As you may know I’m 26, and about 4 years in my field of work. With all the glitz and glamour of adulting, it doesn’t come without a reality factor none of us can avoid…. finances. Yes that’s right, the good ol’ management of money. Car insurance, medical insurance, rent, student loans, savings, phone bills, credit cards, etc. It’s enough to make you dizzy if you let it. Though it may seem like a huge money eating monster, with a little financial counsel, dedication and accountability, you can subdue it.
One thing I’ve learned about my finances is that I need to stay in front of it. Well how do you do that? The answer is simple. Get into the art of budgeting.
With us today we have Felicia, a licensed financial adviser who will help us tackle this topic.
You meet a lot of people at their wits end with their spending habits, what is the first thing you say to the people who are currently discouraged by their financial condition? FM: The first thing I say to people who are discouraged by their financial condition is to BE PATIENT WITH THEMSELVES! Poor money management skills are usually developed over a lifetime and most times unintentional. Unless one is intentionally taught how to manage money properly they would not possess the skills needed to take on a lifestyle change. Changing the way you view and behave with money is not a easy task. I view developing better money habits as no different from any other bad habit that you would seek help for. Those struggling with alcoholism will seek out a treatment program or those struggling with a food addiction will seek out a nutritionist to find strategies to rid these bad habits and develop positive ones.
Explain the importance of budgeting FM: The key is to budgeting is to be honest with yourself, figure out what you value most, and start small. The big idea is to simply not spend more money than what you bring home. Budgeting is simply telling your money where to go. Budgeting is not meant to make you feel limited, it is actually meant to free up money for the things that really matter to you.
What is a common mistake you see with the people you advise? FM: A common mistake that I see is people trying to make this lifestyle change without actually using the tools given. It is imperative to start tracking your money with an actual budget to get a better idea of what you are currently spending your money on. The process will rarely work without starting from the bottom and working your way to the top. Before setting a plan in place I like to ask my clients a series of questions such as, what do you do for fun? What is most important to you? What would make you feel better, saving or paying down debt? Another common mistake that is often made is that clients are usually just looking for a typical
monthly budget sheet however our lives aren’t usually typical from month to month. Given the particular month you could have a significant increase or decrease in expenses. Experiencing an increase in expenses that is not represented in your typical monthly budget will get you off track. You may or may not know how to catch back up resulting in you losing interest. Creating a monthly budget for several months at a time will help prepare for those family birthdays, outings, baby showers, etc.
What accountability measures could be set in place to help us reach our goals?
Find a buddy to do this with you.
Try using more cash than swiping your debit card.
Pay all your bills as soon as you get paid.
Set boundaries!!! Remember it’s the thought that count not always the value of gifts.
Find an affordable financial coach to help you!!