Years ago my husband told me that I wanted people to pay me for my professional services and knowledge, likewise, I should return the favor and pay people for their expertise. As I plan to leave a financial legacy for my children, I heeded his advice (shhh…don’t tell him) and sought out someone smarter than me on the subject. Enter, Latrisa Pugh, founder of the Educational Cash Flow Youth Program and the brains behind the blog Makes Cents. My approach was wide open – “Hey lady, how do I save a substantial amount of money for my kids’ future?” Apparently, I was a bit too broad in my request. However, she was patient and walked me through a more streamlined process. Here are a few nuggets that I picked up along the way (and obtained permission to share).
1. Ask Questions First
· What is the goal? Be specific.
· How do you want to do that? There are many ways to approach it. What options have you heard of and explored?
· Where does your family currently stand in regards to finances? You must ensure that you’re good in your current state before saving yourself poor for the children’s future. No sense in paying for your kids to go to college if you don’t have your own later life provisions in place.
· Where/how are you currently spending your money? Bills are predictable so where’s the rest going.
2. Make a Budget
· Make a monthly budget.
· Write down the bill due dates and pay periods BEFORE you get paid.
· Set aside at least an hour and think of all possible expenses (bills and seemingly random).
· Give every penny a place to go.
· Put savings in the budget.
3. Create an emergency fund.
· This should be 3-6 months of expenses.
4. Tackle Debt & Savings
· Create a plan to pay down your debts.
· Move your savings somewhere you can’t look at it daily and have to make a little effort to make a withdrawal.
I was so excited about creating a massive master plan for my kids. I anticipated some highly involved investment into some savings plan to get started. But the truth is, it was much simpler than that. It turns out that, creating a plan for your own financial stability is the best foundation you can create for your kids’ financial legacy. You are their first teacher on finances, and they learn most by observation. Do you have an attitude at certain times of the month that is not attached to your hormones? Are you reckless with your spending? Does stress accompany you on every store visit? Finances used to be a major stressor for me because I lacked knowledge. However, admitting my shortcomings and seeking advice from knowledgeable sources has empowered me to know better. When I know better, I do better. And when I do better, I am better.
To get started, pop-on over to Latrisa’s blog and subscribe. She’s currently in a series on Managing Debt. No this isn’t a paid plug, it’s literally me being generous and not keeping the knowledge and freedom to myself. I want you to live authentically in your finances too. Remember, authenticity in EVERY area of life is what it’s all about.