5 of your most urgent money questions – answers
COVID has shown us how quickly unexpected events can derail our plans. Now more than ever, it’s important to plan ahead, especially when it comes to your finances.
Whether you’re starting your business, building your retirement fund, or just learning the basics of finance, paying yourself off beforehand pays off. Investing in your future will pay dividends.
To help you take control of your own financial future, we partnered with Ally for our recent Money Moves digital summit to host an hour of mentoring with five financial experts to answer your most pressing financial questions.
In case you missed it, we’re sharing some of the Q&A from our Money Moves mentoring session. Read on for sound financial advice from our five mentors who know a lot about the importance of investing in yourself, your business, and your financial future.
Q: Investing can be intimidating. What advice would you give to someone new to investing and not sure where to start? How to overcome the bullying factor?
JACQUELINE: As a first generation stock investor, I know what it’s like to be paralyzed with fear because you don’t know what to do first. I am the daughter of a policeman and a teacher who had pensions to finance her retirement, so the scholarship was not a topic of discussion at my table when I was growing up. After graduating from college, I realized the importance of owning stocks as part of my wealth building strategy. I started small and made a contribution of $ 25 to the 401K provided by my employer. As my salary increased, I contributed more, hired a financial advisor, and opened a Roth IRA account. I also worked hard to eliminate credit card and student loan debt. Over time, I became obsessed with understanding money and building wealth. Now, I constantly listen to audiobooks and podcasts, watch CNBC, or read the Wall Street Journal and Barron’s. All of these efforts have helped me better understand money and investing. So, my top tips for new investors: start small, automate the process, and commit to learning.
Q: If this past year has taught us anything, it’s the importance of anticipating the unexpected. As a small business owner, how can I be better prepared financially in an emergency?
ALLYSON: The past year has taught us many lessons and brought significant stress to female entrepreneurs around the world. We wondered how to properly position our services, pivot our product lines and staff our teams in the midst of a global pandemic and global racial calculation. It was not easy, but we survived.
There are (3) things that I have shared with our clients averaging $ 250,000 + per year to keep them on track and committed to success.
- When the stress of money hits, DON’T discuss the stress. Concentrate on the pivot. Ask yourself, “What is my lowest fruit to sell and position in the market?” Your job is to sell with intent, sell quickly, and secure your cash flow.
- Get MORE LOUDER in your market. Our tendency when stress strikes is to shut up and go into protective mode. Choose from a place of power and connect with your audience like never before. Do what others don’t to ensure the success of your business in a way that others don’t.
- Finally, as a business owner, focus on yourself. Know your numbers, meet your accounting team (accountant, accountant, devil… maybe you are having a meeting with you) but whatever you do, don’t hide behind your numbers, stay on them. Have a clear picture of where you are located so you know where you are running your business.
Financial stress can cause us to forget about our business goals, discipline us away from management, and quickly throw us into a state of overwhelm and fear.
Use affirmations like the one below to kickstart your breathing or meditation, because if you are riddled with anxiety and very stressful emotions, your business and bottom line will soon follow.
REPEAT AFTER ME: I am a vibrational partner for financial prosperity because I choose to allow only massive well-being. I stay instead of already receiving the monetary abundance from all sources which are for my greatest good and my greatest joy.
Stay the course. It’s the ebb and flow of business and by keeping your mind centered, your energies focused and your intentions clear, you will weather the storm and find the sun of your success again.
Q: I am currently working full time for an employer, but am planning to start my own business soon. What is the most important area for me to focus my financial energy right now in order to take the plunge?
BRITISH: What a great question… and it’s great that you are starting to think about it now. A common mistake new business start-ups make is investing based on what others are doing and not on their own. CLEAN goals / needs.
So here is my advice:
- First define your brand by describing your what, why, how, who and who not.
- Then focus on who and figure out how you can solve their problem (s).
- Now that you have the solution to their problem (s), wrap it up … is it a product, service and / or program …
- Now is the time to launch it into the world … Who are the key people who can help you achieve this?
So to answer your initial question… your financial energy will go into “The key people who can help you make [your launch] happen”.
Maybe it’s inventory samples? Maybe he’s a business coach? It might be a brand designer or an operations strategist… but the question remains: who are the key people who can help you make the launch of your new business a reality? Start there.
Q: I am reassessing how I have divided my finances after 2020. How much money should I keep in my savings account and my checking account?
ALAINA: Here is how I distribute the cash in my accounts:
Current account: I keep a small cushion in this account (no more than $ 200 to $ 500) just to cover the unexpected expenses of my daily expenses. I don’t like to keep more than that just in case my debit card gets compromised.
Short-term savings account: With my short-term savings account, I keep money for any repairs or things that don’t happen every month (like birthdays). In this account I keep a month of expenses.
Long-term savings account: This is my emergency fund. I would keep 3-6 months of spending in this account in case you lose your job. If you have a very secure job or you can get a new job very easily, I would keep 3 months, however if you are self-employed or your job is unstable, I would keep 6 months of expenses.
Q: I’m saving to buy a house, but I’m worried my credit rating is too low. How can I increase and maintain my credit rating?
ASHIRA: The best way to increase and maintain your credit score is to start paying all of your bills on time. Late payment can have a substantial effect on your score.
You want to keep your credit card usage rate below 30%. Your credit card usage rate is calculated by dividing your credit card balance by your total credit card limit. Make sure every credit card usage is less than 30%. Using credit makes up about 30% of your credit score, making it one of the most important factors in increasing or maintaining your credit score.
You can also dispute negative or inaccurate items reported on your credit report. The best option is to write a letter to the three credit bureaus explaining why the information is inaccurate and provide proof. Make sure to send the letter by certified mail with return receipt requested as proof that you sent the letter.
This article first appeared on Create and Cultivate.