THE YOUNG WOMAN’S GUIDE TO FINANCIAL

INDEPENDENCE

BY

Umar Saleh Manu

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Copyright © by Umar Saleh Manu 2022. All

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Table Of Contents
Chapter 1

Chapter 2

Chapter 3

Chapter 4

Chapter 5

Chapter 6

Chapter 7
Chapter 8

Conclusion

Chapter 1
Why are we drowning in debt

Debt can be caused by a variety of factors when

you spend more than you can afford. Some of
these circumstances are just a result of everyday
life and situations that many people encounter.
However, by keeping a close eye on your
finances and managing your money effectively,
you can better position yourself for when such
events occur. Of course, other causes of debt
may be down to poor money management or
issues with personal spending.
Sticking to a budget, saving money where you
can, and regularly meeting debit payments and
bills are all helpful ways of ensuring you don’t
fall into debt or can help you deal with the
situation if you do.
Seek advice from debt charities and find out
about any benefits or tax credits that you could
be entitled to for lower incomes. You could also
consider ways of boosting your income, such as
taking a second job or cutting down on
unnecessary spending.
You can take stock of your finances at any point
during the year, especially if your circumstances
have recently changed.
What are the main causes of debt?
A variety of issues can cause debt. Some causes
may be the result of expensive life events, such
as having children or

moving to a new house, while others may stem

from poor money management or failure to
meet payments on time.
Here are some of the more common causes of
debt people face in their everyday lives.
Low income or underemployment
Some people on lower income jobs may find it
hard"3 to meet their bills or put money into
savings because there isn’t much money left at
the end of the month from their wages. Living
pay cheque to pay cheque can leave you in a
precarious situation should you face a large bill
or unforeseen payment.
Divorce and relationship breakdown
As a couple, you get used to having two
incomes coming in. But if you get it, your
income could well be halved or drastically
reduced. You may also have to cope with the
major expense of legal bills, or regular
payments to your former partner.
This is a good time to take stock of your
finances, talk to debt support charities and
consider if you need extra sources of work or a
new job to bring more money in.
Poor money management
Get on top of your debts before they get on top
of you. Look at your bank statements and make
a spending diary to work out what you are
spending money on, and how far your income
goes in covering your outgoings.
If you find you are overstretched, see if you can
cut your spending down or assess any savings
you could make by switching your energy bills,
phone contract, or even your mortgage.
 High costs of living

Some areas of the country have higher costs of

living than others. Several things can factor into
a higher cost of living, such as higher house
prices, rental demands, and longer commutes.
All these factors affect regular expenses, which
could leave you short when it comes to meeting
other financial obligations.
Overuse of credit cards
Store cards and interest-free credit deals can
sound tempting, but if you fail to keep up with
repayments or are already struggling with
others, it’s best to avoid taking on any more
debt.
Talk to your credit card providers about a debt
management plan and get help from groups like
Citizens’ Advice for support on the best way to
consolidate credit card debt.
It’s also best to avoid spending on credit cards
exclusively. Although a credit card can offer
you payment protection and an improved credit
rating in some cases unless you’re confident you
can meet your credit card bills regularly, try and
stick to cash or debit transactions for the bulk of
your spending.
If you have several credit cards, you could look
into consolidating your debt to better manage
your repayment plan.
Unexpected expenses
Sometimes accidents happen, whether it’s the
boiler breaking down, or an illness that leaves
you unable to work. Having access to savings,
or a good insurance policy can act as a buffer
when you’re faced with large one-off payments.

These events are sometimes unavoidable, and

just a case of bad luck, so it helps to have access
to a fund to cover such emergencies.
Declining health and medical expenses
Healthcare can be expensive, from purchasing
medication to ongoing costs in the event an
illness leaves you unable to work. Declining
health and medical expenses are a common
cause of debt for many.
Although it’s best to live a healthy lifestyle,
some illnesses are the result of unfortunate
events or an accident. In the situation that you
are faced with spiraling medical costs, you
should speak to a debt support charity or the
relevant benefits department to see if you can
get help with your medical expenses and health
care.
Job loss
The regular salary from a job provides a lot of
security and means you know there is money to
pay the bills and put food on the table.
Should you suddenly lose your job or be unable
to meet your bills, you could be faced with
looming payments or have to use credit or debt
services to cover your costs.
Having access to savings, or a good insurance
policy can help you in these scenarios.
However, if you are unable to save, it’s worth
looking into whether you can get any
government help in the form of benefits.
Education and student debt

