Shortly after first becoming a licensed Realtor in 1981, I knew I was fortunate I had wisely chosen my first office, and Pat Meredith was there. Pat was instrumental in taking me under her wing from the moment I walked into that little Century 21 office we shared. She quietly guided me over to a file cabinet while helping assemble Buyer and Seller packages of documents needed. She acted as my mentor.
Not only was Pat a great Realtor, she also was a tax professional. I often watched as Pat’s young clients came to her, hoping to buy homes. Many were a tad shy on qualifying, but she would sit with them, and plan financially for a time when they would be able to do so. Pat never charged for this service, but because of it, many returned to her downwind, ultimately able to buy their first homes.
Due to the pandemic, it’s no secret money matters haven’t been as easy to manage for many folks these past several months. I often think financial woes experienced now, emanate from lax money habits and the menacing Shopocalyse during exuberant financial times. The practice of tapping home equity, and using homes, as a sort of bottomless ATM machine, can come back to bite, when unforeseen events come into play. Ditto for accumulated credit card debt!
However, the gray cloud has a silver lining – a real opportunity to view money and spending in a different light. Perhaps a chance to revisit some old tried and true ways our parent’s generation practiced.
For example, when I was a girl of about 7, my roller skates were stolen from the front lawn, because I had been careless in their care. The skates were new, and I had acquired them as a birthday gift. My parents weren’t going to replace them because I had been negligent.
Not long after, I figured out spending a little less lunch money in the school cafeteria, would allow savings for a new pair of skates. I also learned it was amazing how many kids didn’t eat all their lunch and were willing to share:-)
Americans are often critically deficient in what they have as an emergency fund. And they often owe more in credit card debt than they could cover from savings. This fact puts individuals and family households in a vulnerable position.
There are money practices, which you could consider to better your position financially. This current business cycle won’t last forever. And belt-tightening methods learned and practiced now, could pay dividends in the future.
I am not a financial planner. But here are some methods, which seem tried and true, and they have worked for me. You might consider giving them a try.
(1) Put saving money at the top of your priorities. So many folks wait to see what they have left over, after everything else. Consider putting money directly into savings when your salary and paychecks come in, before you become accustomed to seeing it in a checking account available for expenditures. And save regularly, so it becomes a habit!
(2) Create a budget. It is vitally important to sit down with your bills, your checkbook and credit card statements to assess where your money is coming from, and how it is being spent. Plan a budget on the outcome of your appraisal of those figures. It is vitally important to realistically understand what you can afford!
(3) Not all credit cards are created equal. For example, some banks charge an annual fee. Interest rates vary widely among the banks issuing them. But more importantly, try not to use a credit card you don’t plan on paying off at the end of the month.
(4) Learning to assess which debt should be paid first can save money. When you look through your debt, it is more beneficial to pay off the high interest credit cards first, than the debt, which may be riding with very low or zero interest rates - For example, some cars, appliances, or furniture. Study the interest you have going out each month on debt owing. If you are paying the minimum each month on credit cards, you will feel forever in debt. Pay as much extra on those payments each month, as you can handle.