Since April 2003, the United States has recognized April as Financial Literacy Month. As such, for 30 days, financial literacy educators and organizations alike focus their content and energy to highlighting the importance of economic and financial literacy. Such efforts are crucial for financial illiteracy and a lack of financial preparedness can have damaging effects, such as increased debt, dwindling retirement funds and Social Security, higher tax burdens, and rising unemployment. Moreover, for disenfranchised individuals, which includes poverty-stricken and working-class individuals, the effects of financial illiteracy can be twice as crushing. Finally, for these demographics, the rate at which funds are saved are below average. Thus, it is important that continue to raise awareness about the necessity of financial education and continue to highlight the positive outcomes.
Reflecting further on the various topics that encompass financial literacy, interest in investing has risen. As individuals work doggedly to manage budgets and pay off existing debt, pride in their money management skills swells. Likewise, investing is a sound fiscal practice for ensures both short- and long-term financial success. When properly researched and done correctly, profits from investing are plentiful which serves another stream of income. Therefore, for those looking to diversify their income and ultimately begin building a path for generational wealth, investing is encouraged. To provide insight on investing further, below you will find a March 27th Twitter #CreditChat centered on investing from Experian: Q1: What does it mean to invest? WW: To take earned income, or funds achieved by other methods, and place a percentage of it in property or shares in the hopes of receiving profit. #CreditChat Q2: Is investing a good idea? WW: Investing is a fantastic way of securing another stream of income as well as maximizing all that the market has to offer. #CreditChat Q3: Can you invest while you’re in debt? WW: You sure can! Although your top priority is to eliminate existing debt, which means half of earned income will probably be used to achieve this goal, start small if you are considering investing. #CreditChat Q4: What are the best types of investment? WW: 401k accounts, bonds (mutual and U.S. Savings bonds), Certificate of Deposit (CD) accounts, medium-level stocks, Roth IRA accounts, and more! #CreditChat Q5: When should you start investing? WW: As early as steady income has been earned. As such, if you are a recent college graduate, and are earning a steady flow of income, the time to start investing is now. Similarly, if you have forgone college, and have entered the workforce earlier in your journey, the time to start investing is now as well! #CreditChat Q6: How do you invest in stock? WW: With all things financial, employing the proper research skills in bonds, stocks, and mutual funds is key. While there is a plethora of information available, such information is presented often assuming that the reader is highly-knowledgeable on the topic. However, there are plenty of people who lack access and education on stocks, which should be at the forefront when creating and disseminating information. Nevertheless, finding easy-to-read guides and tips on investing and stocks is a helpful start. #CreditChat Q7: What is the difference between “saving” and “investing”? WW: Saving is setting aside funds to use at a later date. Investing requires one to buy bonds, mutual funds, or stocks that will (hopefully) mature and yield profit at a later date. #CreditChat Q8: What are some low-risk investment options? WW: My go-to options are always saving accounts and savings bonds. Again, with all fiscal options, it is important to find low-risk investments that best fit your intended goal and current income level. #CreditChat Q9: Does investing affect your credit score? WW: No, it does not! #CreditChat Q10: Any final tips on how to make your money grow? WW: Research, apply theories to practice, then practice patience. The road to financial success is slow, but the rewards are worth the wait! #CreditChat
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Every year, the last week in February is dedicated to brainstorming, outlining, and ultimately implementing techniques necessary for effective saving, which is known as America Saves Week. According to the organization, the time-honored event, “started in 2007 and along with Military Saves Week, it is a national opportunity for organizations to work together within their communities to transform the lives of millions of Americans”. As such, from February 25 – March 2, 2019, it will be the fervent wish of financial analysts, educators, and enthusiasts alike that Americans buckle down and not only become transparent about their difficulty with saving but will be open to adopting strategies that will help amend poor habits.
