feel more connected and supported, which can also buffer the effects of financial stress.
  • Seek professional help. If you are struggling with mental health problems as a result of financial stress, it is important to seek help from a trained professional. A therapist can help you manage your stress, anxiety, or depression.

Take care of yourself. Make sure to get enough sleep, eat a healthy diet, and exercise regularly. These things can help improve your overall mood and well-being, putting you in a better position to be able to manage the stresses in your life.

April is Financial Literacy Month!

Financial Literacy Month is a national observance held every April to promote financial education and responsibility. Financial Literacy Month is a great time to learn more about financial literacy and to start taking steps to improve your financial well-being.

Financial literacy is the ability to understand and manage personal finances, and includes the awareness and knowledge to make informed financial decisions. Financial literacy can be improved by seeking to understand basic financial concepts such as budgeting, saving, and investing.

Financial Literacy Month is a great time to start taking steps to improve your own financial well-being. Here are some tips to get started:

  • Set financial goals.

What do you want to achieve financially? Do you want to buy a house, save for retirement, or start your own business? Once you know what you want to achieve, you can start making a plan to reach your goals.

  • Create a budget.

(…and stick to it!). A budget is a plan for how you will spend your money. It can help you track your spending and make sure you are not spending more than you earn. You can’t make progress toward your financial goals if you don’t know where your money is going each month.

  • Save money.

Start by setting aside a small amount of money each month and gradually increase the amount you save as you get more comfortable with it. Set up auto pay to direct deposit a realistic amount to a savings account out of each paycheck.

  • Start thinking about investing.

Investing money is a way to grow your money over time. There are many different ways to invest, so it is important to do your research and choose an investment strategy that is right for you. Contact a financial planner or advisor for specific advice and guidance.

  • Get help.

If you are struggling with financial literacy, there are many resources available to help you, both online and in your community. You can take a financial literacy class, read books or articles about financial literacy, follow reputable financial sources on social media, subscribe to financial newsletters, or listen to personal finance podcasts. Meeting with a financial professional is a great way to assess your own situation, and work together to create a plan on how to achieve your personal financial goals and stay on track moving forward.

Parachute Credit Counseling is dedicated to promoting financial literacy and well-being, and to help minimize the stigma associated with debt.  We offer many different services to assist individuals and families achieve their personal financial goals, and to provide financial education.

  • More information on Parachute’s Workshops and Events to promote financial literacy:
  • Essential information compiled by Parachute to promote making wise budgeting choices and maintaining good financial health:

Contact us at (716) 712-2060 to speak with a certified financial counselor and review your personal situation and create a plan to take specific steps to improve your own financial literacy.  We are offering appointments all through the month of April, and beyond!

Good News & Bad News with Student Loans: Income Driven Repayment Plan Adjustment Extended; Student Loan Forgiveness Still Blocked By Lawsuit

Loan Consolidation Required–Parachute Credit Counseling Offers FREE Assistance and Counseling

While student loan forgiveness remains on hold for the forseeable future, Income Driven Repayment (IDR) plans are an available opportunity designed to financially assist borrowers and to ultimately reform the student loan system. These plans allow borrowers to make payments on their federal student loans according to a formula based on their income and family size—the payments were deliberately meant to be smaller. Ostensibly this program had been in place but there were major issues in it, resulting in few people actually receiving the proper help.

Last year, IDR Account Adjustment was announced to help student loan borrowers benefit from the program as it was initially intended. The Department of Education will conduct a one-time adjustment of IDR payments to address past inaccuracies and permanently fix IDR payment counting by reforming ED’s IDR tracking procedures going forward.

This past week, the IDR Account Adjustment was extended from May 1, 2023 to December 31, 2023.

The IDR Account Adjustment is further planned to remove the confusion surrounding this program and make it more accessible and available to student loan borrowers.

Other Changes include:

  • A retroactive credit toward a borrower’s 20- or 25-year student loan forgiveness term, even if they are not presently in an IDR plan.
  • A credit toward Public Service Loan Forgiveness for qualifying borrowers.
  • A credit for Parent PLUS borrowers.

