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Monday, July 23, 2007

Financial Savvy for the Young, Christian and Clueless

If you’re like me at all, perhaps you thought you didn’t need to worry about finances because you were going to marry a nice Christian guy and raise children while he worked. You grew up watching reruns of "I Love Lucy" and similar sitcoms with a running commentary about wives over-spending. I am still waiting for the right guy. If you are are either male or a female around 25, you may be thinking that this doesn’t apply to you at all. Guys have a responsibility to themselves and to their futures to learn about finances. When children come into the picture, it's still usually the man who continues working, though I do know some stay-at-home daddies who married CEOs. We ladies have to be realistic that even if we do meet someone special, we may end up divorced or widowed. My grandmother was lucky. She has been a widow for the last 26 years and my grandfather planned well. She never had to work a day in her life and can still pay her expenses from his wise investing. Times have changed since they married. Society both allows and expects greater responsibility from the ladies. But both men and women need to become financially savvy.

The pastor at church I attended during high school preached 1 sermon about money. All I remember is the pithy saying, “If your outflow exceeds your income, your upkeep will be your downfall.” While what he said is true, he didn’t give practical steps. On the opposite extreme, I have been thoroughly confused by most of what money guru Suze Ormon says about managing and investing money because it was so far beyond a stage that I could even imagine. But there are a few basics that can improve meager finances.

  1. Know your fixed expenses. Perhaps singing too many high notes in the church choir have rattled my brain, but keeping every minute detail of spending is an overwhelming concept for me, much like the food diary that we all forget to keep. I thrive on guesstimates. I found calculating my monthly fixed expenses (things I couldn’t live without) a much simpler way to start. I mentally erased that money from my account and made everything else a bonus. Any time your situation changes, just make a new list of fixed expenses...........

    -$300 Tithe
    -$720 Rent
    -$55 Cell phone
    -$300 Car payment
    -$120 Car insurance
    -$80 Gasoline
    -$40 Electricity/Gas
    -$39 Gym
    -$176 Student Loans (SallieMae allows you to defer payment easily online if you are struggling financially)
    -$300 Lunch ($10 a day rather than carry anything)
    -$280 Voice lessons
    -$50 Dating service (Keeping hope alive internet style!)
    -$20 Coffee card (Sets a latte limit, but still allows for enjoyment.)
    -$2,604.00 Total

    Perhaps you have a hobby that you can’t live without doing. Make sure it’s in the budget so that you expect it. I’m a singer. I can’t live without voice lessons. While I was in New York City, I did a work exchange program at my voice studio, so my voice lessons ended up being free. I enjoy dance and my gym offered a lot of dance oriented classes which kept me going to the gym. Fitness is important to me, so I am willing to pay for it. Perhaps you don't feel like a man without playing golf every week. Perhaps you don’t feel like a woman unless you have a facial, mani, pedi once a month. I've even seen Metrosexual guys who really love that. Personally, I would rather save by doing my own nails, but that could be why you have a boyfriend and I don’t. Hmmm… I'll let you read my other stuff to decide on that. LOL.

  2. Reassess. Optional step. For example, if I'm only making $36,000/yr, I better cut something! Maybe coffee or maybe I should pack my lunch!! At the end of the year I don't want to think that I gave $240 to partake of my daily Devil's Cup! Maybe I only need $5 a day for lunch. Maybe I can get by on 2 voice lessons instead of 4. Write your new budget.

  3. Earning no interest on your savings and checking accounts isn’t good enough anymore. Your money can work for you, even without locking it away in some CD, IRA or whatever confusing thing you don’t understand. Online banks are rising in popularity, especially in our tech savvy generation. I researched online and found that banks offer up to 5% APY (Annual Percentage Rate Yield) something that I thought was a thing of the past. The banks link your new savings account to an existing checking account so you don’t have to change banks or give up friendly service. Some banks even offer a bonus to sign up online after you’ve had the account for 3 months.

    I feel a great loss over the years I wasted banking. Sometimes I was lured in by a free tshirt and a “free” college checking account. In return, they got to play with my money for free. I earned no interest for many years. When I moved to New York and changed branches, they gave me a pen with my name engraved on it as an apology for sending my checks to my South Carolina address. My rent check was late. My roommate was angry. I looked like a flake. They also forgot to switch my debit card to the new account. It took forever to straighten out that mess. I’m sure we could all do without that drama. All that was for an account that didn’t even earn interest!