With the plethora of financial resources available, and steady climb to access, low- to moderate-income households are working diligently to build wealth by eradicating debt and saving more. Thus, through the myriad of fiscal challenges found across major social media platforms, families and individuals are first holding themselves, then one another, accountable for improving their financial circumstances. Thus, as pledges are taken this week, below you find six savings tips that will help you successfully save money: Tip #1: Pay Yourself First Put away the amount you intend to save before you do anything else. For example: If you resolve to save 10% of your income, be sure to accomplish that task before funds are dispersed. Tip #2: Saving Is Linked To Your Expenses How much you should save depends on how much you can save. Example: There are two workers, Jack and Jill. On payday, Jack utilizes his money to pay rent and his car note. Jill utilizes her money to buy items she desires but does not need because her parents pay her car note and rent. It would appear that Jill is saving more because she does not have any expenses, however, this is incorrect. Such thinking is incorrect because expenses are “things you spend money on”. Therefore, the correct statement is, “Jill has fewer expenses than Jack”. No matter how much money your earn, or how many expenses you have, you will more than likely save more if you remember to pay yourself first. Tip #3: Find Out Where Your Money Goes Although tedious, tracking is necessary. Thus, if you decide to track funds manually, utilizing a notebook and a pencil or pen, write down how you spend daily, weekly, and monthly. Possessing a Money Diary to write down these expenses can assist in completing this task. As such, in your diary, list what you have purchased, the cost, and why the purchase was made through storytelling. The end goal is for your diary to be a tool to further your education about your role as a consumer and your fiscal habits. Tip #4: Cut Your Expenses There are expenses that we can all more than likely cut, which include but are not limited to: $5 cups of coffee (Dunkin’ Donuts, Starbucks, etc.); buying $12 lunches; and eating out at restaurants. Solutions to these problems also include but are not limited to: bringing coffee from home in a thermos; brown-bagged lunches; and eating out at restaurants twice a month. Specifically, if you can cut your food-related expenses to roughly $8 a week, that is $32 a month! Tip #5: When You Do Spend, Be A Smart Shopper You are beginning to master paying yourself first and cutting down your expenses. Suddenly, Tim Cook and the team at Apple announce that the iPhone XR will be re-released with additional upgrades. Simultaneously, Samsung announced that the Galaxy 10 will hit shelves in another month and now you are faced with a dilemma: which device do you buy? Now is the time to employ your comparative shopping skills. As such, comparative shopping allows you to compare prices across retailers, ultimately choosing the product with the cheaper price tag. Before I continue, it is critical to note that the aforementioned products are frequently out of the price range for many low – to moderate-income leveled individuals. However, for those fortunate enough to purchase these items, do your due diligence before making any final decisions. Tip #6: Beware of Unsolicited and Untrustworthy Online Advice Unfortunately, not all “expert tips” have been thoroughly researched and tailored to an audience by analysts and educators in the field. Therefore, reading every article of information available is highly suggested. Once you have a multitude of tips at your disposal, it is time to create an action plan. Every February 14th, couples, families, and friends-alike, anticipate a day of celebrating companionship, friendship, and love. Thus, for those who annually partake in the (debatable) tradition, grand expressions and gestures of love can be difficult, especially when on a tight budget. As window displays glitter and glisten, with all neon signs pointing to buying boxes of chocolate, bouquet arrangements, cards, and perhaps even jewelry, the pressure to “arrive in style” is mounting. On the other hand, consumer experts have studied Valentine’s Day trends over the past decade and the results are intriguing: Ten years ago, more than 60 percent of adults planned to Valentine’s Day; today, that number has dropped to just over half. And yet, Valentine’s Day spending has continued to rise with $20 billion dollars projected to be spent this year. (Cullen, National Retail Federation, 2019)
Cullen explains that consumer’s declining excitement over all Valentine’s Day related activities is related to the “over- commercialization of the holiday; not having anyone to celebrate with; and simply not being interested anymore” (2019). Moreover, data collected highlights that in 2009, 72% of 18-34-year-olds participated in Valentine’s Day traditions compared to the 52% of 18-34-year-olds surveyed who stated that they will participate in Valentine’s Day traditions this year. As a result, for a majority of 18-34-year-olds partaking in the action, celebrations will deviate from the norm. For example, they will “treat themselves to something special, hold a get-together with other single friends, or even purchase an ‘anti-Valentine’s Day gift’" (Cullen, 2019). And yet, for the remaining lovers of tradition, the average amount spent on a gift for their significant other will be over $60 and land within the realm of $140. Therefore, if these prices are leaving your panicked, do not fret for there are many ways to gift your significant other without breaking the bank. Cards Should trying to tap into, and effectively hone, your creative skills leave you frustrated as you attempt to make a well-crafted homemade card, it is alright to walk away from the project and celebrate your efforts. Once you have regrouped, employ research. To start, Amazon can be your Valentine’s Day source as they are selling an assorted 30 pack of Valentine’s Day greeting cards for the low price of $20. With a variety of cards at your disposal, your greeting cards needs can be met for years to come. Additionally, Walmart is selling assorted Valentine’s Day greeting cards for a low price of $5. Candy It is no secret that chocolate is the most common, and often most expensive, Valentine’s Day gift. For example, GODIVA’s Assorted Chocolate Gold Gift Box, Valentine’s Day Ribbon, 36 pc. can run a buyer $49.50 without tax. Although their 20 pc. assorted gift box has been marked down to $32, such a purchase is costly. Thus, for those looking for affordable options that are sweet (wink wink) on your wallet, look no further than drugstores. For the next week, CVS will run “$1 off” and “Buy One, Get 50% Off “promotions on all candy. Such promotions not only ensure that your goal of satisfying your significant other’s sweet tooth is achieved but achieved cost-effectively. Dining Between