A Journey to a Healthier Me

10 Personal Finance Basics

Budgeting

Yes, I know you’ve heard this countless times, but it truly is important! If you know about it, why is it you have yet to create one to stick with? Trust me, I am well aware that we STILL are not compensated enough, but that battle is still going. For now, let’s focus on what can be controlled.

Need help? Send me an email with the subject BUDGET GUIDE and tell me briefly what issues you’re currently having and if you prefer to communicate via email or if you want to schedule a free consultation.

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Build an emergency fund

We are all living through a global pandemic. The one event NO ONE could have prepared us for has arrived, and look how far we have come. I hope we don’t have another one for a while once this is all over, but if there is anything I’ve learned…it’s that 3 -6 months of expenses is NOT sufficient. The programs meant to help did not help the majority of people that truly needed it. Having up to at least a year’s worth of expenses should be the goal, and it should be kept somewhere safe with easy access. I personally use a brokerage account, but it may not be what you think. Just because money is in the account doesn’t mean you need to do anything with it.

If you’d like to learn more about how this works, send me an email with the subject EMERGENCY GUIDE and all the questions you have. I’ll get you answers to need to help provide that safety net for you and your family.

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Avoid credit card balances.

Using credit may be your last resort in times of need. I know it was a lifesaver for me. It is impossible to avoid credit card balances AND build your credit completely. However, avoiding HIGH balances is something we can do our absolute best with. We each have our own system to manage our debts and overall finances. However, if you’re not where you want to be after using the avalanche method, maybe it is time to consider other options.

Are you spending hours trying to figure out which bill to pay more of and not finding a way to save simultaneously? What if you had a tool to easily input your income and debts, suggesting tackling that debt more efficiently? Sounds too good to be true? I promise it exists! Do you or someone you know need this tool?

Send me an email with the subject DEBT MANAGEMENT and tell me what kind of debts you’re struggling with. Help will be on the way!

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Pay bills on time

There are always consequences to our actions. If you don’t pay bills on time, you are more likely to be charged fees and higher interest. If you continue to miss payments promptly, Lenders may transfer your debt to collections, which seriously hurts your credit score.

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Start saving for retirement.

There are options to save for the future, but some may not work for others. A Roth IRA allows you to put in up to $6000 annually, and the investments gradually grow. A 401K you may be familiar with through your employer, where part of your paycheck is allocated to an account where it grows a percentage annually. An IUL, or PPLI, is a common choice because it is not only life insurance but also allows you to withdraw earlier than the other retirement options available without a penalty. These are the commonly known 3 that are the most beneficial. More details about each and more retirement options will be explained in a workshop coming soon.

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Investing

Do any of the following terms sound familiar? Stocks, bonds, mutual funds, ETFs. If you’ve heard of them, but don’t really understand what they are, then don’t be alarmed or feel bad. Many people do not understand it, and some make mistakes.

  • Stocks: You invest to own a fraction of a company
  • Bonds: You are a lender to either a corporation or the government
  • Mutual funds: Combinations of stocks and bonds, but you invest in one to get the benefits of multiple.
  • ETFs: Exchange Traded Fund tracks a specific sector and can be invested like a stock.

If you are interested in learning more about investing, send an email to me with what you’d like to know more about, and I’ll connect you with one of my coaches.

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Getting insured

Does this story sound familiar? The spouse of someone with wealth is a suspect if something odd happens…especially when an insurance policy is involved.

We easily make jokes about it, but there is a negative connotation to this protection act for getting insurance. Why? What does it mean when a large population of hard-working families refuses to do something the wealthy utilize?

Divide and conquer. If you convince a population that they cannot benefit from these resources, there will be an abundance of those willing to take advantage of such resources.

They aren’t stealing the opportunity from you, but you’re willingly giving it up. Then again, is there something to give up if you’re convinced that it is a scam? We have insurance for our homes, car, and health, yet we deny our most important life and family.

I will admit that the system must change some faults to accommodate more people, but there is no need to change if the people do not show interest. We must come together and change this system. It will time, but the bigger the community, the better the chances are for being heard. I am only one person on a mission to raise awareness and provide access to help we ALL deserve.

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Take advantage of credit rewards.

Sometimes you may see those prequalified offers for a credit card that reward you for making purchases. These are great to help build your credit, but pay attention to the fine print! Look for the spending requirement to earn those rewards. Some offer a $500 or $1000 sign-on bonus, but you may need to spend $1000 or $2,500 within a few months.

I’m here to remind you that these are CREDIT cards. If you do not have triple the amount in your checking account, you should NOT use that much on a credit card. You should use all credit cards responsibly.

Also, you want to avoid opening multiple cards at once. Even though you were prequalified, opening multiple cards can harm your credit score. The levels it can harm you vary on various factors, but if you need help learning more, I recommend using Credit Karma for a hands-on learning experience where the research is done for you, but it is up to you to make the decisions.

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Check your credit report.

Credit Karma allows you to keep track of your credit report without harming your score. If you would like a full credit report, you are allowed one free report annually. This is why you’ll see the recommendation to check your credit report annually. Credit Karma allows you to watch your report at no cost and alert you for new activities.

After learning about some fraudulent transactions, I started using Credit Karma, but I had NO idea what I was doing. I found Credit Karma but also did more research about credit to teach myself more. I managed to increase my score significantly and had more opportunities that have saved me during this pandemic.

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Choose your bank carefully.

Even if you have been with your bank for a long period of time, double-check the fees being charged after major changes. Sometimes with system updates, there are hidden fees or even overcharges. Have you ever used your debit card knowing you have enough money, double-checked the app, but then after a few days, money is suddenly pulled? When you looked in the app, it didn’t show pending transactions but posted transactions. It may seem accurate, but always wait to make sure.

A good rule of thumb is to triple the amount you want to spend. You cannot afford it if you don’t have that amount in the bank after essential expenses. Tripling the amount gives you a healthy cushion just in case there are any issues.

When choosing your bank, always remember what your long-term goals are. Some banks are great for short-term goals, but for the long term can actually cost you. Sometimes, keeping money at the bank may not be best for you with our long-term goals. I don’t mean all of your money either. Remember, you do not want to keep all of your eggs in one basket.

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Free consultations are currently available! Send an email if you would like assistance with your financial needs.

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