Ask a Mom: A Banker’s Tips to Help You Reach Your Financial Goals–Part One

I love the holidays, but especially the irony of Black Friday. Immediately following our nation’s holiday celebrating Gratitude and Mindfulness, we jump headfirst into a frenzy of must-have toys and super sales. The holiday debt hangover can, of course, be easily addressed by a New Year’s resolution to focus on money matters (sarcasm, folks). Whether you are a “resolutionist” or not, the end of the year is an excellent time for reflection and goal setting, especially financially.

Financial literacy is a passion of mine. I am in a unique position: I am both a current banker and former financial advisor, and part of my professional life is focused on community development. In a nutshell, that means that I get to help people for a living. I am also lucky to be a mom and member of this amazing group of women at ACMB, where I can share my passion through a series of posts on financial literacy.

Before we dive in, you should know that while I am a mom, I am not an attorney. You should always consult a CPA for tax advice, and the opinions I express here are my own and not that of my employer. If you read that complete disclaimer, congratulations! You have already mastered my first financial insight…

1. Always read the fine print. Yes, it can be tedious, but disclosures and financial statements are there for a reason. They inform and protect both parties, letting you know what your expectation should be and what your creditor or financial institution is expecting. I am convinced that if most people completely read a payday loan contract, they would choose to pawn something instead. Financial emergencies happen, but I would need a kidney sale-level emergency to pay 300% interest. I have seen instances where an extra financial hurdle could have been avoided if the terms and fees had been fully understood. Do not be afraid to ask questions. A dear friend said it best: “If someone is not helpful when you are trying to give them your money, imagine what they will be like when you actually need their help.”

2. Use the internet wisely. I use the internet for practically everything, from ordering groceries and gifts to finding an InstantPot recipe for dinner. It is an excellent tool for finding the information I need; however, always consider the source and keep your private information private. Searching for financial advice online can bring you to the doorstep of scammers, mid-level marketing schemes, and credit score peddlers. If you have already given a company or bank your information, it is unlikely that they will be requiring your Social Security Number now. Keep your wits about you. Remember when you searched for home remedies and the internet told you that backache was cancer? Yeah, it’s like that. If it sounds plain ridiculous or too good to be true, close that tab in Chrome and walk away, sister.

3. Starting in the middle is better than not starting at all. Much has been written about budgeting, credit, and finances. It can be overwhelming, and you may not know where to begin. Or perhaps you want to do things in the “correct” order, found a financial fitness list, and got stuck somewhere between budgeting and saving. Just start somewhere—be brave! Financial literacy is important because each part of your financial life affects the other: budgeting and saving, saving and debt reduction, debt reduction and credit. You get the idea. Plus, as mothers, we must remember that our children are watching. Lead by example and, if age appropriate, let them know where you are and the problems you are addressing. Teens who understand financial basics are better prepared for real life when they reach adulthood, although they’ll probably still expect a meal when they visit.

4. Do your best, and forget the rest. Like any New Year’s resolution, financial goals take time and commitment to achieve. Life is busy, especially when you’re a mom. Read everything you can, decide what you think is best for your family’s goals, and go with it. Again, this is an opportunity to have a conversation with your children regarding goals and achievement. There have been times where I have discussed needs and wants in non-theoretical terms with my daughter. Literally, the “Mommy is not made of money” conversation. There is nothing wrong with avoiding the First Bank of Mom title. However, remember to treat yourself if you can, because your sanity is important. I am not a perfect mother, but I’m doing my best, and you can pry the overpriced latte from my cold, dead hand, Mr. Latte Factor! It’s a thing. Google it.

5. Know where you money goes. Sounds like a simple concept, and if you’re an average mom who is in charge of the family finances I’m willing to bet that you can make a list of your monthly bills quickly, including an average amount spent and when they’re generally due. There is also a decent chance you can estimate your monthly tithe to the amazing store that is H-E-B. However, can you accurately estimate your soft costs? These are the costs that fluctuate and usually cut if an unexpected expense arises for your family. For me, these usually include things like fast food, recreational trips to Target, and other entertainment.

If you want to work on building a better budget, paying down debt, or reaching a savings goal, examining where your money goes is an important first step. For those who feel like they have a general handle on things, reviewing your budget at the end of each year can be an eye-opening exercise and help you stay on track. Lifestyle creep is interesting phenomenon where things that were once luxuries become necessities as your income rises. Always feel like you’ve allocated every dollar no matter how many promotions you receive? You might have lifestyle creep, or maybe kids. Either way, knowing where your money goes will also be important to understanding your overall financial health. More on that later.

There are many opinions on how to best track spending. High-tech options include apps for your cell phone and personal financial management platforms like Mint, Quicken, or You Need a Budget (YNAB). Your bank or credit union’s online banking system may also offer budgeting and spending analysis tools. Other, more traditional methods include keeping a journal, collecting receipts for the month in an envelope, or creating a list and bill calendar. If you’re a traditionalist at heart, check out the CFPB Bill Calendar and the CFPB Spending Tracker.

Stay tuned! Next time I will be discussing debt, understanding credit, and how to do an end-of-the-year checkup.

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