This is a very common form of debt, especially

for young people. Going to university or
extending your study with a master’s program
can be a great step to helping you achieve your
goals and work towards your chosen career.
However, both undergraduate and postgraduate
studies are expensive, especially in the UK.
The debt repayments work in a different way to
other forms of debt, however, with a small
portion of what you owe taken from your wages
when you do start working.
Unlike some other forms of debt, your credit
score is unlikely to take a hit for having student
loan debt.

Living beyond your means

The fastest way to get into debt is to spend more

money than you earn. Though it may not always
be possible, try and live within your means.
Cutting down on unnecessary expenses and
finding ways you can lower your monthly
outgoings, such as traveling by foot or bike or
cooking at home can help to reduce your
expenses. You could always put the money you
save into a savings account or use it to pay off
existing debt faster.
Not having a budget
Not having a budget is one of the simplest
causes of debt. By not being aware of how much
money you have, you could be more likely to
spend more than you have access to. By
monitoring your finances, you can stay on top of
payments and be more aware of how much
money is left in your account.

A monthly budget could go a long way to

helping you cover bills and other important
expenses first, as well as giving you knowledge
of how much surplus income you have each
month.
Lack of an emergency fund or savings
It can be hard to save money, especially when
you’re already in debt or your monthly pay
packet doesn’t allow for wriggle room.
However, if you save up a small emergency
fund, or even enough to cover a few months’
expenses, you can put yourself in a good
position should anything go wrong.
With an emergency fund, you could cover the
cost of some emergency expenses without
taking out a loan or cover yourself for a few
months in the event of losing your job.

Having children

Having children is a wonderful experience and a

life goal for many people. However, it’s no
secret that having children is expensive. From
childcare costs to food, clothes, and toys, there
are plenty of extra expenses that come with
having children.
Some parents may be faced with taking on extra
debt to continue to provide for their children. In
this case, you must speak to a debt support
charity or seek further benefits to assist you.
Failed business and business expenses
Starting your own business can be a very
rewarding and successful experience. However,
many businesses can fail and get into debt. As
the owner of the business, you will be liable for
any debts the business incurs.

The cost of starting a business can be very

expensive and some entrepreneurs take on debt,
or a loan from the bank, to get things started in
the hope that their business will be profitable
enough in the future to pay back the loan.
However, this isn’t always the case and even if
your business fails, you will still owe the bank
the money you borrowed for start-up costs.

Ways to prioritize your debt repayments

If you are in debt, it’s important to pay back

what you owe in a fast way, but also within your
means. Speaking to a debt support charity can
help you gauge how best to manage your
payments, and they can sometimes help you
organize an achievable payment plan with the
companies or services you may owe.
There are several ways you can manage your
finances effectively and prioritize your debt
repayments.
Priority payments – this is making sure the
important bills are paid off first, sometimes even
before your debt. Keeping up with your
mortgage payments, rent, and utility bills can
avoid accruing any further debt.
Pay-off debts – Paying off your debts to
businesses, banks, and loan providers is more
important than any unnecessary expenses, such
as eating out or trips to the cinema. Agree with a
payment plan with your providers to make sure
you can manage your debt repayments.
Plan a budget – Being aware of how much
money you have and planning your monthly
expenses can help you be certain of where your
money is going. You could also see areas in that
you could potentially save money.
Monitor your cash – Keeping a close eye on
your finances is important, so you can be aware
of when bills are due and how much money you
have in your account.
 Chapter 2

