In honor of it being “Financial Literacy Month”, I thought it would be appropriate to break my silence by discussing finances.
Disclaimer: I try my best not to discuss subjects that I have not experienced personally, seen with my eyes, or read and interpreted with my mind.
Now that that’s out the way, I will share with you what I found to be important in my 29 years of living as it pertains to finances
- Budget A tool used to track your income and expenses. I live by my budget. I want everyone who is reading this to go out and buy a composition book right now and start your budget today! Let me help you get started. Open your composition book and write down all of your monthly bills. Next to your bills write the due date, balance, and interest rate. On the following pages right down your pay dates for the next 3 months. Under each pay date, list which bill is scheduled to be paid with that check. This will help you to better get a handle on your finances. For Example: I get paid April 15 and April 30 this month. Under April 15, I would put cell phone and the amount being as though my cell phone is due on the 16th. Under April 30, I would put mortgage because as we know rent/mortgage is due on the first.
- Pay Yourself First The Golden Rule in my family has always been to save 10% of your income. Now 10% may seem a little steep for some. Some weeks 10% is too much for myself. So start small. 1%, 3%, 5%, is enough to get you started. The point is to get in the habit of saving for a rainy day. Get in the habit of not spending everything that you earn. Doing this also helps you to create the habit of preparing for the future.
- Pay Off Your Debt Credit Cards, Car Loans, School Loans, Cell Phones! Pay it off! Whatever it is PAY IT OFF. If you want to start with the debt that has the highest interest rate or start with the lower balance, Look over your situation and figure out what works best for you!
- Take Advantage of DCA Accounts- What’s that you say? Well its an account that employers offer that helps to offset childcare expenses. The money is taken out of your account before taxes. Its a beautiful thing. Inquire with your employer for more information
- You Deserve A Cushion Cushion – “What if I lost my job today money?” If you are living from pay check to pay check. Its time to create better habits that ensure that your cushion is FAT! What if you lost your job today, how comfortable would you be? Review your budget real quick. Look at 1 full month of bills and total them. How comfortable would you be if you lost your job tomorrow? Those in the financial realm would say that people should have 3-6 months of savings in their account in case of an emergency. I have read in some articles that 12 months worth of savings is sufficient. It really all depends on how comfortable you would like to be if an emergency were to arise.
- Think 1,3,5 Years Increments Think about where you would like to financially within the next 5 years. What salary would you like to make? How much money would you like to have saved? What major purchases do you plan on buying in the future? See kids in your future? What you think about you bring about. Just think first!
Here are some terms that I am now familiarizing myself as well. If your interested in taking your finances to the next level research (Google, YouTube, Books) the following the following terms/names
- IRA (Roth/Traditional)
- Compound Interest
- Personal Finances for Dummies (Book)
- Warren Buffet Interviews (Youtube)
- The Budgetnista (YouTube)
If there are any tips regarding finances that you have learned please share with us. Any books you would like to recommend, please share!
Until next time…..