There is no application required for the IDR Account Adjustment. Borrowers will automatically receive the benefits.

A critical element, however, is that borrowers with non-Direct and non-government-held federal student loans need to consolidate those loans into the federal Direct consolidation program in order to benefit from the IDR Account Adjustment.

The U.S. Department of Education advises: “Borrowers who have commercially managed FFEL, Perkins, or Health Education Assistance Loan Program loans should apply for a Direct Consolidation Loan by the end of 2023 to get the full benefits of the one-time account adjustment.” Additional info available here: https://studentaid.gov/announcements-events/idr-account-adjustment

Parachute Credit Counseling—formerly known as Consumer Credit Counseling Service of Buffalo (CCCS)—is the only local nonprofit organization with expertise in student loan consolidation. Parachute recently announced that they are now offering free Student Loan Counseling throughout the eight counties of Western New York along with expert strategies for attaining financial stability.

Can I Negotiate Credit Card Debt?

Many of us have been there… our credit card debt is mounting. The increased interest rates aren’t helping matters, and we are starting to feel like we need a plan.

When you are first starting out on your path to become debt free, it can be very overwhelming. After internet searches, and reading some articles, you see that debt management and debt settlement come up often. But what is the difference and how do you know what is right for you?

Debt Management Plan (DMP)

Debt Management Plans (DMP) are typically offered by non-profit credit counseling agencies (like Parachute!) It’s a plan between you and the credit counseling agency designed to repay your unsecured debts in full within 5 years or less. The agency will negotiate with your creditors to lower your interest rates, lower monthly payments, and stop fees.  One monthly deposit is made to the credit counseling agency, then your funds are distributed to your creditors every month. You don’t have to be behind on your debt to enroll, and since the companies offering DMPs are typically non-profit, the fees for service are low. You will review your finances, credit and goals with a certified credit counselor who can help you understand your options.

Debt Settlement

Debt Settlement is when your debt is settled for less than the full amount you currently owe, typically in one lump sum payment. You usually cannot settle your debts without being significantly past due, or in default. Any amount of debt forgiven over $600 is considered taxable income by the IRS. For example, if owe $8,000 on a debt, and the creditor agrees to a settlement amount of $5,000, you will owe taxes on the $3,000 forgiven by the creditor. You can negotiate a debt settlement yourself, but there are for-profit companies that you pay to hold your money to save up enough to settle the debt, and to help with negotiations. Fees can be high, and you risk further damaging your credit and lawsuits from creditors that are not willing to settle or wait until you’ve saved enough money to pay the settlement.

What is the difference between a DMP through a credit counseling agency and a Debt Settlement Company?

Credit Counseling Agencies that offer Debt Management PlansDebt settlement companies
Usually non-profit organizationsUsually are for-profit companies that charge a fee for their services. Generally, these companies cannot charge you until after they perform services
Advise you on managing your money and debts and help you budget your paymentsOffer to arrange settlements of your debts with creditors or debt collectors
Reach agreed upon payment plans or agreements with your creditors to ensure that the creditors will not pursue collection efforts or charge late fees while on the planOften have no up-front agreements with creditors. Some creditors will not negotiate with debt settlement companies
Usually do not negotiate any reduction in the amounts you owe – instead, they can lower your overall monthly paymentTypically offer to pay off your debts with a lump sum payment that you save up in an independent account that you control
Do not advise you to stop paying your debt, but may help negotiate your monthly paymentsUsually advise that you stop paying your creditors until a debt settlement is negotiated with creditors, which may damage your credit and result in your being sued
Payment plans do not usually have tax implicationsDebt settlement may involve debt forgiveness, which may have tax implications

As always, your financial situation is unique to YOU! There is no one-size-fits-all solution to resolve debt. In fact, these are only two options that we’ve highlighted here.

