As initially promised when I first began Money Mondays on my blog, I have a special treat for you from a fellow Jackson State University College of Business graduate, Andrell Harris. As often stated being financially well is a part of spiritual wellness.
See what Andrell had to say about getting your money right:
When I was in college, I met
a young lady who was in debt to the tune of tens of thousands of dollars. She
was only a sophomore, about 20 years old, so why did she owe so much money?
Like many of us, the promise
of “easy” credit lured her into buying things she couldn’t afford. She pulled
out her credit cards to fund shopping sprees and lavish vacations, and now she
couldn’t make her minimum payments. She didn’t have health insurance, and an
unexpected illness resulted in hospital bills that she couldn’t afford to pay.
Being well doesn’t just mean
having a healthy body. All kinds of stressors can affect us, including having
mountains of debt. Money issues are among the top reasons couple argue and
split up, and anyone who has been hounded by debt collectors will tell you how
much fun that can be.
Ultimately, a debt-free life is the best financial position to be in. If you have
debt, work to pay it off. If you don’t, work to save money, not just for
retirement, but for those unexpected expenses that are sure to come up. When
you’re 70 and retired with a decent nest egg and don’t have to work at Walmart,
you’ll be happy you learned to embrace financial wellness.
Here are a few quick and easy
paths to wealth that actually work. You hear the pitches all the time,
promising six-figure earnings in a month and continuous, unlimited earnings
forevermore by working for only an hour a day. These programs may have worked
for few (probably the folks selling them), but unless you win a lottery, the
route to wealth is usually through hard work. You should be persistent, keep
learning, be willing to take considered risks and cultivate outside-of-the-box
Make a budget. To reach a goal, start by knowing
where you are right now. Many people fail financially because they have no idea
how they spend their money or even how much they bring in. Set your financial
goals and stick to them like your life depends on it.
To begin, track your income
and expenses for a month. Once you know what you actually earn and how much you
spend, a budget can help you live within your means. Keep tracking your income
and expenses, and adjust your budget accordingly.
Small budget adjustments can
give big returns. Instead of eating out every day, for example, take your lunch
to work three or four days a week. You may save $20 to $50 a week, or up to
$200 a month.
Pay your bills on time. You start building your credit the
moment you open accounts such as cable, phone, electricity, automobile loans
and credit cards. The best way to build credit is never to get behind on your
monthly bills. Once you are behind, creditors will charge late fees and
increase interest rates. Plus, companies report negative information in as
little as 30 days. You may dispute negative information, but some companies
won’t remove it until years later.
These days, good credit also
gives you an employment advantage. Many employers evaluate your
creditworthiness when making hiring decisions.
Pay off your credit
accounts. I can’t say
enough about this. Credit card and store interest rates can be exorbitant. If
you only make minimum payments, it could take years to pay the smallest
amounts, even if you never charge another thing. You’ll end up paying much more
than you actually borrowed.
Here’s a plan: First, figure
out how much you can afford to pay on all of your credit accounts combined.
Then, beginning with the smallest amount (or the highest-interest account), put
the bulk of your available funds into paying that one off first, making minimum
payments on the rest. Paying off the smallest bills first will give you a
psychological boost and keep you motivated. As you pay off an account, cut up
the card (cancelling an account can hurt your credit rating), and apply the
money that went to paying it off to the second largest amount. Rinse and
repeat. It may take a while, but the peace of mind you’ll gain and the money
you’ll eventually save is well worth it.
Once you’re free
and clear, only charge what you can afford to buy with cash. Instead of
charging items you can’t afford right now, save until you have the cash and
then use your credit card as a short-term, interest-free loan.
Make it your goal to pay off the card every month. This practice will help you
build and maintain a decent credit rating without accumulating debt.
Don’t be afraid of credit
cards. They can work to your advantage if you use them appropriately.
Open a savings account for emergencies and another for those
high-dollar items in your future; set up automatic deposits to savings with
every paycheck. You’ll be surprised at how quickly even $10 or $20 per paycheck
adds up, and how little you’ll miss the cash if it never hits your checking
balance. Then, when you need the extra cash, you won’t be tempted to run up a credit
If your employer offers it, participate
in an employer-matched 401k plan. Make your goal to save at least the
matching amount, if not more. Talk to a financial expert to see if other types
of tax-deferred savings plans such as IRAs are more appropriate for you. In
addition to helping you save for retirement, for high earners, these plans have
the potential to put you in a more favorable tax bracket.
For those under 30, experts
recommend putting at least 7 percent of your salary into a 401k plan. As you
get older, increase your contributions. At 40, you should be putting as much as
10 percent to 15 percent of your salary into your 401k. That may seem like a
large amount, but again, as you get accustomed to it, you will not miss the
Tips to Save More
• Challenge late fees
from credit cards and insufficient funds fees from banks. If you’ve been a good, long-term customer,
creditors and banks will usually offer this as a “customer courtesy.” (Remember
those words.) Be persistent and demand more from your customer-service rep.
Many times, reps will waive fees just to get you off the phone. Others have
quotas for fee waivers. If one won’t waive the fee, hang up and call right
• Ask for lower interest
rates on your debt annually. If you have made your payments on time,
creditors of student loans, personal loans and even credit cards may lower your
rates. They may only go down by a fraction, but in the end it will save you
• Invest. If you are
an amateur, research investments carefully with reliable sources, or seek the
advice of a professional. Some
investments are riskier than others, so it is important to know exactly how
much you can afford to lose should the investment turn sour.
• Ask your cell-phone
service provider to waive or lower charges for overages. Cellular providers
are usually good about giving discounts if you periodically go over your
minutes. Call and ask the provider to waive or lower the extra fee, using the
phrase “customer courtesy.” The only industries that consistently will not
waive fees are energy providers; they know you probably don’t have any
competing companies to go to.
• Never pay full price.
If a vendor won’t lower his prices, check out Internet sites for discounts. You
can save money with daily-deal sites like Groupon, but be realistic: Spending
money for something you’ll never use from a place you’ll never get to is not a
bargain. For big-ticket items such as resort stays, make sure you’re actually
getting a bargain by contacting the seller directly. You may be able to get the
same discounted rate through other programs such as AAA or your employer.
• If you can afford it, choose
higher health, homeowner and automobile insurance deductibles. The key is
being able to afford the higher out-of-pocket expenses. A higher deductible
(the amount you pay before insurance kicks in) will lower your monthly
Do the math, and choose
wisely. Often, especially with health insurance, high-deductible plans also
offer limited benefits. Find out if the deductible is cumulative or per
incident. Sometimes, the difference between a $500 and a $1,000 deductible is
worth it. If you have to put $1,000 on a credit card, it’s probably not.
Follow Andrell on facebook: https://www.facebook.com/pages/Andrell-D-Harris/315561731917212?ref=br_tf