With holiday festivities ongoing, and calendars serving as a reminder that there are 5 days left until the conclusion of 2018, the pressure to reflect as well as create New Year’s resolution lists intensifies. As such, as individuals mull over the pros and cons of the year, ultimately narrowing their focus on habits that need serious amending, one resolution that remains supreme is improving money management skills. According to a 2018 Fidelity Investments survey, 32% of respondents resolve to improve their finances in 2019. Additionally, 48% resolve to save more, 29% aim to pay down, and ultimately eradicate their debt, and 15% will work to save more. Therefore, with these statistics at one’s disposal, goal-setting should be uncomplicated. However, for many, the thought of brainstorming is exhaustive. Nonetheless, whether you are ready to grab the upcoming year by the fiscal horns or are dreading the confrontation of any and all things money-themed, a common theme should emerge: resolve to build realistic financial strategies.
Generating concrete, realistic financial goals will help to improve financial literacy and will increase accountability in applying theory to practice. Because it is widely known that individuals fall short in upholding their New Year’s resolutions as early as mid-February 80% as noted by a U.S. News and World Report, it is important that goals outlined are not only tangible but accurately reflect you are current financial and personal circumstances. Moreover, because refining one's financial life is a marathon, every goal outlined, and the necessary work put forth to accomplish said goal, should be intentional and patiently executed. If you are unsure where to begin brainstorming, here are a few tips to jumpstart the process: Who? What? Where? When? Why? How? Before working to accomplish your financial goal, you first to identify what your goal is/what your goals are? Moreover, your goals should be specific. Are you seeking to obtain a Master of Arts degree in Graphic Design? Are you looking to save exactly $10,000 in 6 months as a down payment for a used car? Are you looking to purchase a 3-bedroom, 2 bathroom home in New Jersey? Want to pay off the remaining $2,500 balance on your undergraduate Perkins loan? To increase your chances of achieving your goal, specificity is crucial coupled with identifying whether goals will be fulfilled in the short- or long-run. Basic Budgets 101 At the core of any financial plan is a solid budget. No matter where one lies on the income spectrum, knowing how money is dispersed is essential to mastering finances. Thus, a good budget helps track spending and does not leave one feeling as if they are on a financial diet (drastically cutting back on expenses to improve financial health). To start, utilize a method that works best for you, i.e. pen and paper or technology. Next, categorize your monthly expenses for the optimal organization. Then total your monthly income and expenses (both fixed and flexible). Finally, make adjustments. Save Some of That Money, You Better Stop Splurgin’! On November 30, 2018, rapper Meek Mill released his highly-anticipated fourth studio album Championships. With a compilation of 19 tracks, the album has been met with critical acclaim due in part to Meek’s cleverly calling attention to economic and educational advantages plaguing inner cities coupled with a loud cry for long overdue prison reform. Hard hitting and personal, critics and fans alike have marveled over the JAY-Z and Rick Ross collaboration titled What’s Free? while others, me included, were amazed by track number 6 Respect The Game. In the song, Mill reflects on the rules of both the rap and street game he has come to learn and respect, over the years. One rule in particular that enthralled me was "Rule #3: Save you some of that money, you better stop splurgin'!" Given my brand, it is of no surprise that this rule stood out from the fray. Therefore, if you are looking to seriously save, commit to either one, or all, of the following: “no-spend Mondays”, “no-spend weekends”, or “no-spend April”. As such, you are vowing to NOT spend money (cash, credit, or debit) on a select Monday, weekend, or the duration of April. Additionally, you are vowing to eat brown-bagged breakfast and lunch meals, to research free entertainment in your city, and to forgo shopping sprees. To ensure that you will not waver on your commitments, find an "accountability partner" (a friend, family member, or significant other) who will keep you grounded and focused. Your Health Is Your Wealth Often, we do not schedule annual checkups or dental visits until a lingering problem has transformed into a full-fledged crisis. Thus, to save money on already costly medical and dental bills, consistently schedule appointments and follow through with visits. Likewise, because gym memberships can be a hassle, make the city your playground. Whether you reside in the "big city" or the calm of the suburbs, aim to remain healthy by adjusting your workout regimen to align with the terrain. DIY Debt Relief Similar to budgeting, being specific about eliminating your debt is important. As such, instead of resolving to pay off "all" of your debt, choose one area of debt and commence planning. For example, if your goal is to eliminate your $1,500 credit card debt, plan to pay more than the minimum each month. Likewise, courtesy of the ACH (Automated Clearing House) Network, credit card companies will allow you to automate your monthly payments. Improve Your (Financial) Literacy To improve your knowledge of finance and money and banking as a whole, commit to reading a financial book. While finance can be exhaustive and intimidating research financial books that are not only compatible with your level of competency but are best for your unique financial needs.