  4. Stop using your credit cards if possible and never carry a balance. Save credit cards for emergencies. If you have read them, the Shopaholic books are seriously funny; but not in real life. You can use your debit card just as easily as a credit card, so there is no need to run to the bank or an ATM. Just make sure you know what you spent and how much you have left in your account! Even if you pay credit cards off every month, it still looks as if you are carrying a balance. This can hurt your credit rating in the future. I am telling you this to spare you from the embarrassment I suffered getting turned down as a co-signer for a lease on an apartment and the pained expression I got from the apartment manager. Worse, when I was doing a credit check for purchasing a condo, I didn’t hear, “How great, you pay off your accounts every month.” I heard, “Oh, it looks like you carry really high balances.” My reply, “But, I pay them off every month,” didn’t help my credit score one bit. That scared me into getting real control over my spending.

  5. Get free credit reports from all three credit reporting agencies—Experian, Equifax, and Transunion at http://www.annualcreditreport.com/, look for discrepancies and write to them when you find something incorrect. You can also get free credit reports by calling 1-877-322-8228. See your credit score on FreeCreditReport.com

  6. Start reading about finances. Banks often give free information on their websites, Suze Ormon has lots of advice for beginners in The Money Book for the Young, Fabulous and Broke. Another place to start without spending anything more than you already do for internet access is to check out http://www.mymoneyblog.com/ which is run by a guy who just tells what he did to save his money. Sites like Wikipedia also do a great job of explaining just about anything you might like to know about finances. Learn about finances from a Godly perspective by visiting http://www.crown.org/. My church in New York has made financial assistance part of their ministry. They help people with real money and they help people learn how to get ahold of their finances through this ministry. You are also welcome and definitely encouraged to keep reading my journey to financial savvy. Save me in your favorites!

I will let other gurus and advisors tell you more about prayer and tithing. I feel that the greatest stress for us YCCs comes from not knowing where the rest of our finances are going. I have gone from Young, Christian and Clueless to an Junior FSSC (Financially Savvy Single Christian.) Once I knew how much was going out in fixed expenses, I felt relieved. I even started to be able to save a little and tithe. My credit score went up from not using my credit cards. I disputed old accounts and had things removed from my credit reports. It would have been helpful to know about checking accounts that actually earn interest or savings accounts with higher interest yields sooner, but its never too late to learn. I still don’t understand everything the money gurus have to say, but I’m OK with that. I will learn more over time. Of course I’m still hoping and praying to meet the right guy!! But now it will be 2 FSSCs joining our Savvy portfolios together.


stanley said...

Agreeable with what u said, how wish I can read yoyr article earlier. keep it out, check out my blog at http://blogpower-stanley.blogspot.com

Calista said...

I pray that u find right guy who thinks your way!


Josh (musarter) said...

Christianity is a romantic view of life. You seem to have a romantic view of the world and relationships. You seem to be awakening to reality that God is a romancer but the world seeks to destroy romance.
It is romantic to beleive every christian woman will find a "Prince Charming" who is hansome, financially secure, emotionally attached, and devoted completely to God. The reality is you will be lucky to find a man who posses even one of these qualities.
When I got married I only possed a devotion to God and it is the only thing that has sustsained my marriage. I have learned to be emotionally "there," and grown to be more finacially secure.
My wife married me knowing full well that finances would be complicated and an adventure being that I am an artist. It took six years and now she does not have to work but she does a little to supplement our household income.
To complete my novel I suggest that you find a man that is devoted to God, even if he has shortcomings, becuase he will grow with you. Don't beleive that you can change someone, only God can do that. Become knowlegable about finances becuase you may have to carry some of the burden.

D said...
This comment has been removed by the author.
D said...

Josh--I hope the financial advice was helpful. What you said is exactly why I wrote it. I too have been an artist.

I am totally OK with imperfection, I am not OK with severe character flaws like lying or still being married.

Before judging, please read:
Confessions of a Serial Dater
Dates from Hell -- The Accountant