In order to start your debt free journey, we encourage you to speak one-on-one with a Certified Financial Counselor who will thoroughly review your income and expenses, explain your credit report and score, analyze your debts, and provide you with expert action steps to resolve your debt. Parachute is here to help! Contact us to start your debt free journey! 716-712-2060 or www.parachutecreditcounseling.org

Dare to be Debt Free!

Parachute Celebrates National Consumer Protection Week

Looking to protect yourself from fraud, identity theft, and scams? Wondering about the best way to improve your credit, shop for a used car, or how to maximize your security online?

Parachute has information for you during National Consumer Protection Week (NCPW) — March 5 – 11, 2023 — and any time of the year. NCPW is a time when government agencies, consumer protection groups, and organizations like ours work together to share information about consumer rights and help people learn to spot, report, and avoid scams.

Go to parachutecreditcounseling.org  for more information. Also, visit ftc.gov/ncpw to learn how to get free consumer education materials and read the latest from consumer protection experts.

As always you can reach out to us directly at 716-712-2060 or www.parachutecreditcounseling.org  for your help and education on all things credit, budget and personal debt!

While Long Awaited Student Loan Forgiveness is Blocked By Lawsuit, Parachute Credit Counseling Offers Encouragement and FREE Student Loan Counseling

While Long Awaited Student Loan Forgiveness is Blocked By Lawsuit, Parachute Credit Counseling Offers Encouragement and FREE Student Loan Counseling

The Supreme Court will hear arguments for and against this loan cancellation plan on February 28, 2023

The financial futures of nearly 43 million borrowers across the country are in limbo as the Supreme Court considers the legality of President Biden’s student debt forgiveness program.

President Biden’s student loan forgiveness plan, announced in 2022–which provides up to $20,000 in relief to millions of borrowers–faces legal challenges. While many Americans were happy with the new loan forgiveness plan, there is concern that without the root causes of the student debt crisis addressed, there will be no fundamental changes made to a system in great need of repair. Most people on all sides of the issue agree that the present system is broken and will need legislation to fix it. Even without further and far reaching actions at this point, if allowed, student loan forgiveness will still make a big impact among borrowers who are low-income or didn’t finish college and are stuck paying off a loan.

Parachute Credit Counseling—formerly known as Consumer Credit Counseling Service of Buffalo (CCCS)—announced that it is now offering free Student Loan Counseling throughout the eight counties of Western New York along with expert strategies for attaining financial stability. Although payments on federal student loans have been suspended since March 2020, with interest-free relief, they will resume later this year so it is time for all to plan. Despite the current uncertainty, other relief options and changes to existing programs will be available to help borrowers reduce or eliminate their debt. Now is the time for borrowers to seek free and unbiased counseling to understand their options.

Parachute has operated the only Student Loan Counseling Program in Western New York for the past ten years. Right now, the national total student loan debt, including federal and private loans, sits at $1.75 trillion.

About 1 in 6 adults in America holds federal student loan debt. A typical undergraduate finishes school with nearly $25,000 of debt and a monthly payment of $460, which takes an average of 20 years to pay back while accruing $26,000 just in interest. Tuition fees have nearly tripled since 1980, outpacing inflation and wage growth. Student loan repayment is a critical issue that needs much direction.

The situation at this time is: millions of borrowers have already been approved for loan forgiveness, but the government is powerless to act because two federal courts issued nationwide injunctions prohibiting any debt relief under the plan. Most legal analysts expect the Supreme Court’s conservative supermajority to side against the administration, preventing the government from forgiving a cent of student loan debt. There is a real chance, however, that a majority may instead find that the plaintiffs—a group of red states and two disgruntled borrowers—lack standing to sue, which would allow the program to move forward. SHIRIN ALI, FEB 26, 2023—SLATE

While we wait for an answer…Parachute encourages residents to join our FREE Student Loan Counseling Program, staffed by experienced, certified financial counselors.  Call 716-712-2060 or visit https://parachutecreditcounseling.org/  for more information on our program and other financial services we provide.