Preparing for Emergency

Financial emergencies happen to everyone. But,

with a safety net in place, you can get ready for
them in advance. Here’s how to do it:
Build an emergency fund that will cover three to
nine months of expenses
This should be kept in savings, with the
understanding that you won’t touch it unless an
emergency comes up. Allocate an affordable
part of your take-home pay every month to build
up the fund and determine realistic timetables
for goals such as “Have three months of
expenses set aside within a year and a half.” If
you need flexibility, then designate three
months of the fund for unexpected expenses that
don’t quite qualify as emergencies and the rest
for a genuine emergencies.
Consider various insurance options that help
protect against financial emergencies
Homeowner’s insurance can guard against loss
from fire or theft. Collision insurance for the
car―which is generally optional even when
liability insurance is required―protects against
the loss of much-needed transportation or costly
repairs. Disability insurance―which is offered
by many companies but
can also be purchased individually―guards
against loss of income due to injury or illness. If
you have dependents who rely on your income,
you probably want to consider some or all of
these. Then, for later in life, long-term care
insurance can protect your spouse or children
against the high costs of providing home or
institutional care for you.
Invest in savings products designed for major
expenses that are not unexpected
These would include tax-advantaged retirement
funds and college savings plans. Most college
savings plans allow you to invest in your child’s
future education―and then take the money out
tax-free. For a retirement plan, if an employer
offers to match part of your contributions, then
it’s like getting free money! Not only that, but
you lower your tax burden with every
contribution you make. Another option: A Roth
IRA, for which your withdrawals on earnings
are tax-free.

Get your financial “house” in order

Lowering your credit card balances will save
you money while giving you the flexibility to
handle an unexpected situation. Establishing a
home equity line of credit (HELOC) (but not
using it until you have to) will take care of home
expenses that “pop up,” like a new furnace or
air-conditioning unit. In general, growing the
equity in your home as quickly as possible
creates

the kind of financial freedom that can empower

you to take on anything else that comes along.
Open a checking account at a credit union or
community bank
These institutions are likely to value you as a
person, rather than just a credit rating. They can
approve you for a personal line of credit to help
with an emergency.
Invest in Home or Renters Insurance
The most common homeowners insurance
claims are due to wind and hail, but claims run
the gamut from fire and water damage to theft
and medical bills.
Whatever happens, knowing that your home and
possessions are covered can help mitigate loss,
which can make bad times less devastating.
Depending on where you live, it may make
sense to purchase additional coverage for
specific hazards. For instance, you might want
to purchase flood insurance, which isn’t
typically covered by homeowners or renters
insurance policies.
You can also compare your current
homeowner's insurance coverage to other
coverage from top providers using Gabi®, a

part of Experian. Review price and coverage

comparisons to find the best policy match.
Build Your Credit Savvy
One key financial preparedness move you
should make right now is to mind your credit
score. While it’s not a substitute for a flush
emergency fund, strong credit, and low debt can
come in handy when you need to borrow.
Always make at least the minimum payments on
all debts by their due date to avoid damage to
your credit score. In addition, keep credit card
balances low and avoid applying for multiple
credit products in a short period. These good
credit behaviors will help you build or keep a
high credit score, and that means easier access
to credit at a better rate when you need it.
Assess your current credit health and see where
you stand with regular updates by signing up for
free credit monitoring through Experian.

Chapter 3
Using Credit Cautiously
Have you recently received your first salary?
Are you itching to head to the shops and spend
your hard-earned money on a treat for yourself?

You might find that now that you are earning a

salary you are being approached by various
credit providers with appealing offers for store
cards and credit cards. You might be tempted to
take up these offers so you can spoil yourself
with a new outfit or a new cellphone.

But remember there is both ‘good’ and ‘bad’

credit. ‘Good’ credit is when you take credit for
something that gains value like a home or
student loan while ‘bad’ credit is when you take
credit from things you don’t need like a new
TV.

When you take the credit you must be careful as

it can end up costing you much more than if you
paid cash. If you don’t manage your spending
you might get into a lot of debt and struggle to
meet your monthly repayments.

There are two types of credit:

Short-term credit: this is when the lender

expects repayments over a short period for
example on a store card.
Long-term: this is when the lender expects
regular repayments over a longer period for
example on a car or home loan

When you take our credit remember that you are

agreeing to:
Pay on time
Pay the minimum amount due (but more if you
can)
Pay the interest as well as the original amount
due

Taking credit is a big decision so remember to

ask:

Can I afford the repayments, within my budget?

How much will I be paying in total, including
the interest, any service fees, etc?
Are there penalties or rewards for repaying the
debt earlier?

