No More!

A divorce is final and a wife who always left the finances up to her husband is now left to fend for herself financially.  A husband for thirty years suddenly passes away from a heart attack and his widow has no idea where to start to put her life back together financially because she always let him pay the bills and invest on their behalf.   Both of these women and both of these situations I know personally. Both of these situations happen too often and women are always on the losing end!  When I write it is usually to inform the reader about how to manage their money better so that in the future they will have wealth and not debt.  Rarely do I write about subjects that are intense in nature, but as Women's history month is upon us I feel that I need to address an important issue that is affecting 4 in 10 households in the United States. 

Women are the primary breadwinners in 4 out of 10 households in America which means it is more important than ever for women to know how to manage their finances. Not only for themselves, but also for the children they have or hope to have. Whether a woman is married or not she has to be in control of her money! Gone are the days where a husband or a father would handle the finances of a wife or daughter. Whenever this took place in the past, all it did was leave that women in a vulnerable position with her finances if that father or husband died. More commonly today women are finding themselves in a divorce and completely lost afterwards because they spent their entire marriage letting their husband control the bank account and other financial matters. 

Today all of that CHANGES!  No longer as women will we sit on the sideline and wish that our finances just fall into place.  We will take the necessary steps needed to control our own money and stop letting our money control us!  So what can we do? First, we decide what we want in life. What goals do we have for our household in the short term (6-12 months) the intermediate (1-3 years) and long-term (5-10 years). These goals which I like to call dreams are the fire to our match and they are going to get us to where we want to be financially. When my family was $48,000 in debt we created our own dreams and we wrote them down on a piece of paper and put it up on the refrigerator so that it could be seen each and every day. Believe it or not that sheet of paper full of our dreams kept us focused the 2 1/2 years it took to pay off all $48,000 because every time that we wanted to buy something we didn’t need we would look at that sheet and say we want that dream more!  After women figure out what they want in their life going forward it is now time to take your head out the sand and figure out if you are in debt and if you are how much debt you are in. The only way that you can begin to become debt-free is to know who you owe money to and how much you owe them. Only then can you take action to pay off that debt!

Getting a spending plan (budget) down on paper is essential because you have to know how much money is coming in and going out each month so that you can start to make the needed adjustments. If a woman finds herself living paycheck to paycheck each month she can start her financial recovery by looking at her spending plan and seeing what she can cut out. Cutting out unnecessary expenses leaves money available in each paycheck to start paying off debt. If after cutting out all that you can in unnecessary expenses you still find yourself struggling financially then it is time to find extra income to pay off debt. That may mean adding extra job or selling anything that you can for the extra money. When we were getting out of debt we sold everything that we could. If people wanted to buy it, we would sell it to them!  We also found out what we were good at which was tennis and basketball and started training kids in each sport for $25/ hour!  Do whatever it takes to find the extra money to pay off what you owe!

Why is it important for ALL women to be debt-free and use their money to work for them and not someone else? The reason is that women on average make $.77 for every $1 a man makes, so we can’t afford not to be in control of our money! Even with the income disadvantage women can still come out on top by controlling their finances.  The secret is to make it up in your mind that you deserve better and you are going to do whatever it takes to get to that better!  No more spending money on stuff you don’t need! No more staying in debt because society said “that is how it will always be!” No more not having an emergency fund!  No more letting someone else tell you what to do with your hard earned money!  Today is the day you say “NO MORE!” 

NOT GOING ANYWHERE

NOT GOING ANYWHERE

A few months ago I read an article discussing the cost of state colleges and how if some of the colleges within a system were consolidated that it would save the state money.  For example in North Carolina there is UNC Chapel Hill, UNC Charlotte, UNC Pembroke, UNC Wilmington, UNC Greensboro, you get the picture. So instead of all of these Universities under one system the state would close a couple of them and incoming students would have to choose one of the Universities that were left after the cut.  Although this idea is provocative enough, what made me pause was that somehow HBCU’s were added to the conversation.  HBCU stands for Historically Black Colleges and Universities and I personally went to the one and only South Carolina State University.  The reason that I paused when the article mentioned HBCU’s is because these colleges and universities had nothing to do with the concept that the article was speaking of and it just seem like HBCU’s were added just as a suggestion that some of these schools whether they are part of the system or not can be shut down too because they are not needed.  I don’t usually step outside of financial literacy advice and I am not going to in this post either, but this article made me start thinking that HBCU’s and the students that attend them have the opportunity to be taken out of this conversation altogether and it starts with financial literacy.

Why financial literacy?  Majority of HBCU’s don’t have large endowments and they depend on donations from alumni along with other resources, but with alumni comes the issue and also the solution.  HBCU’s mostly consist of African American students who come from lower to upper middle income families.  Usually they are able to attend college through student loans, grants and scholarships (academic and athletic) and without this aid a lot of the students would not be able to afford higher education.  So here is how financial literacy can take HBCU’s out of the “elimination conversation.”

