This is part of a sponsored collaboration with Prudential and DiMe Media. However, all opinions expressed are my own.
As soon as I landed my first job as a merchandise sales clerk at a popular Southern California Amusement park, my mother drove me to our local bank to open up a checking and a savings account. Much of what I learned from my parents has helped me navigate everything from social situations to work interviews. But the financial advice my mother instilled within me has become invaluable. Had she not impressed upon me the importance of budgeting, saving, and prudent spending, I may not be sitting here today as a woman who has owned and managed a small business for nearly ten years.
Perhaps one of the most difficult parts of “adulting” is managing finances. Every facet of my life is touched by finances, so it makes sense to approach the subject purposefully. During Hispanicize’s DiMe Summit, I sat down with Prudential Financial Advisor Migdalia-Meg Morales and learned more about the small business aspect of finances than I had collected over the past ten years. If the topic of finances feels intimidating, you may benefit from speaking with a Financial Advisor. Additionally, Prudential’s website has an expansive selection of tools and resources which span a variety of topics including college savings, life insurance, investing, retirement, and much more. Prudential’s goal is to empower women by providing the tools and education necessary to make the right decisions for themselves and their families.
As a second-generation Puerto Rican woman living in Southern California, I’ve had to be diligent about understanding my finances and then choosing to take control. For many Hispanics, there is a disconnect when it comes to financial planning because of a lack of awareness and familiarity. I have found that educating myself and putting that education into practice has helped me better understand my finances. Admittedly, this is a work in progress. As a freelance, small business owner budgeting and saving can be tricky. A prudent approach to finances has ensured that I always have a buffer in the event of a financial emergency.
During Hispanicize, I spent an extended amount of time at the Prudential booth with the goal of learning as much as I could.
The information was vast, so I thought I would share 5 Financial Tips That Will Change Your Life.
- Create a budget and stick with it. It is practically impossible to manage finances without an understanding of how the money you receive is spent. The concept is simple…balance how much you earn with how much you spend. You can get started by using Prudential’s Slice a Budget tool, which will help you find the right balance of spending and saving. Then begin tracking everything you spend for a month. Don’t forget to include rent/mortgage, groceries, utilities, health insurance, credit card payments, special occasions/holidays, and splurges.
- Have a savings that will cover 6 months of living expenses. Earlier this year, I got into my car as I normally do and noticed a small crack on the driver’s side of my front windshield. Like so much of what happens in life, I was NOT expecting to have to replace that windshield. So I waited. And it spread. As one of the many hazards of driving, this particular incident was not covered. If I lived month-to-month, I would not have had the money to replace that windshield. There is never a good time for an emergency and it always feels like those things happen to other people. And yet, accidents, emergencies, car and home repairs are a life reality. If you do not have 6 months of living expenses, begin saving by putting off spending on larger purchases, reducing discretionary spending, paying down any debt you may have, and schedule paying into your emergency fund like a monthly bill. Learn more about How to Disaster-Proof Your Financial Future.
- Save for college without sacrificing your retirement savings. It isn’t uncommon for Hispanic parents to put their children through college at the expense of their retirement. Prudential advises parents to be cautious about over-borrowing money to cover children’s college costs. Student loan debt can have a dramatic affect on retirement security. Two million Americans 60+ carry the debt of unpaid student loans for themselves or their children. Start saving for college early through state education plans like California’s 529 plan. It is also important to understand the financial aid options available including grants, work-study programs, and low-interest loans. Learn more about How to Pay for College Without Sacrificing Your Retirement.
- Start saving for retirement now! Did you know that 70% of Hispanics in the US do not have a retirement account? For many of us, retirement feels like a lifetime away. Additionally, Hispanics often lack of awareness and familiarity with options for retirement savings. Add in the expense of caring for multigenerational families, paying for college, household expenses, and health care and the result is a culture of people who are at risk of not having any retirement savings. Your retirement income will likely come from workplace or individual retirement accounts, Social Security, personal savings and other sources. Begin by approaching your human resources department to discuss the retirement options available to you. If your employer does not offer retirement benefits or you are self-employed, consider a traditional IRA, a Roth RIA, and/or myRA.
- Consider working with a Financial Advisor. During my time with Migdalia, she helped me understand the importance of setting up an S corp, particularly when it comes to tax advantages. A Financial Professional will take a holistic view of your finances to develop a financial strategy. This can include your budget, investments, debt management, cash flow, insurance, college planning, business strategies, and more. If you feel you do not have the time or knowledge to organize your finances, consider working with a financial advisor.
If you are overwhelmed by the thought of managing your finances, I encourage you to visit Prudential to begin educating yourself on the topic. It felt like a weight was lifted off of me once I began to understand my own finances and started the process of budgeting and saving.
Do you manage your finances? What is your biggest challenge? I’d love to share your challenges and insights below.
Sharing my financial goals with @Prudential #PruPact #Pruparate #ad #hispz17 pic.twitter.com/PS1DIhM838
— Caryn Bailey (@rockinmama) April 3, 2017
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