Whilst spending some time with my family during the Easter school break, I decided to watch this documentary with my spouse on Nexflix: Get Smart with Money
My main attraction was the title and the involvement of real people and real situations to teach how to be smart with money. I could relate with Kim and John because they are supporting a family. Like many friends and family members, I have not had formal training on how to manage my finances but I’ve learned to do most things as I go along which makes me happy that I can pass this knowledge to my kids.
Financial Literacy and debt comes up as hot topics in various circles. Some people shy away from it due to shame, not having a plan and others just don’t want to invest time and energy to learn how to properly move away from debt, loans or dependency on credit cards. I recommend this documentary to EVERYONE who wants to change their future and that of their family.
1- Be consistent with repayment of debt
Debts and loans do not vanish! They must be paid off immediately or over a period of time. The problem with using credit card is that, it satisfies immediate need but create long-term debt and financial dependency. Reshape your spending by allocating your paychecks into 4 accounts; bills, spending, emergency savings and dream fund. Pay off your credit card debts or loans with a payment plan by agreeing with the credit card company or your bank. Stick to the repayment amount and do not reuse the credit card as you will only be going round and round in circles.
2- Invest your money
Money not invested cannot give you much returns. You can invest funds through your own brokerage account or an index-fund provider. Investments make your money work for you when you are asleep and this gives you security for the future. Check with your bank or financial managers to help you diversify your investments. Here is a list of best S & P index funds as suggested by Bankrate: Fidelity ZERO Large Cap Index (FNILX), Vanguard S&P 500 ETF (VOO), SPDR S&P 500 ETF Trust (SPY), iShares Core S&P 500 ETF (IVV), Schwab S&P 500 Index Fund (SWPPX), Shelton NASDAQ-100 Index Direct (NASDX), Invesco QQQ Trust ETF (QQQ) , Vanguard Russell 2000 ETF (VTWO)
3- Move away from credit cards and use debit cards
Run away from the use of credit cards! Credit cards are very addictive and it’s easy to acquire from different institutions due to the high interest rates benefits for these companies. Spend what you make and not money which will trap you. The interest rates builds up overtime and it becomes difficult to pay off and still maintain the new lifestyle you have created for yourself. Put away all credit cards and spend only cash or from your debit card so that you spend within your means. For me, the best way of staying away from my credit card is by deleting the card information from all shopping apps or sites and only put on my debit card details. Here is a detailed help on how to avoid credit card debt CNBC
4- Make changes to your lifestyle now to support your future plans
Making life changes can be scary for several reasons. Buy in bulk, use cash or debit card, downsize your home, change your car, DIY some projects, find side hustles, use groupons and repay your debts are ways of getting smart with money. It is great to be frugal now and get your life back in shape to support your future goals and dreams. Think about the trip you have been putting on hold, the gift for your parents anniversary, the online course you want to enroll and therapy you need…. save some money for that purpose by cutting down now.
5- Cut off on expensive social activities
You owe it to yourself to support only what your bank account can afford. No one will hold a gun to your head if you cook at home instead of going out with friend 3 times a week to eat in restaurants. You don’t have to buy that dress, shirts or pants just because it’s a staff dinner or church program. Think through what you buy before, during and after a social activity….. is it worth putting you into debt of $100 ? or $10? If not then, be yourself and spending within your budget! I am not encouraging you to be a hermit but there are other social activities like running groups, using library, joing a book club, volunteering and community classes which are free and won’t cost a dime to partake in.
Conclusion
We feel in control of our lives when our finances are in order. The people in this documentary have challenged me! and I have put up a plan to be debt-free in 1 year. What is your story? Are you in control? Share your story with me at hi@abigailworkshere.com
