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What I Wish I Knew Sooner…

When I share the Purse Strings story and explain that it helps women learn what they need to know to make smart financial decisions for themselves and their families, I often get these types of responses. “I wish I knew more about the impact of credit card debt before I got married, and the benefits of taking advantage of my 401k early on….”

Knowledge is power.

At a networking event, I met a woman who mentioned she was going through a divorce. She said, “I wish I knew about setting up a retirement fund of some kind for myself. I have nothing.”

Another friend said to me, “I wish I knew how important it was to take the time and be aware of the income and bills in our household. I left it up to my husband while I was schlepping the girls and tending to the daily household activities. He didn’t do a good job – in fact, we had to claim bankruptcy. It was all downhill after that and we divorced. Now I am living in an apartment and trying to make ends meet.”

A colleague confided in me that she was worried about her sister. Her sister is a stay-at-home mom and her sisters’ husband brings in a healthy paycheck. The problem is, he has a healthy spending habit as well. They save nothing. Nothing for her retirement and nothing for the children’s education. She’s worried that her sister is going to end up in a financial mess.

It starts with a plan.

The goal of Purse Strings is to get the right knowledge in the hands of women so that they don’t have regrets about past spending or lack of investing that they can’t get back. It’s about sharing the stories, the information, and the right tools and resources to help one another make a plan and ensure a healthy financial future.

So how do we do it? Where do we start so that we don’t have regrets? At the end of my business meetings or even conversations with my kids, I always ask – what are the best next steps? This question helps to think about and articulate actions that move us ahead, instead of just doing nothing.

The BEST FIRST STEP to creating a powerful financial future is knowing what is happening with your money now.

Here is an easy yet very useful exercise to get you started!

Think about the finances in your household. Do you have a handle on what really comes in and goes out?

Let’s keep it simple:

  • Sit down with a piece of paper and pencil. On the left side, write all the money that comes into your household (income). This is your pay, child support, dividends, proceeds of any sales – whatever money comes into your household every month.

 

  • On the right side, write down all the bills you pay on a monthly basis and how much you pay (expenses). This is your mortgage or rent, utility bills, cell phone charges, school expense, child care. Continually add to this list as you remember different expenses. Yes, we all have the standard monthly bills but don’t forget to consider what you spend on gas for the month; groceries, dry cleaning, meals out, mani-pedis, coffee and so on.
    Be honest and transparent as you log this information.

 

Evaluate and consider the next steps:

Now you have actual information, specific to you, and now you can start making decisions on your best next step. You often hear that it is best to pay off debt, save for emergencies and invest in your retirement. But those are big buckets, so let’s first assess what you learned about your cash flow (what’s coming into and out of your household).

Is what’s coming into your household less than what’s going out? Take a hard look at what you are spending money on and see if there are ways to cut back. What you can save now can go towards a strong financial future.

Or, perhaps you need more income. Can you find ways to make more income? Is a raise in order? Can you Uber one day a week? Tutor? Take on some part-time work? How can you provide more income to your household?

Make simple but powerful changes:

  • Eat at home. It’s healthier and much less expensive. A HUGE savings.
  • Make your own coffee at home. Buy a great brand and a nice creamer!
  • Stop with the cable channels. When did TV get so expensive?
  • Have a cocktail at home. Liquor enjoyed out at dinner can be half of your bill!
  • Sell a car. Do you need more than one? With gas and insurance and car payments – this could be a big savings.
  • Don’t even go to the mall if it is too enticing to spend money.
  • Sell and shop resale only.
  • Downsize your home. Less can be much, much more.

I challenge you to work through this activity, making it as real and accurate as possible.

Work your financial muscles every day.

If you’re in a relationship, it’s good to go through this activity with your partner each month. Money can be a difficult subject for some but ignoring it only creates a mound of problems down the road. Stay positive and work together towards mutual financial goals. This creates strong and productive momentum.

Be financially conscious that when you hand over a credit card, debit card, cash, check or PayPal, you are choosing to trade money out of your account and hand it over to another, be it for electricity for your home or shoes for your feet.

Be Financially Fearless!

     A good financial plan is a road map that shows us exactly how the choices we make today will affect our future. – Alexa Von Tobel

We will provide you useful and timely information you can use to be #financiallyfearless