Financial – Page 3 – The Big Words Blog Site

Investing some of your earnings

The first financial decision you could make to help yourself down the line is to invest some of your earnings. This is something you should do on a continuous basis if you want to increase your wealth; it’ll bring you additional forms of income on top of your existing salary. And there are plenty of different investment routes you can take as a beginner. You might want to do some research on getting started in the property market. With the correct guidance and management advice, you could start buying properties to lease them out (that’d bring you a nice monthly income). You could even buy properties to fix them up and sell them at an increased value.

Of course, there are plenty of other ways to invest your earnings, too. Getting involved with trading can be very profitable if you do your research and learn how to monitor market trends carefully. You might want to consider spread betting over traditional trading methods. Earning tax-free profits is just one of many reasons to trade this way. Investing wisely is the type of financial decision that could really help you down the line. You’ll be able to start building up some savings for the future.

Creating an emergency fund

Another financial decision that will help you down the line is creating an emergency fund. We all face unexpected costs at different points in life, so it’s important to have a backup plan in place for just such occasions. Your budget can only account for regular and predictable expenses, but you should also set aside a little bit of money on a regular basis for emergency costs. For instance, your house might need repairs after a natural disaster, or you might need emergency financial support if you leave one job and start searching for another. Creating a backup fund now could really help you further down the line. You don’t want to dip into your bank account for emergency costs and find yourself low on funds for necessities. Getting the right life insurance will also offer you some protection, should something happen to you. You can always read about PHP Agency reviews online, if you want to learn more about the process.

Legal battles can be just as devastating to your bank balance as medical bills or job loss, yet few households budget for them in advance. Imagine being involved in a traffic accident that escalates into criminal proceedings or having a young adult in the family make a single bad decision that suddenly puts the entire household on the hook for bail, court fees, and months of lost wages. The costs can snowball quickly, forcing people to drain their emergency funds, sell investments, or take out high-interest loans that sabotage long-term goals. That’s why smart planners treat legal protection as a financial hedge. Set aside a small portion of your “rainy-day” money for potential attorney retainers and, just as importantly, research reputable counsel before you ever need it. Partnering with a top criminal lawyer gives you immediate access to expert advice, negotiated fees, and proactive defense strategies that can shorten proceedings and curb expenses. Even if you never need to make that call, knowing you have a vetted professional in your contacts provides priceless peace of mind and keeps the rest of your financial plan intact today.

Spending your money sensibly

This final suggestion is possibly the most important. If you want to improve your financial future then you should simply improve your financial present. By making a proper budget, you’ll be able to start tracking your expenditures accurately and making smarter decisions with your money. Calculate the cost of your essentials, and figure out how much income you need to devote to those necessary expenses. If you barely have any remaining funds then you could start reducing your basic costs in smart ways. For instance, you could save money on groceries by using coupons and start using price comparison sites to search for better deals from energy providers. You could reduce your monthly expenses if you did a little research. And it’ll benefit you in the future if you have more money to set aside for your savings.

One of the principles of my blog is the “Teaching of Wealth Building and Financial Literacy”. A key component of Financial Literacy is understanding debt – specifically what happens when you carry too much of it. I painfully learned what it’s like to carry exorbitant amounts of debt – a place I hope never to return to. The featured image of this post is the exact same American Express Gold Charge Card which was a critical piece in my debt journey. The image of it will always hold a special significance for me – a reminder of what not to do.

My Inspiration For Writing This Piece

I got out of debt because some friends graciously shared Dave Ramsey’s “Financial Peace University” with me. While there are supporters of Financial Peace University and Dave’s “Debt Snowball”, I found that there are also detractors and critics. I wrote the following piece on the Examiner in early 2016 after someone else wrote an article about why she quit her Debt Snowball. I didn’t write this to rebut the author in a confrontational way or to discard her experience altogether, but instead to share an alternative perspective. By the way, to read about how to prolong your Debt Snowball, see my Mother’s Day 2017 blog post.

Giving Up On Dave Ramsey’s Debt Snowball

Over the holiday season, an article appeared on my Twitter feed from another passionate Financial Literacy writer (there are many) entitled, “Why I Gave Up on Dave Ramsey’s Debt Snowball”. Being a coordinator within the Financial Peace University ministry at the Alfred Street Baptist Church, and also in the final stages of my own Debt snowball, the article resonated with me and prompted the crafting of this piece. This piece won’t refute Jennifer Calonia’s experience, but will actually agree with some of her points and discuss my own experiences.

