Money Matters

I hope that you had a fun filled summer and are planning for a great fall season!

In conversations recently and in the past, finances occasionally comes up whether it is about income, juggling student load debt, or building wealth. What I take away from these conversations is that many people do not have a financial plan or have not established financial goals. This month I decided to share basic money management principles and provide a few resources. This information may seem elementary to some but you’d be surprised at how many people just do not know. Feel free to share this blog with others especially Millennials who could use a few tips on what to do with their new income.

**Before I get started, I want to give a disclaimer that I am not a financial advisor/planner and the information presented below is from my own personal research and experience.**

~Increase your financial literacy:

I highly encourage educating ourselves on how to manage money or what is popularly called personal finance. Some of us were taught this by our parents and some of us were not. I can guarantee that the vast majority of us were not taught personal finance in grade school or college. So, I believe it is our duty to increase our knowledge of financial principles so that we can make good decisions. Personal finance includes budgeting, retirement, investing, insurance, real estate, paying for college, and tax planning. Like I hear people say, “when you know better, you do better”. A good place to start is Mymoney.gov. This website was developed by The Financial Literacy and Education Commission in 2003 as a means to increase financial education for Americans. The website focuses on their 5 money principles (MyMoney Five): Earn, Save and Invest, Protect, Spend, and Borrow. If you feel this would be a good resource to you, check it out along with other books, blogs, podcasts, and videos to expand your knowledge.

~Create a budget and stick to it:

I know some of us do not like the “B” word but monthly budgeting is a must in managing personal finances. Knowing your earnings and tracking your spending so that you do not go into the red is key. With all the technology out there, budgeting has been made quite easy. I’m pretty sure you can Google a budget template and there are plenty of apps on our cell phones to choose from. I use an app called Every Dollar. This app has a simple, easy set up and you can link it to your bank account to help track your spending. Once you get into the habit of budgeting, it can decrease your money woes and make reaching your financial goals easier.

~Decrease/Get out of debt:

I cannot stress the importance of getting out of debt enough. Whether it is student loan, credit card, personal loan or some other type of debt, get rid of it as fast as you can. I know there are a lot different opinions out there about debt freedom. However, I consider debt to be modern day slavery as the debtor is working for someone else’s gain. Even the Bible says in Proverbs 22:7 that “the borrower is slave to the lender”. I am close to being student loan debt free and I feel such a huge weight lifted off my shoulders already.I once heard Dave Ramsey say and I paraphrase, “one of the best ways to give yourself a raise is to get out of debt”. Once you receive this automatic raise, you’ll be better able to finance and have the time freedom to pursue your passions. If you desire to get out of debt and need guidance, I highly recommend checking out Dave Ramsey’s Financial Peace University and/or reading his book The Total Money Makeover. Not only does the program and book coach you on getting out of debt, they also educate on other financial literacy topics.

~Get a side hustle(s):

We’ve all heard the saying “don’t put all your eggs in one basket” and I completely agree. Having more than one stream of income allows for flexibility. When one stream is low you do not have to stress because another stream is coming in. Ideally you want all streams to contribute at their optimal level. Another positive of multiple income streams is that the extra money can be used for other things such as paying off debt, saving for retirement, funding leisure activities, and investing. There are many legal side hustles out there and you can even create your own by monetizing your skills. Do your research and choose side hustles that most interest you and fit into your schedule.

~Build an ER fund:

It is also important to save for a rainy day. Life happens to all of us and it is always nice to have a safety net. In my research, I have come across recommendations to have anywhere from $1000 to 3-6 months of your living expenses saved up as a nest egg. Whatever you consider comfortable for you to save, make building an emergency fund a priority. Having this fund established will eliminate stress when an unexpected event arises and decrease your dependence on credit cards or borrowing to cover it. I suggest that you save this money in a high yield online bank so that your savings can earn money from interest.

~Save for retirement:

We all are going come to an age and point in our lives where we retire from our careers so why not prepare now so that we can live comfortably. If your employer offers a 401K, sign up and contribute to the max especially if the company matches your contribution. That’s free money! It is also a good idea to establish and contribute to a Roth IRA. I suggest choosing a Roth over a Traditional IRA because a Roth’s earnings grow tax free and withdrawals at retirement are also tax free. Choose what is best for you based on your retirement goals. To learn more about these retirement plans along with others click on the following link: https://www.irs.gov/retirement-plans/plan-sponsor/types-of-retirement-plans

There are also tons of books and articles that you can seek out that provide helpful suggestions on retirement as well.

~Invest:

Investing is a great way to make your money grow. Again, it is important to create financial goals so that you are better able to choose investing options that align with those goals. Some popular investment options are in real estate and the stock market. Going into detail here would take up a lot space and time. So, in an effort to keep this short I want to share a couple of reads that I am currently gleaning from. For those interested in the stock market, I’m listening to a book on Audible called The Intelligent Investorby Benjamin Graham. This book can help get you started in understanding the ins and outs of investing in stocks and bonds long term. Although it is an old book, it has been revised and the practical knowledge can be applied to the market today. If you are interested in real estate, especially rental property, a recommended read is Building Wealth One House At A Time by John Schaub. There are plenty of other books but these are the ones I am currently checking out. Feel free to seek out books, articles, and other educational tools that suit your interests and goals.

The internet is a great resource and there are a lot of people who are sharing things they have learned that can help you on your financial journey. Below are a few people that I follow online who have helped to expand my knowledge of personal finance. Feel free to check them out:

Dave Ramsey: www.daveramsey.com, Youtube, FB, Instagram

His and Her Money: www.hisandhermoney.com, Youtube, FB, Podcast, Instagram

Our Rich Journey: www.ourrichjourney.com, Youtube, Twitter, and Instagram

Black, Married, and Debt Free: Podcast, Youtube, and Instagram

BiggerPockets: www.biggerpockets.com, Podcast, FB, Youtube, and Instagram (they have great webisodes as well)

I hope what I have shared was helpful in some way. The information is very general due to time and space, so feel free to do your own research and find more information specific to your goals. For those of you wondering why I did not mention insurance, I decided to leave that up to you to do for homework along with tax planning, paying for college, etc. Remember, in all your getting, get understanding (Proverbs 4:7). I would like to add that after you get understanding, add some action to it!

All the best to you:)