If majority of students at these universities and colleges depend on financial aid then one financial mistake small or large could lead to these students dropping out of college.  A student getting a credit card owing as little as $300 can cause them to drop out of college because they have no way of paying that debt off.  Students can lose a grant and that could lead to dropping out.  I met one student at North Carolina Central that before the fall semester even started she found out that she had lost an $800 grant and she did not know how she was going to get the money so she could start classes the next week.  She asked her mother and her mother could not help because she was struggling herself and just like that here was a student with a bright future at risk of dropping out.  I know that there are a lot of stories just like this one at HBCU’s all around the country and the result is the same. Dropping out.  The student dropping out not only hurts them, but it takes future alumni dollars out of the system making the institution vulnerable.  All universities and colleges must start to educate their students on how to handle money so that students can finish college and attain great paying careers.  HBCU’s much teach students not to spend their refund check, not to get credit cards, and not worry about a credit score because little mistakes like these can lead to a student being financially unstable.

I am sure that there are administrators, professors, student affair professionals, deans and so on who are wondering why should we focus on financial literacy?  Because you can’t afford not to!  The goal of financial literacy is not only to keep retention rates up, but it is truly to benefit the HBCU after the student graduates.  The 2012 college graduate left school with an estimated $26,000 in student loan debt.  This does not include the possibility that the student also had credit card debt or a car loan.  If it is not taught in college that DEBT SUCKS and that once you graduate that you need to pay off ALL debt as fast as you can then you end up with generation after generation that just lives a little bit better than paycheck to paycheck.  Alumni that live like this financially DO NOT AND CAN NOT give back to their alma mater leaving the alma mater to fend for itself.  This may not have been a problem in the past, but with state governments more and more cutting back in the budget when it comes to higher education the dependence on donations from alumni will only become greater.  So as you can see current and future alumni are the issue but they are also the solution, but it starts with financial literacy being stressed to them while they are students.  Trust that not a lot of higher ed institutions are taking on this mission and maybe they don’t have to, but as a HBCU alumni I am here to tell you that you can’t afford not to.  It is time to get off the chopping block and to show the world that you are not going ANYWHERE!

Eating Healthy On A Budget

With all the recent talk about Medicare not being around in the future it is becoming imperative that those age 50 and under start taking better care of themselves.  This can be a challenge on many fronts, but two that come to mind are exercise and diet.  Exercising becomes difficult for most because of the lack of will power and determination.  It has been many times I have attempted to get up in the morning to exercise only to roll back over and go back to sleep.  Another enemy of exercising is time.  With the busy world we live in it is becoming more impossible to go to the gym or run around a track.

Now food is a different story all together because majority of people can control what they put in their mouths.  Instead of me eating that piece of pork bacon I could choose turkey bacon or instead of that 200 calorie frappucino that I love I could have a nice glass of calorie free water.  People who try to eat healthy often do find themselves fighting an uphill battle thanks to the inexpensive food and quick service at fast food restaurants.  I can get a cheeseburger and 32oz Sweet Tea for $2 in less than a minute!  Unfortunately sticking to this kind of diet will have me at a hospital in the future fighting for my life.  On the other hand it is a perception out there that eating healthy can be expensive.  So how do you eat healthy on a budget?   James Davis, a reader of the blog recently shared with me a link to a blog about eating healthy on a budget and it gave different foods to eat that are nutritious and not expensive. The article pointed out that the best buys were bananas, watermelons, broccoli, romaine lettuce, turkey and tuna.  It also pointed to eggs, but I would leave those out since eggs lead to high cholesterol.

There are other tips that will help you to eat healthier food.  One option is to buy local at farmer markets where the food is fresh and always cheaper than the store.  Buying local helps you give back to your community as well.  Another option is to buy produce in season because this is when the food is at its lowest cost.  You find yourself paying higher prices when you crave strawberries, etc out of season.  Think about growing some of your own food in your yard if you have one.  A garden is a great stress reliever or even a fun project for the kids to help with.  Last, but not least have a meal plan when you go to the grocery store because if you are able to save on other items you have the option to buy even more nutritious items for your home!  Let me know how you save on the food that keeps you healthy.  Now I must get back to my spaghetti made with whole grain noodles, ground turkey, and turkey sausage!  

Don’t Leave Home Without It!