If you don’t understand the credit agreement

you can ask to get a print-out with all the costs,
you can also request a copy of the contract, so
you can take it home and read it carefully before
you sign it.

Credit can be very handy but remember these

golden rules:

Avoid borrowing money for non-essential items

Where possible, save some money to pay a
deposit
Where possible, save until you can afford to pay
for the item in cash, this will save you money in
the long run.
Also remember that every time you take credit,
it is recorded on your credit profile which is
held by credit bureaus. Your credit profile is a
snapshot of how you manage your debt and it
lists every purchase as well as if you pay on
time or not. You can check your credit report for
free once a year. This is a useful way to keep
track of how you are managing your debt and if
you need to take action to improve your credit
profile. Learn more about credit profiles and
debt management here.

By using credit responsibly you can invest in

your future and avoid becoming over-indebted,
which leaves you room to save and invest to
build your wealth over time.

Credit can be considered a friend or foe – when

used responsibly you can build trustworthiness
with lenders to receive more favorable outcomes
when shopping for a mortgage, car loan, or even
a job. When used irresponsibly, however, you
run the risk of damaging your financial future.
Establishing wise and sustainable habits is key
to creating and maintaining a good
credit score. We offer four rules of thumb for
using credit responsibly.

Read the Fine Print

Reading the fine print is an often overlooked
best practice when applying for a new credit
card or shopping for a loan. Although it can be
tedious, it’s worth understanding the terms and
conditions before proceeding. Pay particular
attention to the fees, interest rates, and any
rewards. Card companies have mastered the art
of predatory lending and they often glamorize
card offers with images of a beachside vacation
or backpacking in Europe.
Although these rewards are valid, there’s almost
always a catch. While a 50,000 bonus mile offer
is appealing, you may end up paying for some
of it with an annual fee or other hidden costs.
Take the time to read the fine print so you
understand what is required of you in accepting
a credit card offer. You’ll be more informed so
you can decide if the rewards are worth the
costs or restrictions. Check out this credit card
glossary that can help you understand what to
look for in the fine print.
Spend Only What You Can Pay Back
Research shows that consumers tend to spend
more with credit than with cash, for obvious
reasons. Getting into a habit of living a
borrowed lifestyle can lead to a downward
spiral of debt if you spend beyond your means.
Although it’s probably easier said than done,
committing to a rule of charging only what you

can buy with your debit card or cash is a reliable

way to set limits for your credit card spending.
Pay Off Your Balance in Full Every Month
Payment history is the most influential factor in
determining your credit score. You generally
have 30 days plus a grace period to make your
payments. By paying as much as you can of
your credit card bill –at least the minimum due
and ideally the entire balance – you’ll minimize
your interest costs and keep your credit score in
good shape. Making simple changes like
enrolling in auto-pay or receiving text alerts
when your payment is due can help ensure
you’ll never miss a payment!
Think Before Closing Accounts
It’s no secret that closing your accounts harms
your credit score. In general, it’s best to keep
the card you’ve had for the longest time to
maintain a longer credit history. If you need to
close accounts, however, start with the cards
that carry high-interest rates or annual fees.
When you call the company to cancel, it doesn’t
hurt to explain your reasoning – card companies
will often find ways to waive the upcoming
annual fee and allow you to negotiate a lower
interest rate to keep you as a customer.
No matter how you choose to use your credit
card, we consider it a best practice to obtain and
monitor your credit report at least three times a
year to ensure your credit habits are sustainable
and help you maintain a good credit score. You
can find information on how to do so in our
piece titled, A Careful Review of Your Credit
Report. In addition to your review of your credit
score, we also suggest that you enroll in around-
the-

clock credit monitoring. We highly recommend

IdentityForce and encourage you to consider
enrolling in their services at Yeske Buie’s
negotiated rate.
 Chapter 4
The Hidden Secrets Behind Student Loans

