Diversity Woman Magazine

SUM 2017

Leadership and Executive Development for women of all races, cultures and backgrounds

Issue link: https://diversitywoman.epubxp.com/i/813543

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Page 43 of 51

DW Life > 42 D I V E R S I T Y W O M A N S u m m e r 2 0 1 7 d i v e r s i t y w o m a n . c o m Since there's no immediate or obvious re- percussion for missing your savings goal each month, it's important to treat it like a bill, says Woroch. 5 Fight temptation Automate your saving. Check with HR about splitting your direct deposit to divert a portion directly into your savings account. Alternatively, set up a recurring transaction to move a set amount from your checking ac- count to your savings ac- count at the same time you get paid. Because it's happening automatical- ly, you never really "see" the money—it's like saving money you didn't know you had, compared to looking at your ac- count balance and making a conscious decision to move money into savings, points out Kerri Moriarty, head of company de- velopment for Cinch Financial. It won't hurt either to set up a sav- ings account at a different bank than your checking account. "Since there are two banks, you won't see your savings account balance when you check your checking account balance, making it less tempting to pull from savings into check- ing—which is harder to avoid when both accounts are conveniently in the same place," she says. 6 Avoid lifestyle creep If you get a bonus or raise, ignore the impulse to reward yourself with a buying spree or upgrade to a more expensive apartment or car. If you do that, you lose out on an opportunity to save money that you won't even miss. Similarly, try not to view loans or debt as temporary expenses. "If you're used to living without the money that you put to- ward debt, and don't view it as a tempo- rary expense, it will be easy to transition over to saving that money once you've paid off your debt," says Rianka Dorsain- vil, president of Your Greatest Contribu- tion, a financial planning firm. 7 Chip away at debt For sure, many people are saddled with debt, and for them saving seems impossible. Come up with a plan to get that debt under control. Tackle the card with the highest interest rate first. Pay as much as you can, but not at the expense of other bills. Next, concentrate on the card with the second-highest rate and so on, until your debt disappears. Be fastidious about paying your bills on time. Late fees are a huge waste of money and really add up over time, not to mention the negative impact on your credit score. For many people, the inability to systematically pay down debt is more a psychological issue than a financial one. ose who tend to max out their credit cards are at high risk to do the same once debts are repaid. It takes a shift in how you view debt to break the cycle of poor spending habits. "You'll hear many success stories from individuals paying off large amounts of debt, often using different strategies," says omas Walsh, certified financial planner, client service and portfolio manager, Palisades Hud- son Financial Group. "It is important you look within and face your debt fears so you can begin to understand what caused you to fall behind and what will get you back on track. What may seem like the most effective strategy on paper may be unsuccessful in practice if psychological limitations keep you from sticking with a plan. Find the strategy that you can live with both financially and psychologically, then stick to it." 8 Look for creative ways to save Set up a side gig and direct all earn- ings to savings. Tutor or do yard work. "Uber isn't the only side hustle out there," says Moriarty. "If you earn money for anything, like consigning clothes on Poshmark or Tradesy or running an Etsy shop, direct all the money you earn di- rectly into your savings account." Redeem credit card rewards. Check your credit card statement to see how many reward points you have. en visit the rewards website to find out if you can convert the rewards into cash or gift cards. "Some credit cards even double the value of rewards at specific retail- ers," says Kevin Gallegos, vice president of Phoenix operations for Freedom Fi- nancial Network. Don't stop to applaud yourself for be- ing a pro at coupon clipping. Go one step further: take the savings and add them to your stash. By all means, don't spend the savings on something frivolous. 9 Spend with cash to save cash Cash is still king. Use it. Research shows that people who do not use debit or credit cards are less likely to throw that extra item into the shop- ping cart or make an extra purchase and typically spend 15 to 20 percent less than when using a credit or debit card. 10 Qualify for your company 401(k) match If your company offers a 401(k) with a match, do your best to contribute the maximum amount the company will match. Consider it free money and an easy way to increase the amount you put away for retirement each year. "If your company matches up to 5 percent, try to contribute 5 percent from each paycheck," advises Moriarty. "If it matches up to $3,000, try to con- tribute the full $3,000. Anything less leaves that money on the table—and you lose the time that lump sum amount has to grow!" Remember, sacrifices today will yield rewards tomorrow. Says Gallegos, "e whole idea of budgeting, saving, and managing your money is to be able to achieve your life goals. Saving allows you to have the option to pursue more of what you want, when you want." DW Sheryl Nance-Nash is a freelance writer specializing in personal finance, small business, and general business.

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