Black Women, Personal Finance, Lisa Live Well

4 Tips to Break Your Bad Money Habits this Year

Good money habits are not a thing you can learn quickly and move on. These baby steps can make it a less painful process.

It’s easy to financially “backslide” if you are not checking in with yourself. I will personally admit to being a hot money mess for many years before I started some of the practices I am going discuss this in this post and those to come. Like all of us, I am still learning. It’s a constant struggle to keep goals in focus when you want to buy dresses, bottomless brunch, and travel like a rock star… all the time.

It’s a thing no one talks about but everyone struggles with because being broke is not just a problem for the poor (think of all the broke celebrities). The more you have, the more you want. The truth is If you can squander $1000, you can squander $10,000 so let’s break some of these bad money habits before we become ballers. Here are 4 tips you can start today to help you break some of your bad habits: (Warning: Start small is said a lot – because I know yall 🙂 )

Finally… Get a TRUE Budget. I know you think you have one but how effective is it? Budgets typically fail because we write down where we want to be instead of where we are. Example, you may want to give yourself a $200 spending allowance for fun (drinks, eating out, club covers, events etc.) every pay period but in reality, you are spending $450. It would make more sense to determine what you are spending today and slowly move down to your goal of $200 rather than tell yourself that you are going to be able to cut your habit in half within two weeks. So on your budget start with going from $450 to $400.

Then work your way down month by month taking in consideration your budget will not be a one size fits all. Do not set it and forget it. Some weeks/months you may need more money because of planned events and obligations, build that into the process of planning for each month so that every dollar has a planned destination and you are not stressed about not having enough. Once you get to $200, you may still have weeks where you need $450 but determine that ahead of time. The overall point is to avoid those moments where you are scared to look at your account because you have not been paying attention.

Take a spending fast. I did this for the first time recently and it was great. Because I track all my spending, I was able to notice I had fallen back into some habits of eating out every other day. To break the habit, I took a fast on eating out for 1 month. It means exactly what you think – 30 days of ZERO eating out… not even the dollar menu.

The results were great. My diet got 95% better, I picked up some new recipes to make food interesting, started meal prepping and I spent the money I would spend at rushed lunches during the work day on new dresses for the weekend. Ayeee!

You can do this fast for any kind of spending habits you have. For some people its online shopping and others it’s rounds of drinks. If you tend to spend too much at the bar, skip the bar for a weekend or two. If you like to shop, I recommend a shopping fast of nothing new for one month, you will be surprised how much better at personal styling you will be when you are forced to “mix and match”. The key, again, is to start small, fast for two or three weeks and build from there.

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Determine your financial values. Have you ever thought about what you really would like to be doing with your money vs what you actually do? It’s a resource like anything else and it should have a predetermined destination. There is a quote, “If you want to know what people value, look at their bank book.” I am sure I did not get it exactly right but it’s still true. We say it’s important to save, travel and give to charity but what do your habits reflect? I can tell you when I was not paying attention my financial habits said I valued food, party dresses, and debt. My thoughts only began to change when I decided I have to get serious about the experiences I want to have at this age and let the stuff go.

You cannot do it all. Unless you are loaded, you cannot have the $600 car payment (plus the maintenance on that kind of car), go to all the hot spots each weekend, have a bloomies habit and go on the big, memorable vacations.  Pick a lane, girl. Write down your values, start gearing your money to those things and let the other stuff go! You may look good in the nice car and $3,000 bag but if you are barely holding on to it – how good can it be and who is it really for? No shade on the “stuff” people either, you can value whatever you want. These are examples. 

Automation is your friend. Let me preface this by saying automation is your friend if you have enough money to cover all your bills from month to month. If you find yourself living in the “red” on the essentials, I would focus on reducing debt/financial output first. But if you have your basic life essentials covered and want to save more – Automate it! One of the best things I ever did for myself to set up direct deposit into a savings account offline (I can not see it readily).

When you are just starting out – start small with something like $30/ paycheck. Then when you get a raise or a new job with more money increase it before the new money ever hits your account. For example, you have been informed that performance raises are coming and you will make maybe $60 more per check, the week before, increase your savings direct deposit by another $30 or so bucks… guess what?  Now you are saving $60 per check… that is $120 a month.

Also, increase it as you pay off things – maybe you just paid off a credit card, giving you back $100 per month, consult your budget and up your savings even more. Keep doing this – every time you get a bump, bump the savings first. You won’t miss the money because you’re saving it before you have determined its “happy hour” money and before you know it you are living the real American dream… Living on less than you make!

Like a mentioned before, good money habits are not a thing to “get down” on move on, it’s constant tweaking of the process and monitoring your own behavior. You cannot set it and forget it…life is changing and your values will change.

You can start out saving for one thing and have to change on a dime and use the money for something else but how nice is it to have that money parked.  It happened to me – I was saving for a nest egg and found myself needing to come out of pocket for unexpected medical expenses. Its a bummer but I am grateful I even had the money to pull from – and it taught me that I cannot passively save… it has to be intentional and a priority.

In this life we can only control about 20% of what happens to us but if you manage that 20% well, you are in a much better position to handle the other 80%. Saving, among many things, is a big part of that.

Pick a tip or two, and tell me how it worked out for you in the comments below.

Lisa Live Well Blog, Black Women in Personal Finance, Black Girl Magic in Money

Magical Black Girls in Personal Finance to Follow Right Now

Finding your footing in good money management is often about finding representation.