The student loan crisis is impacting you, your

friends, your kids, and our economy. College is
more expensive than ever and you’re being told,
“Student loans are good debt,” “You can’t go to
college without debt,” and, “It will be worth it.”
These lies have duped the average college
student into taking out $35,000 in student
loans.1
In episode 1 of Borrowed Future—a Ramsey
Network podcast series investigating the student
loan debt crisis—you’ll hear from Dave
Ramsey, Anthony ONeal, Rachel Cruze,
Michael Torpey, Seth Frotman, and others on
the reality of the student loan debt crisis. You’ll
also hear from real people burdened by the
stress that goes along with huge monthly
payments and a mountain of debt.
How Many Students Are Paying
We interviewed people from all points of the
student loan spectrum. Some graduated with
federal loans, some graduated with private
loans, and some didn’t graduate at all. Here are
the numbers that represent their stories:
$54,000 in college loans without a degree to
show for it
$62,000 in debt only to make $19,000 a year
$121,000 for a master’s degree to work as an
administrator

$175,000 in private student loans and federal

student loans combined
Over $600,000 in student loan debt
More than 45 million Americans have student
loan debt, and the burden is keeping many of
them from moving forward with their lives. The
average student graduates with $35,000 in
student loan debt with an average monthly
payment of $393.

If this sounds normal to you, it is.

Student loan debt has become a part of the
culture. It's woven into society, and it's just
accepted as a normal part of life. But it's
negatively affecting real people and the
economy. And now, it's a crisis that's drawing
national attention. While everyone doesn’t fully
understand the true impact that this debt is
having, people are starting to see that it has life-
altering consequences.
Student Loans Are Leaving People Paralyzed,
Terrified and Overwhelmed
Every single year, another million student
borrowers default on their debt.5 The student
loan crisis is getting out of control.
“Every day, I talk to someone who's got
$100,000 or $200,000 or $250,000 in student
loan debt,” says financial expert and nationally
syndicated radio host Dave Ramsey. “100% of
these people are completely emotionally
overwhelmed. They're paralyzed. They're
terrified. They do not know what to do.”
Dave continues, “They were led down this path
by a set of values put on them by a series of
guidance counselors and

parents who weren't thinking, educators who

were out of control, and

a congress who continues this ridiculous student

loan debacle. And here they sit, trapped. And
they don’t know what to do.”
Dave paints the bigger picture of what this
means for them: “Who they were supposed to
become—they can't [become that]. Because
they're walking around with this 400-pound ball
over their head, and they're trying to balance
that and live a life.”
“What No One Ever Told Me About Student
Loans”
So why is anyone signing up voluntarily to carry
around the 400-pound ball? And how did no one
notice until now?
The author of the book Debt-Free Degree,
Anthony ONeal, has firsthand experience trying
to balance the burden of student loans. Now,
he's devoted his life to helping young people
make better decisions, especially when it comes
to money. He doesn’t want young people to
make the same mistakes he did.
When telling Borrowed Future about the first
time someone at his high school mentioned
college, Anthony says he felt like he was
already behind: “I'm tripping, because my
parents haven't told me anything, my counselors
haven't told me anything, my friends haven't
told me anything. And I'm like, ‘What the heck
do I do? Do I go off to college? If I do go off to
college, how do I go off to college?’”
When Anthony approached his school counselor
about the situation, his counselor told him his
grades weren’t good enough

to qualify for scholarships. “But there's also

student loans,” she said.
What he didn't know is that student loans would
send him down a road that would take years to
clean up. Student loans are a problem,
impacting Anthony, you, our kids, and our
nation.
“I go home,” Anthony says, “And my parents
are like, ‘Yo, we have the GI Bill and anything
above the GI Bill . . . we'll just take out some
loans.’
“That was the thought that myself, my
counselor, and my parents had: If you do not get
a scholarship, or you do not cover it all with the
GI Bill, we'll just take out some loans. We'll just
go talk to Sally Mae and ask Sally Mae, ‘Can I
borrow some money?’ And we already know
her answer. It was going to be yes.”
Anthony did end up getting a scholarship from
the National Forensics League. Combined with
his father’s GI Bill, he was able to cover the
cost of all his classes that first semester. He’s so
passionate about scholarships, that he created
one of the biggest, best, and easiest scholarship
search tools that exist: the Debt-Free Degree
Scholarship Search.
“When I had it all paid for, I still did a dumb
thing,” he admits. “I still borrowed money to go
after the lifestyle, to get the clothes, to get the
car, to buy the roses, to go to McDonald's. I
borrowed money just for the freaking lifestyle."
“I still borrowed money to go after the lifestyle,
to get the clothes, to get the car, to buy the
roses, to go to McDonald's. I borrowed money
just for the freaking lifestyle."

