Financial Balance

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We are smack dab in the middle of the year and as we enter into those lazy days of summer it’s probably the perfect time to take a quick review of our financial priorities and make use of some helpful reminders while we’re not so pressed for time. Because for some of us parents, we know all too well, once school is back in session it’s practically survival of the fittest. And even if you’ve mastered the time crunch of your schedule, the second half of the year comes draped with preparing for the holidays and year-end financial obligations that often times tend to create financial frenzy.

So, with the middle of the year also comes this June gloom that we’re experiencing in Los Angeles; it is the perfect balance in weather (for me at least), and often unappreciated. It’s typically the calm before the sweltering heat of the latter summer months. I’m sure you’re wondering how I went from talking about financial priorities to weather, but just bear with me, I’m making a correlation here people!

The best part about June gloom is that for every balanced weather day (not too hot and not too cold) means one less day that we have to endure the heat or mitigate the temperature with our air conditioner on high 24/7 – which can be costly. Likewise, there is importance in understanding the opportunity of creating financial balance. For every day spent creating a tolerable financial landscape, means one less day that you have to endure those inevitable financial hot spots (that was your Aha moment). That was deep huh? But it really doesn’t have to be that deep. Let’s take a look at a few ways that we can optimally create a level of comfortability within our own personal financial oasis.

Create, and maintain a budget. For many of us when it comes to managing money it goes back to the old adage: failing to plan is the same as planning to fail. I get that many of us have faced – or could be currently in- a situation that makes us want to turn a blind eye. But, ignoring our financial picture creates a perpetual cycle of falling short. You’d be surprised at how much is uncovered with just merely writing things down, or in this day and age –plugging your dollars in and dollars out into one of those trusty apps. I’m a bit old school when it comes to this, and still prefer to use a notebook; to each his own. And Keepers, after we’ve gone through the task of facing our financial situation head-on, don’t just shove your hard work into a drawer or file it away with other unfinished projects. We’ve got to have the discipline to put it in action. Sometimes a “money buddy” can help with accountability.

Take advantage of automatic paycheck deductions. First and foremost this ensures that you pay yourself first when it comes to retirement and savings. And can also be extended to your monthly bills. Out of all of the tools to utilize, this is by far one of the least tedious and easiest to leave on autopilot. Once its set up it’s amazing how you will learn to live on the final balance you receive. I’ve even extended this tool to tithing and satisfying my community or non-profit contributions. It’s suggested to allocate at least 20% of your income to your financial priorities: debt payments, retirement and savings. Using the 50/20/30 rule goes a long way (50% essentials: housing and food, 30% lifestyle – I get it, a 30% lifestyle may be hard for a lot of us – I mean the “Joneses”).

Refuse to just pay the minimum on your credit card bills. This is a case for the least you pay up front, the more you actually pay long term. Making minimum payments each month only ensures that you pay the maximum interest. Keep your credit use below 30% of your total available credit; its good practice to use your credit card to buy things only if you can pay it off in full at the end of each month. Remember, credit is a tool used for proving yourself and ability to manage your finances; it’s not free money (as I digress into talking to my 18, 19, and 20 -25 year old self). Use responsibly.
Speaking of credit… review your credit report and score regularly. What’s on your report (or not) may have an impact on your score that’s less than desirable.

Lastly, be specific in your goals. Use numbers and dates, not just words, to describe what you desire to accomplish financially. Establishing these intentional patterns will provide a level of financial security that you are personally comfortable with. After all, you’ve earned it.

-Drea

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