What if there was an entire month dedicated to learning about managing finances?
Would it be a time to reflect and make changes in your financial goals? Or maybe it’d be a time to learn about new ideas that could help your small business, family or personal finance goals succeed to higher levels? I’m writing to you on behalf of the National Foundation for Credit Counseling (NFCC) to remind you that April is just that – Financial Literacy Month. And in honor of Financial Literacy Month, I will do an interview with Gail Cunningham, Vice President for the NFCC.
Gail Cunningham has been in credit counseling for 23 years and has been a featured expert on the nation’s top media outlets including: NBC Nightly News, the New York Times, CNN, NPR , USA Today, Newsweek, Forbes and more. She has also participated in advice columns and stories in Good Housekeeping, Money Magazine, Family Circle and Simple.
Even though every month is Financial Literacy Month at the NFCC, April takes on a special significance when the NFCC presents the National Survey Results on Consumer Financial Literacy.
1. With the uncertainty of the economy today, how do you begin this process of having enough in your cash reserve?
The NFCC’s annual Financial Literacy Survey revealed a startling result – one-third of adults, or more than 68 million people, report that they have no savings.
These people have put themselves on a very slippery financial slope, as when the inevitable emergency comes along, they are left with poor resolution options.
Indeed, one in four say that if faced with an emergency, they would charge that expense to a credit card (25 percent) or take out a loan (29 percent), adding to their debt load with yet another bill to pay.
These people have put themselves on a very slippery financial slope, as when the inevitable emergency comes along, they are left with poor resolution options.
Indeed, one in four say that if faced with an emergency, they would charge that expense to a credit card (25 percent) or take out a loan (29 percent), adding to their debt load with yet another bill to pay.
If I’m hitting a little too close to home, do something about it. Dedicate 10 percent of each paycheck to funding a rainy day account. At the end of a year, you’ll have a little more than one-month’s income socked away, enough to sustain you through most emergency situations.
This is my 24th year in the industry, and I’ve never heard anyone say that they’ve saved too much.
It’s not a matter of if the emergency is going to present itself, but when.
Be prepared.
Protect your family and your finances by opening a savings account and faithfully depositing into it.
And by the way, vow to only take money out of this account for true emergencies. You’ll never regret the effort that went into this.
This is my 24th year in the industry, and I’ve never heard anyone say that they’ve saved too much.
It’s not a matter of if the emergency is going to present itself, but when.
Be prepared.
Protect your family and your finances by opening a savings account and faithfully depositing into it.
And by the way, vow to only take money out of this account for true emergencies. You’ll never regret the effort that went into this.
2. How important is it to have a budget plan in place?
You need a cash-flow calendar. That may sound intimidating, but I’m really just talking about a regular calendar where you’ve written down when you anticipate getting paid and the amount of that paycheck.
Do this for everyone in the family who contributes money to the household expenses. Next, record when the bills are due, and which bills will be paid out of which checks. If you come up short some weeks, then call your creditor and ask to have your due date changed.
You may meet with some resistance, but they can do it. Ask for a supervisor if you have to. You may have to pay a bit of interest for the gap period during the first month, but it will be worth it to not have to scramble month after month.
Do this for everyone in the family who contributes money to the household expenses. Next, record when the bills are due, and which bills will be paid out of which checks. If you come up short some weeks, then call your creditor and ask to have your due date changed.
You may meet with some resistance, but they can do it. Ask for a supervisor if you have to. You may have to pay a bit of interest for the gap period during the first month, but it will be worth it to not have to scramble month after month.
People whose incomes are not the same each month also have a similar problem. These are typically folks who are in sales earning commissions. When a big check comes in, they’ve usually lived so lean for so long that they splurge and spend the entire check.
I agree that you probably need to reward yourself with a small treat (under $100) after months of doing without, but instead of blowing the whole check, try to set some money back for the inevitable months when the paychecks will be low.
Determine what your basic household expenses and debt obligations are.
Of course, your goal is to satisfy those each month. That’s why you need to plan during the good months to make up the deficit during the not-so-good months.
I agree that you probably need to reward yourself with a small treat (under $100) after months of doing without, but instead of blowing the whole check, try to set some money back for the inevitable months when the paychecks will be low.
Determine what your basic household expenses and debt obligations are.
Of course, your goal is to satisfy those each month. That’s why you need to plan during the good months to make up the deficit during the not-so-good months.
3. How important is it to not live above your financial means? As your credit card is not your money.
In recent years, somewhat due to credit being freely extended, many people built a lifestyle beyond what their income would support.
If you went to that party, you’re likely to have to suffer through the hangover, at least until you can get your debt obligations in line with your income. Start by reining in your spending. Put an absolute freeze on all unnecessary expenditures. Look at all ways to increase income while decreasing expenses. Dedicate that found money to paying off debt.
Start with the card that is doing you the most damage which is usually the card with the highest balance and highest interest rate.
Pay all creditors at least the minimum due each month, but power pay that account by putting all extra money toward it.
Seeing the balance go down will serve as motivation to keep going. Warning: when there’s not enough money to go around, sometimes people end up paying the creditor who puts the most pressure on them.
If your creditors are happy, but your electricity has been cut off, you’re paying backwards.
Be committed to paying your living expenses first, things such as the rent or mortgage, utilities, food bill, insurance, medical needs, daycare, etc.
Next in line are any secured payments. For most of us, that’s the car payment. And finally, pay the creditors.
If you pay in this order, even if you run out of money before every bill is paid, you’ve kept your home-life stable and the proverbial wolf from the door.
If you went to that party, you’re likely to have to suffer through the hangover, at least until you can get your debt obligations in line with your income. Start by reining in your spending. Put an absolute freeze on all unnecessary expenditures. Look at all ways to increase income while decreasing expenses. Dedicate that found money to paying off debt.
Start with the card that is doing you the most damage which is usually the card with the highest balance and highest interest rate.
Pay all creditors at least the minimum due each month, but power pay that account by putting all extra money toward it.
Seeing the balance go down will serve as motivation to keep going. Warning: when there’s not enough money to go around, sometimes people end up paying the creditor who puts the most pressure on them.
If your creditors are happy, but your electricity has been cut off, you’re paying backwards.
Be committed to paying your living expenses first, things such as the rent or mortgage, utilities, food bill, insurance, medical needs, daycare, etc.
Next in line are any secured payments. For most of us, that’s the car payment. And finally, pay the creditors.
If you pay in this order, even if you run out of money before every bill is paid, you’ve kept your home-life stable and the proverbial wolf from the door.
4. What are the three most important financial goals for someone’s future?
To find that solid financial ground you’re looking for, let’s begin by constructing our foundation on the five building blocks to financial success:
- Review your credit report and score.
- Track your spending.
- Create a budget.
- Pay in the proper order.
- Have adequate savings.
Now you not only know why becoming financially literate is important, but you also know the steps to take to become financially stable.
If you’re still uncertain about how to get started, reach out to a trained and certified credit counselor associated with the NFCC.
They help millions of people each year along their financial journey. You could be their next success story.
If you’re still uncertain about how to get started, reach out to a trained and certified credit counselor associated with the NFCC.
They help millions of people each year along their financial journey. You could be their next success story.
About the author: Owner of JamericanSpice. Sharing my journey in the present, from the past or thoughts for my future. Mom of two who loves to travel and read and decipher people.
0 comments :
Post a Comment
Thank you for visiting. Share your thoughts with me :)