Never To Late to Manage Your Money 2

By S. Dickerson

My mother is and always has been my hero. As a single mother, she raised six children while barely making minimum wage working in a chicken factory five and six days a week. She never had “extra money” for extravagances like weekly allowances for us kids, or snacks like chips, ice cream, cookies, etc. at the grocery store. We only had enough for life’s essentials with the help of relatives. I remember when I started school (I was number five of six, my youngest brother following three years after me), not being able to get my school books until the end of the second or third week of school because my mother couldn’t afford to pay for 5 sets of books at the same time. With the assistance of great aunts and uncles, she managed to afford a few groceries each week, pay a few bills, and ensure each of us eventually got what we required most---namely books and school supplies---to make it through each semester of elementary and high school. While our neighbors and best friends’ parents were purchasing new clothes and shoes, my mom was sorting through older brothers’ and sisters’ clothes to see what could be handed down to us younger kids. Through her struggles, our mother taught us early the difference between essentials and non-essentials.

We began our journey to sound financial health by taking a close look at our income versus our expenses, as well as paying close attention to our credit reports. In my humble opinion, there are no quick paths or short cuts to financial well being; this is something requiring well thought-out plans and deliberate and decisive action on your part...yes, you actually have to do something.
Let’s say your credit report has no discrepancies, your payment history doesn’t make you cringe, and you haven’t maxed out all our credit cards. It sounds like you’re ready to take a step towards investing, but you’re still not sure where the extra cash you’ll need will come from. Remember when we talked about luxuries disguised as necessities?

Start by assessing your spending habits.

• Start a spending diary. Get a little notebook and record every penny you spend and what you spend it on.

• If you’re an emotional spender (shopping when you’re sad, lonely, angry, depressed, etc), make a small note of how you’re feeling when you splurge, too.

If you don’t cheat on this, but actually record every cent you spend, two great things will happen: you will become much more conscientious about what your hard earned income is going towards and you will clearly see the “fat” in your budget that can be redirected towards a six-month emergency fund, long-term savings and investment goals. At the end of the first month, take a look at how much you spent on eating out, after work cocktails, movie tickets, music downloads, CDs, DVD rentals and purchases, etc.

Find ways to save.

• Slip coupons and save at the grocery store, and remember, never shop for food when on an empty stomach.

• Use your local public library as an excellent source of free entertainment. Thy have the newest selection in books, DVDs, video games, music, etc. It’s not the library you grew up with in the ‘70s and ‘80s.

• Save on gas and carpool when feasible, and if you’re close to work/church/school, try walking or riding your bike a few days a week.

Get down to the business of saving!

• Take stock of your new found thrift and start off by purchasing a three or six month money market CD. Though the returns on money market CDs aren’t excellent right now, they are safe (you won’t lose a dime), and it keeps your funds out of your hot little hands so you won’t spend it if self control is an issue for you. As your CDs mature, add to them and roll them over for the next three to six months. As you slowly watch your money grow, you’ll become more excited about saving.

• Enroll in some sort of retirement account. Most employers who offer these will match your contributions up to a certain amount…that’s almost like getting free money.

• One of my favorite investments is US Savings Bonds. For $25, you can buy a $50 EE series bond. If you have a bit more cash available, you can purchase up to $20,000 in additional denominations of $75, $100, $200, $500, $1000, and $5000. You have to hold on to these for at last one year before they can be cashed in. Find out more about EE and other US Savings Bonds by visiting www.savingsonds.com.



These are just a few ideas to get you started. There is a plethora of information to be found on the internet…just be sure to look closely before you leap on any “get rich quick” schemes. We’ll explore other types of investment options in our next installment. See you next time.