Starting To Accumulate Debt

No one plans to go into crippling financial debt which usually occurs because of a lack of Financial Literacy; living above one’s means, or something else such as today’s soaring costs of higher education. Many people don’t understand what they’re doing and the long-term ramifications as was in my case. Roughly nine years were spent completing my Ph.D. and then the two and a half years of subsequent training – all on a taxable graduate stipend which ranged from $17,000-$22,000, and then a postdoctoral salary of $37,000. During that time, my expenses often exceeded my income for a number reasons. My old Saturn SL2 was bought with my father’s credit card. It was maintained using another credit card whose balance eventually ballooned to $8,500 (just paid off this month). An unhealthy relationship or two also contributed to the bonanza.

Going Deeper Into Debt

After starting my first real job in the federal government, my debt swelled at least two to three times due to wanting to learn to invest in real estate, and wanting to do too much too soon money-wise. It was a good idea but the trainings came at a steep price which in hindsight could’ve been obtained for less money. Those who gave those particular trainings dangerously encouraged us as students who didn’t have tens of thousands of dollars saved up, to use our credit cards, under the assumption that the costs of the classes would get paid off relatively easily once we got some real estate deals done (to be covered in depth in a later piece).

Finding A Way Out

After accumulating my mound of debt, my life was blessed when two friends (from the same real estate trainings) discovered and shared Dave Ramsey’s Financial Peace University (FPU). Just briefly, four of the key components of FPU – the cornerstones of Dave’s “Baby Steps” include:

• Saving an Emergency Fund – one month and then four to six months
• Learning how to budget
• Using cash instead of credit cards and debit cards
• The Debt Snowball

The Debt Snowball is a strategy for eliminating debt. The individual lines up all of their debts smallest to largest, steadily paying them off one by one using the money from each paid off debt on the next one, steadily increasing the size of the payments on the larger ones until everything is paid off using “Gazelle Intensity” as Dave Ramsey calls it. Dave Ramsey uses the parable of the Gazelle who represents consumers who are preyed upon by the Cheetahs who represent credit card companies, banks and marketers.

The Debt Snowball Takes Determination And Work

Jennifer Calonia’s points are honestly all valid. My own Debt Snowball has taken two to three difficult years (and that’s without children), and it is easy to feel like quitting. Life continues to happen not just to you, but those around you – some of whom aren’t making good financial decisions and ultimately need your help – often unexpectedly. There is also the pull to do what others are doing – taking lavish vacations and acquiring luxury items for example. Finally, because you’re living on a fixed income when doing the debt snowball, some people may conclude that you’re “strapped” for cash which can be hurtful if you’re sensitive to the words of others.

These are all reasons why Ramsey discusses prayer when pursuing this effort (if that’s in your value system of course). From experience, when doing the Debt Snowball, one has to know that there are times when this financial plan can and must be altered temporarily – the holiday season for example. Furthermore, periodic rewards are realistically a good idea too (within reason). In other words, if you’re doing the Debt Snowball, you have to allow yourself some fun, or else you’ll stop it and never go back.

Other Ways To Pay Down Debt

Much to my surprise, Dave Ramsey does have his detractors and critics as does every author/speaker/guru. There is for example a second method to paying down debts which involves paying down the highest interest rate obligations first. Some consider this more financially intelligent than the debt snowball which is powerful because of the ‘emotional’ effect of seeing the debts go away.

Closing Thoughts

“We’re going to live like no one else, so later we can live like no one else,” Ramsey says frequently during frequently during Financial Peace University meaning that some sacrifices are initially involved, for greater gains and a comfortable life later on. Money is an emotional topic and as with most things, everyone has to make the best decisions for their own lives. Being on the cusp of completing my own debt snowball, it admittedly wasn’t easy, but if one can find a way to stick to it, it does work.

Thank you for taking the time to read this post. If you enjoyed this one, you might also enjoy:

• Chris Brown discusses true stewardship and financial peace
• Your gross net worth, your gross salary and what they mean
• The difference between being cheap and frugal
• Mother’s Day 2017: One of my mother’s greatest gifts, getting engaged, and avoiding my own personal fiscal cliff
• Father’s Day 2017: Reflections on some of Dad’s money and life lessons
• We should’ve bought Facebook and Bitcoin stock: An investing and technology story
• Challenging misconceptions and stereotypes in class, household income, wealth and privilege

If you’ve found value here and think it would benefit others, please share it and/or leave a comment. To receive all of the most up to date content from the Big Words Blog Site, subscribe using the subscription box in the right-hand column in this post and throughout the site, or add the link to my RSS feed to your feedreader. Please visit me on one or all of my channels on YouTube. You can follow me on the Big Words Blog Site Facebook page, and Twitter at @BWArePowerful. Lastly, you can follow me on Instagram at @anwaryusef76. While my main areas of focus are Education, STEM and Financial Literacy, there are other blogs/sites I endorse which can be found on that particular page of my site.

Tag: Financial

Financial Decisions That’ll Help You Down The Line

Investing some of your earnings

Creating an emergency fund

Spending your money sensibly

My personal experience With Dave Ramsey’s Debt Snowball Revisited