0 Comments
December 10, 2018, on what was the tenth anniversary since the declaration of the 2008 Recession, HBO collaborated with VICE News and aired the Panic: The Untold Story of the 2008 Financial Crisis documentary. Having been inundated with many 2-minute promotional video clips for months, I was more than prepared to be entertained. Moreover, given my expansive background in finance, as well as my current role as a financial literacy instructor (and blogger), I was emotionally prepared to reflect upon the 2008 fiscal meltdown and how it hit close to home for myself and millions worldwide. As such, I viewed the documentary from three pivotal perspectives: a student (physically obtaining my B.A. in Economics and becoming a life-long learner of the topic), an activist (using my knowledge to doggedly advocate for the 99% as the economy crumbled before our eyes), and as a pawn (my knowledge could not spare me from the reality that my funds were being used to roll out the Troubled Asset Relief Program) . As a result of the financial crisis, once bright-eyed and eager college students, myself included, transformed into anxious, pessimistic graduates who would forever be affected by the near collapse of the world’s market. Such a catastrophe also meant there would be scarce employment opportunities, especially for the classes of 2009, 2010, and 2011.
So, where did the documentary begin in trying to make sense of the past decade? Corrupt housing practices dating back to 1970. From movies such as “The Big Short” to Michael Moore’s “Capitalism: A Love Story”, the housing market has been thoroughly analyzed, with its predatory practices picked apart. To give added analyses, and reflect on their role throughout the crisis, Ben Bernanke, George W. Bush, Michelle Davis, Jamie Dimon, Barney Frank, Timothy Geithner, John Macks, Barack Obama, Nancy Pelosi, and Warren Buffet were the keys to piecing the past decade together. Although at times their commentary did little to answer the burning questions, and more to absolve themselves of wrongdoing and wrong decision-making, one theme was consistent: we knew the housing bubble was sure to burst and we did nothing to keep the effects minimal. Thus, Fannie Mae and Freddie Mac were highlighted throughout the program and lambasted for their unscrupulous practices which included allowing lenders to give homeowners “liar loans” (borrowers state their income, which is taken at their word void of additional research), which falls under the category of predatory lending. Because of Fannie and Freddie’s work, millions of North Americans rode a dangerous rollercoaster. First, these individuals experienced an uphill rush of being able to buy a 4-bedroom home, at the lowest price, then ultimately bought two more house to flip, thus tripling their profits. Then, consequently, these homeowners took to the deep plunge into financial ruin when housing prices fell so low that banks raised interest rates to roughly 9.4%. Under those circumstances, commercial banks knew that these homeowners would never be able to repay their debt, hence foreclosures skyrocketed. Finally, mortgage backed assets became so toxic, institutions such as AIG, Bear Stearns, and Lehman Brothers (who all had shares of these toxic assets) met their demise when Barclays and others denied helping bail them out and so they dissolved. I held on to every statement made during the documentary, often repaying them in my head for additional clarity. However, no statements made my gears turn louder than the revelation that each policymaker knew TARP would split the nation in half and be the catalyst for populist movements, yet the bill was signed into law because the country was desperate, and Washington D.C. refused to repeat the high unemployment rate and starvation of the Great Depression of 1929. What I found fascinating was that minimal commentary was made towards Bernie Madoff and the massive Ponzi scheme that added insult to injury. Tuesday, December 11, 2018, marked a decade since the arrest of Bernie Madoff who was indicted on federal charges for masterminding the largest Ponzi scheme in United States history worth $65 billion dollars. Operating such a large-scale scheme, with the help of trusted employees, Madoff scammed thousands of victims out of their pensions, retirement funds, and savings. Many of his victims were so distraught that they committed suicide. A decade into his 153 year sentence, Madoff has been the subject of countless articles, books, and a television movie (The Wizard of Lies) that aired on HBO last May, so it was intriguing to find his role in the financial crisis glossed over. In the final analysis of the financial crisis, each person noted that the current political climate is a direct result of the crisis. Essentially, in the poignant words of Hank Paulson, “crises breeds populism.” North Americans who felt robbed by the federal government and the passage of TARP grew to distrust the government and wanted change. Thus, in 2016, change for these individuals came in the form of a billionaire who not only “understands” the plight of the poor, but poverty as a whole. By and large, the dialogues had expressed the sentiment that Wall Street continues feel the ire of Main Street and the necessary work to begin mending broken fences will take a lifetime or two. |
WhitneyEducation enthusiast whose mission it is to see Financial Literacy receive well-deserved shine. Archives
September 2020
Categories |