In honor of financial literacy month, I invited money coach Susan Maldonado to share her tips on ensuring success in your personal finances.
- Get out and stay out of debt. With 80% of Americans carrying consumer debt, monthly payments are considered a normal way of life and not the massive drain on middle-class wealth that it really is. Cars, credit cards, student loans, furniture, and cell phones are all on “easy monthly payments” that make it feel impossible to get ahead financially. Make debt payoff a priority. And I mean priority like your hair is on fire. It’s no fun in the short term, but take a look at your current monthly payments and imagine just for a moment what you could do with that money instead!
- Track your spending. You do NOT need to know where every penny goes and there are many different tools out there to make this simple… but there is no way to measure your financial health and make progress without understanding what your life really costs. “Budget” sounds like “Diet”, with restrictions and deprivation, and that’s not what I mean here – just being aware of where your money is going is the first and crucial step.
- Live on less than you make. Shocker! You’ll be amazed at how much easier this is after Steps 1 and 2.
- Save the difference. Start with a simple savings account. Only 4 in 10 Americans could cover a $1000 emergency. Having a healthy savings account will allow you to stay out of debt when (not IF) a financial emergency happens. The water heater dies. Car tire blows out. Kid breaks an arm and goes to the ER. A worldwide pandemic. The peace of mind a savings account provides is so valuable and relieves much of the stress people feel about their finances.
As a money coach, I meet so many smart, hardworking people who just want to do the best for their families and enjoy freedom from financial stress. Just like “Eat less and exercise more”, these steps are simple, but not easy. It’s true that money can’t buy happiness, but managing it well provides the freedom to make choices that DO make you happy. I strongly encourage you to take a deep breath and start this journey today. It’s worth it!