the stress of making reservations months in advance, to actively saving small portions of paychecks to cover the often $110 bill, eating out on Valentine’s Day can be a daunting chore. Nonetheless, should you and your significant other be looking forward to this part of the day, celebrate to your heart’s desire. However, for those who were not fortunate enough to save for the day, research Groupon for special offers on meals. Likewise, research restaurants offering Valentine’s Day specials as well. Should your research prove unsuccessful, consider dining out on February 13th, February 15th, or February 16th. Dining prior to, or after, the holiday may not prove to be such a financial drain. Even though there are opportunities to dine out on a budget, some couples will opt to stay in to avoid the hustle and bustle. Thus, should you or your partner love to cook, go grocery shopping days prior in preparation to cook together. Flowers Synonymous to chocolate, flowers, specifically roses, are another go-to Valentine’s Day gift. However, bouquets of roses are expensive. Therefore, with all things, employing research is important. To start, research the 30-40% off deals offered by the “1-800 Flowers” and “ProFlowers” websites. Should the price leave you cringing as a result of the tax and delivery fees included, play around with flower arrangements. As such, instead of relying solely on roses, create a bouquet of carnations and a few roses. Or, opt for a bouquet of carnations instead which may total $15. Moreover, do not be afraid to purchase flowers from your local grocery store and supermarket which may have considerably marked down prices. Homemade Gift Basket Although aesthetically pleasing, professional gift baskets are costly. Thus, to re-create a basket without emptying your wallet, while showing your partner that you are aware of their favorite things, first find a wicker basket with a handle from any dollar store. Then, begin filling the basket with their favorite things: original blends of coffee, assorted teas, books, candy, DVDs, lotions, socks, and more. Finally, wrap the basket in cellophane (again, from any dollar store), and you are on your way! Twenty-three days into the new year and while some are celebrating the success of achieving goals outlined in December 2018, a majority are anxious about the devastating effects bound to increase as a result of the government shutdown. As Democratic and Republican politicians continue to express anger, disappointment, and disbelief surrounding the lack of common ground reached with regard to building the infamous “wall” tens of thousands of federal employees are scrambling to pay bills as a result of either being furloughed or simply reporting to work and completing tasks without pay. Because of these events, and more, resolving to practice better fiscal habits may be inconsequential for individuals scrambling to pay looming bills.
However, for those seeking to brainstorm, and ultimately execute, realistic financial goals in 2019, the time to start is now. Moreover, when analyzing a top financial goal among individuals, the common thread was improving one’s credit. To illustrate this claim, in December 2018, Experian (a leading global information services company) released an article announcing the launch of Experian Boost. According to writer Brian Cassin, Experian Boost is aimed at “giving consumers more control over their credit score” by “adding positive telecom and utility payment information directly into their credit profile”. The reason for the launch was because, “more than 100 million Americans don’t have fair access to credit today. They are often overlooked by lenders and forced to rely on high interest credit cards and loans.” As a result, they “often find themselves stuck in a never-ending cycle in which the best of intentions and the desire for a better financial future clash with reality” (Cassin, 2018). Looking to add another perspective, on January 16th, I participated in a #CreditChat on Twitter with Experian and their panel of experts. Below you will find the transcript: Q1: What resources or apps are available to those trying to pay down debt? WW: Apps such as Mint are more than ideal in providing individuals with the necessary tools for paying down debt. Additionally, @CFPB’s website has great information and step-by-step-tools as well. #CreditChat Q2: Is a credit card balance transfer worth it? WW: Balance transfers are worth it IF your new credit card comes with low interest rates coupled with a high credit limit. #CreditChat Q3: What should you do if your balance transfer credit card limit is too low? WW: Do not panic and call your credit card provider to work through increasing your limit. Do research beforehand, so as to be prepared, is also highly-suggested. #CreditChat Q4: What are some common myths that keep people in debt? WW: I think the biggest misconception and myth is that checking your credit score will ultimately lower it. Fortunately, there are a plethora of articles busting this myth and highlighting the fact that it is beneficial to check your score. #CreditChat Q5:How does debt affect your credit score? WW: We know that unpaid credit card statements, and overall debt, can increase interest rates often making debt harder to eradicate. While the many factors surrounding debt need to be analyzed, it is still worth noting that massive debt produces negative outcomes. #CreditChat Q6: At what point should you file for bankruptcy? WW: When you have exhausted all options in repaying debt and need to push “restart”, filing for bankruptcy can be an option. However, it is advised to read all of the rules regarding bankruptcy before proceeding. #CreditChat Q7: In what order should I pay off my debts? WW: Because each individual, and their level of debt, is unique, each method of payoff will be equally unique. In paying off my debt, student loans to be exact, I have been intentional about raising monthly payments on larger loans. #CreditChat Q8: Should I prioritize paying off debt or saving for emergencies? WW: If financial circumstances allow for both paying off debt and saving, do both! Again, we have to be careful about categorizing all financial needs as the same, so if your income only allows you to pay off debt, do not feel bad about slowly saving. #CreditChat Q9: What are some best practices for avoiding credit card debt altogether? WW: Do not be tempted to swipe, swipe again, and swipe once more, because of high credit card limits. Be smart about purchases and learn how interest rates are the crux of remaining in great financial standing or falling into financial traps. #CreditChat Q10: Any final tips on minimizing debt? WW: I am an advocate of tracking expenses; thus, whether purchasing a “Money Diary”, tracking expenses through Excel spreadsheets, or through auditory apps, being able to pinpoint excesses in spending can help in curbing bad habits. #CreditChat |
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