This blog post was going to be on a completely different subject until my daughter decided to enter this world three weeks ahead of schedule.  All the events that led up to her coming early got me to thinking about personal health insurance and how important it is to have for every individual no matter what age.  The reason that I recommend health insurance for everyone is that one of the most common reasons for bankruptcy is overwhelming medical bills.  Overwhelming can span from a few thousand dollars to tens of thousands of dollars and when people don’t have health insurance they are on the hook legally for every cent.  This second pregnancy with my daughter was filled with extra doctor visits, multiple sonograms, and a maternity emergency room visit two days before she was born. 

Today I received the benefit statements from all of the extra visits excluding the ER visits and they totaled close to $600 and these were all office visits in the last month!  Thank goodness for health insurance because I did not have to pay a dime.  I have yet to receive the bill for the ER visit and her birth, but I know because of the insurance that I don’t have to pay the entire bill, but maybe a tenth of it.  If I didn’t have health insurance her birth alone would cost me at least $10,000!  That type of money you can’t come up with overnight and the hospital expects to be paid as soon as possible for any service and when people don’t pay up the hospital ends up suing and winning.  Eventually the person will end up filing for bankruptcy because they can’t pay.  As far as health insurance goes the age group that goes without it the most are the younger generations ages 18-35 mainly because young people think they have a long time before chronic illnesses hit their body.  They would rather save the monthly insurance premium and use the money elsewhere.  That is a big mistake!  If you can’t afford health insurance currently as a young person it is time to re-evaluate your priorities.  If you have a cell phone, or home internet, cable, etc you may want to cut one of those services off or all of them off and pick out some health insurance because it is to dangerous financially not to have insurance on board. 

In the past two years I have known four people under the age of 32 who have had either a stroke, heart attack, or cancer and I don’t know what their insurance coverage was at the time, but if they didn’t have it they could easily be in the bankruptcy stage by now.  For example the cost of treating a heart attack is $40,000 and that does not include the treatment that it will take such as more doctor visits and extra medication that will follow for the rest of that person’s life.  The cost of treating cancer is even more so there is no reason to take the chance of not having health insurance.  Remember DON’T LEAVE HOME WITHOUT IT!

If you don’t have insurance what are you risking financially by not having it?

WHAT NOW?

It has finally arrived. Not the latest gadget that you bought from Amazon, but your student loan bill.  When that loan statement arrives it is usually the first time that a recent graduate sees exactly how much was borrowed in their name for that college degree. Depending on what university they attended that overall number could be overwhelming.  Even though the number may be overwhelming a lot of these adults just shrug their shoulders and say “I will pay it over the term” which could be a decade or two and then they go out and buy a new car.  I want to change that way of thinking and say why not pay that student loan off as fast as you can.  When my husband and I found out he had a $25,000 loan it was indeed overwhelming because it was as if someone had hit me in the face with a brick!  I thought he went to college on a four year basketball scholarship, but come to find out one year was not paid for and it cost him $25,000! Did I mention that was only for ONE year!  We had to come together with a plan to pay the loan off as soon as possible, because it was no way that we were waiting until 2030 for this weight to be from around our neck!  So what are some of the steps that we took that you can take to pay off student loan debt for good!

First you have to find the extra money to pay off the loan faster, but this is usually where people get stuck and eventually get frustrated because they feel they are living paycheck to paycheck already.  If you have a new career you now have much more money coming in than you did while in college, but where most people fail is that they start spending that new money on an expensive apartment, a new car, dinners out, etc and all of a sudden there is a struggle to pay their student loans.  Here’s an idea, how about living on the same amount of money you did in college? You don’t have to get the best apartment in town, you can drive a paid for used car with no car payments, and the ramen noodles you ate in your dorm room still taste the same so cut back on eating out.  Want to find even more extra money?  Cut off the cable and watch your favorite shows on Hulu.  Reduce the minutes on your cell phone plan and cut off your home phone because neither is needed if you are tens of thousands of dollars in student loan debt!  Next look around your home and see what you can sell.  We sold everything we could from clothes to electronics.  We had multiple yard sales and visited the local pawn shop frequently.  We stopped buying new clothes in fact we didn’t see the inside of a shopping mall for the two years we were getting out of debt.  We saved on clothes by wearing the ones we had longer and shopping consignment and thrift stores.  Last, but not least the fastest way to pay off student loans is to get a part time job because let’s face it you just graduated which means you are still in your twenties and have the energy of a bull! The extra income will lighten the burden and bring you closer to being DEBT FREE!

There are so many other ways to find extra money for paying off student loan debt, but this post would go on forever.  Just remember that all of these sacrifices are temporary and if you are committed to paying the student loan debt off it will take no time to become student loan DEBT FREE!  These ideas will free up hundreds of dollars a month and that extra money should be thrown at the student loan and nothing else.  Trust me it works my husband and I paid off that $25,000 student loan and a $20,000 car loan in 2 ½ years! You can do it too!

What are some of the things you did to pay down student loan debt?

Till next Wednesday!