As we start a new year, I am reminded of the importance of women being financially knowledgeable and accountable. This is very important to me because I have been in situations at the grocery where I wasn’t sure if I had enough money in my account to cover my purchases. I have reviewed my credit card statements and embarrassed myself with the excess that I have purchased. I learned the hard way that we must hold ourselves accountable for our decisions and finances is at the top of the list.
I posted this 5 day challenge in December and urge you to make BEing women wi$e a priority.
For a week focus on these steps to become the WI$E Women I know you are.
Day 1 Getting Started
This week, I want to share some tools I use to stay financially fit. In full disclosure, my Economics and Psychology degrees and my MBA do not qualify me to be a financial advisor. But, what I do know from experience and by conversations with many of you, is that we must BE financially literate and more importantly, we must BE informed and engaged in our money. Again, not an expert, but I have learned the hard way that I must and can be in control of my ‘pocketbook’ (KY slang for purse). It is estimated that 90% of women will at some point be responsible for their finances. Are you equipped? Maybe, you are already ahead of the curve. If yes, please chime in with advice this week.
First, be willing today to BE accountable and responsible to your finances. Take a few minutes to write down where you have or use money. List them all! Checking accounts, saving accounts, investments, credit cards, retirement. If you feel extra brave, write down your goals or questions about your current finances. Yes. It is scary. The BE Community is with you.
Come back tomorrow for more women wi$e tools.
For where your treasure is, there your heart will be also. Matthew 6:21
Day 2 Create and Stick To a Budget
Your financial boat has an anchor..it’s your budget. If a monthly budget is too much, start with a weekly one, then build up to monthly, quarterly and an annual one. Check out today’s post on @BE12values Facebook for your step by step action plan.
Set Realistic Goals. Do you want to save? To invest? What type of rainy day fund for emergencies do you need? How will you budget for holidays, travel, education, etc?
Identify your Income. This may include your paycheck or maybe a side gig.
Identify your Expenses. Write down everything you spend money on from the rent to clothing and food, all of it.
Separate Needs and Wants. Be honest with yourself about your current income and expenses. It’s better to have more of the first.
Design Your Budget: Taking the first 4 steps and using any template you find online, put your budget in writing. I like colors and on a piece of paper I keep with me.
Put Your Plan Into Action. Look back at your goals. If you need to modify, do it now. Keep the budget close and start living it. Block off at least 20 minutes a week to check in. And don’t beat yourself up if you get off track. But get back on as soon as you can.
And you may consider finding an accountability partner.
As iron sharpens iron so one person sharpens another. Proverbs 27:17
Some references:
https://budgetgirl.com/free/
https://www.clevergirlfinance.com/blog/the-best-budget-templates/
https://www.ramseysolutions.com/
https://www.savvyladies.org/education/your-budgeting-worksheet/
Day 3 Avoid debt and know your credit score: I know you can do this!!
Women of all ages, please understand the impact of debt and how it might affect your credit score, hence future ability to purchase a home, car, or obtain other credit cards. If that deal on a new credit card sounds too good to be true, it just might be. The 10% you save when you open a credit card at the _____(insert name your favorite store) may impact your future credit score.
Take a look at the 6 steps to BEing womenwi$e I posted @be12values or message me and I will send you more details. Step 3: Separate Needs and Wants. Ask yourself the hard questions about what you need at this buying moment and what you want. The online shopping has made it way too easy to spend. If there is an item you really want, go back to Step 1: Set Goals and decide how you will save money to buy it.
Think about the example: if you carry a balance (aka don’t pay off monthly) of $5000 for a year on a credit card with an APR of 14.9%, you will pay at least $745 in interest charges. What could you buy for $745?
What is my credit score and why is it important? I am going to give you the facts and put the task on you today to know your score.
A credit score is a number between 300–850 that depicts a consumer’s creditworthiness. The higher the score, the better a borrower looks to potential lenders. A credit score is based on credit history: number of open accounts, total levels of debt, and repayment history, and other factors.
I will never leave you or forsake you. Hebrews 13:5
Day 4 Plan for the future
Small changes yield big results. If you are following the steps we have discussed:
Set Goals, Identify Wants vs Needs, Know your income and expenses, Create a Budget, and Avoid debt, you will find that your spending and saving quickly start to align with your values.
Planning for the future might include next week, next month, next year or the next 5 years. Your goals should reflect your plan. Planning for next week might include cutting out a $6 latte, waiting for a sale to buy that special gift, doing your own pedicure or manicure or checking out books from the library instead of purchasing.
Once you stop overspending on things you don’t need, you can afford to buy the things you do need. Consider these:
Do you have an emergency fund? Experts suggest you keep a stash large enough to pay for 6 months of expenses. This may be a lot to you. Figure out what is best for you and determine how much you can save and your plan. You will be surprised how quickly this fund will add up if you put away a set amount with every paycheck or side gig.
Do you have a savings account? There are tools to put it away before you ever have a chance to spend it. Look at what your bank offers in direct deposit to a separate account. While the interest rates are low, every dollar can grow.
What type of long term, health and home insurance do you have? There are many experts who can do an evaluation of your insurance and help you find the best rates. If you don’t have one, message me and I can connect you with brilliant women who have helped me immensely.
What are your plans for retirement? Whether a 401k, SEP, IRA or other tools, please look at what you will have when you retire. Find an expert who can help you identify goals.
Have you considered investing? If you aren’t an expert in this space, and if you are considering this, find someone you can trust that can walk you through options.
You’ve got this!!!
I will never leave you or forsake you. Hebrews 13:5
Day 5 Simplify. Purge. Consign. Give Away
Too many people spend money they haven’t earned, to buy things they don’t want, to impress people they don’t like. Will Rogers
I have made countless purchases I didn’t need and likely paid too much money for them. If you have also, let’s make a pact. Let it go. There is no reason to beat yourself up for those. Use those purchases or financial mistakes to spur you to change. Yesterday is history, tomorrow a mystery, today is a gift. START TODAY
BEgin your planning and processes for purging. This may include clothes, shoes, jewelry, decorations, kitchen accessories, toys, furniture. REUSE, REPURPOSE, RECYCLE. And if you decide to consign, you may make some extra $$$.
When simplifying and purging, the good ole questions stand true today.
Do I need it? love it? Could someone else use it?
Does it fit, flatter or need to be forgotten?
There are countless experts that can help you organize. There are not-for-profit organizations that need your treasures. There are friends that can hold you accountable. Find five things today that you can donate or sell?
Spending Embargo. Yes this may be difficult to begin during the Holidays but maybe there are some purchases you don’t need to make. I usually start my embargo in January and for 3 months, I do not purchase anything but food and major necessities. I recognize my toes and nails do not look so great, but I am perfecting DIY manicures and pedicures and putting that money into my savings account. What does your embargo look like?
“for where your treasure is, there your heart will be also” Matthew 6:21