29tolife

Just another WordPress.com site

Archive for the tag “saving money”

Family Financial First Aid: When You Know Better, Do Better and Pass it on!

Nothing can make you feel more empowered and in control as understanding your finances, making solid decisions and watching your money grow.

Nothing can make you feel as out of control, inferior and in panic and chaos as NOT understanding your finances, making poor decisions and feeling like you’ll never get out of the hole.

I’m not wealthy, I’m not rich. I really don’t have a whole lot in my retirement, but I’m proud of the time I made up in my 20s in the last couple of years.

I realized that upping the contributions to my 401k at my last job was a smart thing to do. I’ve changed two jobs in about two years, and when I left each job, I rolled my 401k investments into an IRA.

When things got funky with my financial aid this past semester (don’t even get me started my blood pressure has finally returned to a normal state), even though it was part of my “last resort,” borrowing money from my IRA was an option that saw me through a tough time.

I grew up in a middle class family, but my parents– neither of them college grads, but who did better than their parents, did not have a financial education. They winged it.

While my dad is a very intelligent person, he fears credit cards and hates debt of any kind.

My mother, also a very intelligent person, had addictions to store credit cards, as evidenced by our bi-weekly trips to the local department store to pay her bill, and the harassing calls after she lost her job.

So once I got a job and was given an application in high school, I got a credit card and quickly built my credit line to the point where as a college junior I had a $5,000 limit. Being young, dumb and at Howard, where the most fashion-forward folks go to get educated, I surprisingly didn’t squander my good credit on clothes. It was actually footing the bill for spring break to book planes and hotels for me and my friends and paying for my boyfriend’s car repairs (because how else will he get to work?).

In my early 20s, the joy of getting a full-time job after college and seeing larger checks in a low cost-of-living state had me living beyond my means and depending on overdraft protection, acting like it really was my money.  I assumed the overdraft fees as just the cost of doing business and kept it moving without a care .

It took a very, very long time and a five-year financial education program to help me improve my credit and pay down my debt. It was a proud moment to be eligible for a good credit card again, and in comparison to the last time I purchased a car, to go from having an 18% interest rate for a used car about 5 years old to an 8% interest rate the next time I purchased a same year model, brand new.

That’s where the feeling of being in control and accomplishment kicks in. But that feeling had to come from making some big mistakes, and then doing what it took to correct them.

I didn’t necessarily fear credit, but I needed to learn that it was a tool. Unfortunately, my father’s mindset that all debt is bad didn’t help, and neither did my mother’s habit of paying a card off, so you can just get more stuff, in a constant never-ending cycle didn’t shape the best habits in me either.

I am, however thankful for having friends who discuss stocks and watch stock tickers on the news and discuss them with their parents casually as if they were discussing sports scores. And I’m slightly jealous of the edge those financially-conscious parental gave my friends, that I just didn’t have.

Like my parents, who surpassed their parent’s earning potential, here I was with a college degree, but financially, I was winging it too. Having to figure it out on my own.

One of my best friends has been buying and selling stocks for years and her parents taught her to do so. At 33, I finally asked her for help today, mentioning how I admired that in her household discussing finances is as normal and healthy as saying good morning. And she’s excited to do it and already looking up some educational classes around the next time I visit home.

It never hurts to ask for help. We are often shrouded in silence when it comes to matters of money, because we don’t want others to know how much we have, or don’t have. I was particularly interested in investing more aggressively, because I want to replenish the funds I had to take from my IRA, and while I put aside money from my paycheck to pay it back, as a single, childless person, who isn’t in her 20s anymore, my window is closing to be as aggressive as I could have been if I started thinking about money more seriously in my 20s.

While some of my friends still live at home with their parents because it is so expensive, I realized I was pouring my money into high rents in the DC area for the last decade (and paying off my college-incurred debts for half a decade), and they were learning how to be aggressive with their investments, taking advantage of the financial power staying at home with the ‘rents can provide, so they can eventually leave the nest and afford to maintain.