 Some people have close friends and family to help them make great financial decisions and others have to learn from the experts. Either way, one of the best decisions you can make is to find a person who can offer you some frank financial solutions.  In my search, I often looked to online gurus for not just tips but for examples what financial security looks like. The more I heard these passionate women paint a picture of financial wellness, the clearer it became that I was not doing something right. Because this meant so much to me, I have the breakdown on 4 black women in personal finance you can follow right now.  (warning: these “breakdowns” are just my personal assessment of what these dynamic women bring to the space – links available so you can draw your own conclusions)

Money May Guru, Lisa Live Well

Patrice C. Washington

Patrice C. Washington is the author of the book, Real Money Answers for Every Woman and the online guru for all your money needs. She offers coaching and advice on credit, investments, saving more, navigating relationships and money plus so much more. I personally love her perspective on knowing your Money Personality. She is energetic, fresh and passionate about helping us have a more positive relationship with money. Check her out here: http://realmoneyanswers.com/about/

Money May Guru, Lisa Live Well

Tiffany Aliche, The Budgetnista

Tiffany Aliche is all about budgeting and saving. Tiffany teaches credit management, debt management and how to finally save more so we can live out our dreams. She has the heart of an educator and the dedication of a saint. She is a personal fav of mine. Check her out here: http://thebudgetnista.com

3

Kara Stevens

Kara Stevens is a wealth coach and author. Her approach is female-centered and comes from a place of healing. Her perspective on minimalism, both the less stuff and the less debt kind, are refreshing. Kara wants you to do more than just get your money right, she wants you to change your life so you can look at it differently. Check her out here: http://www.thefrugalfeminista.com/

Money May Guru, Lisa Live Well

Marsha Barnes

Marsha Barnes’ approach to money management is both for women and couples which are important because often there are two parties that need to financially come together to “right the ship”. In a world of red bottoms and pricey bags, she is encouraging us to think bigger – avoid bad habits, be smarter about the use of tax refund and be financially savvy! Check her out here: http://www.thefinancebar.com

Its hard to envision yourself in a place without a great example and the women I outlined aim to be that for other women. They all have different voices and approaches so you can find a person in your lane. Bookmark their websites, follow them online … maybe get some coaching for the long term. As always, feel free to let the Live Well crew know which guru you loved and why in the comments below.

 

 

 

Saving Money

How to Save More Money This Year

Chasing the bag is only half the battle, its keeping that will make it all worth it. Save more money with these quick tips.

Whenever people talk about getting financially fit, the first thing they recommend is to save. It’s basically the low hanging fruit of adulting but telling someone with bad money habits to “just save some money” is not the best way to help.

For starters, taking the money you have come to depend on and saving it is a hard adjustment. Even if you manage to get some money put away, it almost always gets taken back out before you have amassed anything real. I was one of these people – you get a few hundred bucks stashed finally and one financial hiccup sends you back to the savings account to retrieve your hard-won savings. It’s a revolving door but there are a few tips that helped me get some money saved and keep it that I want to share with you.

All Savings Accounts Are Not Created Equal. Of all the things I am going to tell you, this the one that was most important to changing my financial behavior. When most people start out they have one savings account and no goal other than to save something. It’s a doomed approach. Instead of having one catch-all account – have accounts with goals attached and segment the money.

For example, you have determined that you can afford to save $150 per month. Instead of directing the total $150 to one account for an emergency fund, break it up to cover multiple purposes. To start, try directing $75 to a mishap fund and $75 to an emergency fund. What is a mishap fund? It’s a savings account for things that are inevitable but low level like car repairs, covering unexpected bills, traffic tickets, etc. The biggest threat to our savings account is always the mishap stuff, right? So plan for it. Keep this account at $500 – $1000 (more if you can or have a family… cause kids).

Then you can take the other $75 and have an emergency fund for the really big stuff like a loss of a job or illness (it’s untouchable otherwise). As you earn more you can have more accounts with other goals like a travel fund.

The point is to save for the smaller things that used to wipe out your total savings and still have money for the big issues should they happen. Yes, it will grow slower but at least it’s happening and because you have a fund for that traffic ticket or blown out tire, they will not devastate all your efforts. 

Automate it. The worst way to start to save when you have never done so before is to assume you are going to move money manually. It’s 2018 and a better life exists so get with it. Set up a direct deposit to a savings account with your bank or employer. It’s super easy and on payday, you will have saved money before you buy that round of drinks at happy hour! For more on this read my post, 4 Quick Ways to Break Bad Money Habits.  

Pay yourself FIRST… no… really. When I say pay yourself first, I mean when you get more money put more money away before you determine that new car is “doable”. The worst mistake we make is spending more because we make more.

At this age, we are relatively early in our careers and just starting to climb the ladder and with that comes more money.  Once you have gotten out of the check to check and value meal phase of your life – start to think about how much more you are spending with every increase. Enjoy the spoils but remember the more we earn, the bigger that 6-9 month emergency fund should be.

I am under no illusion that this goal is easy to reach but it took me 8 years to be laid off one time. Think about that, for 8 years I could have been putting away money every paycheck to get to this emergency fund. Start working towards this goal today, even if you only get to 2 or 3 months – at least you know for 2 or 3 months you are ok

Like many of us, it took me a long time to realize I was living life wrong financially and I have still not mastered it (I do not expect to either). It’s hard because the older you get your needs change, you want more – you tell yourself “I deserve this”… more. The turning point for me was being faced with medical bills and later being laid off as I mentioned. My head was totally in the sand – I looked around and noticed I was maxed out and blowing money fast on things I either could not remember or was bored with already.

When you are thinking about your goals for 2018 making sure you have a plan to save more is critical because it supports all other goals. New businesses, better travel, better fitness all work better when you have made plans to be able to afford them.

If you have used these or other methods to save more in 2018, let us know in the comments below.