Having a household that talks about money openly is healthy. We have to remove stigmas around modest living or what the reality of your financial situation is. It takes hard work and discipline, but building good financial habits is something that’s crucial to your future and that of your family.

I appreciate everything my family has done for me, so I’m not knocking them at all, but I can’t help but wonder what other kinds of goals and dreams my parents could have accomplished if they had the tools.

From time-to-time, my father asks me about how much I make. I now artfully avoid it after the one year I told him, and his eyes widened and said, “You’re almost catching me.” Yes, I do think my dad is trying to be in my business, but I also think it’s a matter of him feeling like some financial progress is being made and his baby girl is secure and successful and that hopefully, by some chance I’m making better decisions than he did. Sometimes he says it outright, relieved that I’m an adult to be able to really understand his point.

While my parents have never asked me for money, I do care about their lives as they enter their golden years. A part of me wonders that because I am still single and without a family of my own, and geographically closer than my sister, who does have a family, will I have to really step up for them and how will I be prepared to do so in a way that is respectful and commensurate with how wonderfully they provided for me, knowing some of their financial sacrifices and missteps will contribute to how comfortable their retirement years will be?

I don’t know the answer to all of those questions. And as a family, we’ll have to work together to figure them out.

What I do know is unlike my parents, I have way more access to information than they ever did.

The Internet is a great equalizer. Just this morning, I’ve read several Forbes articles on how to get started with the stock market and I’m energized and excited. There’s so much to learn and I’m mature enough to get help and figure out how to make my financial future and that of my family’s a whole lot brighter.

 

 

 

Advertisements

Do Our Money Fears Hold Us Back From Our Happiness?

Last week, I asked the question if professional women could make great wives. And of course I said they can. I got a glance at the other side in the most unlikely of places.

Some folks from my job were holding a send off for a young woman who is about my age who quit to be not only a stay at home mom, but also watch other children she knew needed child care. Being an artist and one who loves to cook, she happily makes meals for the kids and gives them plenty of fun projects to do throughout the day.

She has the support of her loving husband, and she basically as a three-year old and a five month old to keep her busy.

It made me think of feminism and choices and women and work and family.

I don’t consider myself a kid person, so just the thought of having five or six small children running around and needing my attention all day gives me the heebie jeebies. But there are some women who really love kids and are great with them. And the world needs more of these people for sure.

Anytime someone walks away from a full-time gig for whatever reason, I count them as brave.

I guess I think about my family and how they think of money and work.

The attitude was/is you have to work and work very hard to survive. Not working isn’t an option.

Even the concept of me going back to school, leaving my job was not an option. I had so much fear surrounding the level of comfort I’ve built up with my steady paycheck, I couldn’t dream of being a full-time student. And why?

I know other people who have done it. They’ve had to scale back and with the scaling back they actually had a lot of freedom. But for some reason, doing that frightens me. I worry I don’t have the kind of financial support to do that.

I do think our parents do plant seeds of how we react to money and I realize that I do treat money the same way my parents do. My folks weren’t necessarily the worst with money, but they weren’t the best. My dad often tells me to be wise and smart and save. And it’s like I hear him, but there are times I feel like I’m waiting for someone else to help me or make me do it, when I should be doing it myself. That is the ultimate sign of independence.

When you know better, you do better. This actually makes me want to talk to my sister about how she sees money and if how we were raised impacts her decisions. We always had everything we needed and even a lot of things we wanted and we were good. And it seems like that’s the way I live my life now.

But I do have friends who I admire who are great savers and when they do run into major financial emergencies, they aren’t happy, but they sigh and dig into their savings and they get the job done.

I tend to sweat it out a bit and get horribly stressed. Things manage to get done, but I struggle.

Over the years, I’ve read books about financial literacy and in my last relationship the one thing I could appreciate was seeing how being accountable to our joint savings account made me feel good when I saw our balance grow and that we always had what we needed.

A wise person asked me, “How on earth could you do that for someone else, but you can’t do the same for yourself? Why do you feel like you can’t do it alone?” And the answer to that is I don’t know, or I’m scared. Money scares me.

Not having it. Not having enough. When I was a kid I didn’t see the sacrifices my parents often made to give us everything. But once I got to college and as an adult, sometimes I felt like my father let me in on too much. Which led to me feeling guilty when I do spend money. But there are also times, when I say screw it, I deserve a treat a break and I splurge. So where’s the happy medium?

I won’t lie, I have always associated the freedom to choose to stay home or work with wealthy women or upper middle class white women. It’s something my mind can’t fathom. But as I think about it, I do actually know other black women who have businesses out of their home and are great moms. Or working black women who walked away from paying gigs, sometimes with no real back up plan to save their sanity. And those choices were always the right choice. It was just about having the courage to ignore the voice saying you’ll fail or you’ll end up on the street.

The point is we all have choices. We shouldn’t let fear tether us to jobs we don’t like, but if we can make our lives work for us in a way that makes sense, we shouldn’t be afraid to change things up.

All of the people I’ve known who’ve taken these kinds of leaps have actually been alright and happier and will say, they may not have a whole lot of money but they enjoy not punching in everyday, but they do have their own set of challenges and problems that do come with their choices.

I know people who have gotten divorced and are trying to rebuild their lives alone as a single woman for the very first time in their lives. How scary is that? But we have to keep moving. We have to push beyond our fears and live.

Do your money fears hold you back from the things you really want?

The Week of Poverty

Daniel St. Pierre/freedigitalphotos.net

If you aren’t a member of the 1%, and you work hard and pay all your bills (most of them on time), you know exactly what the “Week of Poverty” is.

This is a safe place, be real.

This week is your “Week of Poverty” too isn’t it?

It is usually that week after you have paid your rent (which may or may not be above the suggested max 30% of your income) and you still got one, maybe even two weeks to go before your next paycheck.

This is the week you prepare all of your meals. You don’t eat out and you make sure you have enough money for gas or public transportation fare so you can get back and forth to work.

I’m talking bare necessities people.

During this week, when friends ask me to go out, I have to turn them down. I tell them I am temporarily on austerity.

I learned the meaning of that word around the fourth grade.

Our school district fell on hard times because a bunch of old folks with no school-aged kids rocked the hell out of the vote during a local election and decided the budgets needed to be slashed for a semester or so and the words on everyone’s lips was “austerity.”

The district canceled their contract with the bus company and everyone had to walk or be driven to school, a number of activities were given the axe, including field trips.

So anytime us kids said, “Why can’t we?”

A loving adult would simply say, “austerity.”

I’m dying for my favorite sushi happy hour, but my pockets are saying sushi will not get you to work through next Thursday.

Damn.

The most incredible thing about the “Week of Poverty” for me, is the fact that I am forced to be amazingly disciplined with my money, and I come up with new recipes made with whatever is in my kitchen. So in theory, I should be able to do the same when I have a few pennies in my pocket right? That’s what grown people in their 30s do, don’t they? LOL.

During the “Week of Poverty,” I have mastered greek salad, pasta salad, turkey chilli, chicken pho, and homemade soups. Most of which can last an entire week or longer. It’s just tough to stay the course when you are eating this stuff everyday for lunch and dinner.

Too bad all of the discipline goes out the window on payday and the *hood rich mentality sets in for me (rewarding ones self by purchasing items or experiences that are far above your means at the expense of neglecting necessities and mandatory obligations because of a feeling of low self-esteem associated the feeling of being deprived).

“You were deprived for the last two weeks! You should get those shoes! Yes, you should eat out at the hottest restaurants! You deserve it, especially after eating that chilli ALL WEEK LONG!”

*I describe my temporary mentality upon payday as hood rich, but I do handle my business… that’s why it’s a week of poverty, because I did pay everything I was supposed to. I just didn’t have a whole lot left over! LOL.

I really need to find a balance so the “Week of Poverty” could just be a regular week. No deprivation, no overspending. A little thrift, a little splurge, with some money left over.

Wait, it’s called saving, isn’t it?

Post Navigation