“Studies are showing that a lot of students'

college is paid for, but they're still borrowing
money to live. Live off of what? You're
borrowing money, and you're paying back so
much! But no one ever told me that. No one
ever said, ‘You're robbing from your future,
Anthony, if you take out student loans.’ It was
normal. So, I said, ‘I'm going to be normal, and
I'm going to join them.’”
When students start borrowing massive amounts
of money as a teenager, it sets them on a path
that just spirals into more and more debt.
Anthony says, “Not only did I take out $10,000
in student loans, but I also took out $15,000 in
credit card debt. I also borrowed $10,000 to get
some furniture debt. Before I even turned 19,
I'm $35,000 in debt, and I woke up like, What in
the heck is going on? No one told me!
“What woke me up—because I did not have a
plan—was me being homeless at the age of 19,”
he admits. “I'm sleeping in the back of my car
because I didn't take every one decision that I
made seriously, and I never took the time to
write out the vision for my life, write out the
plan for my life. I just followed what everyone
called normal.
“Normal is trying to finance things that I really
could not afford at all. Normal is trying to
impress my friends and go to the same school
that my friends were going to. That normal
ended with me in the back of the car.
“It's normal to have $35,000 in student loan
debt. It's normal to have about $15,000 in credit
card debt, it's normal to spend about $20–30,000
on a wedding and financing a wedding. That's
normal? I was tired of being normal. I was ready
to be different. And being different means we
don't have to be normal to be successful. We
should not be financing things. We should not
be in debt.”
Is Student Loan Debt “Good” Debt?
A recent Ramsey Research study of consumer
debt shows that four out of 10 people don't even
think student loans are debt. So that begs the
question, what exactly is debt? Here’s what debt
is:
Debt is owing anything to anyone for any
reason.
So, if you borrow money for a student loan, that
is debt. You have to pay it back. And if you're
making payments on your college loans—that
money can't be spent on something else, like
rent, gas, food, or retirement savings. That's bad
for you and the economy.
Anthony is not the only one who thinks debt is
bad. There's a guy out there who has been
yelling about this on a street corner for almost
30 years. And that street corner happens to be
the third largest talk radio show in the United
States: The Ramsey Show.
“To go and spend money that you don't have to
maybe graduate is ludicrous,” Dave preaches.
He’s helped millions of people crawl out of debt
and build wealth. Needless to say, he's got a
strong opinion when it comes to student loan
debt.

“Student loans are often said by people to be

‘good debt,’ which is laughable. Is education a
good thing? Yes. Is it worth investing in? Yes,
in a proper setting, with proper analysis as to
what kind of a degree you're going to get, and if
is it applicable in the field.
“But when I took my kids to college, who
graduated a decade ago, we went to a four-year
state school and in the orientation, the lady says,
‘We have a high graduation rate: 58%.’ Which
is above the national average, by the way.”
Dave breaks it down this way: “Now, if I got a
58 on a test, they would have given me an F.
But they're calling themselves big dogs because
they got a 58% graduation rate. Translation:
42% did not graduate. So, everyone that takes
out a student loan, four out of 10 times, does not
get a degree.
“So, this idea that you're automatically going to
get a return on investment assumes you've
completed a degree in a field that will pay you
more than you would have made had you not
gone to school. And it assumes you freaking
graduate. So, it's a stupid set of assumptions to
get us to the point that this is ‘good debt.’”

So, it's a stupid set of assumptions to get us to

the point that this is ‘good debt.’
Along with Dave, there are lots of other experts
who say you should stay away from this "good
debt." One of those people is Seth Frotman. He
is the executive director of the Student Borrow
and Protection Center in Washington, D.C. He
is also the former ombudsman at the Consumer
Financial Protection

Bureau, a government agency designed to

protect students. Put in a much cooler way, NPR
called him: the student loan watchdog.
“So there are these misperceptions that student
loan debt is ‘good debt,’” Seth says. “Or there is
something about the fact that the word student
appears before the word loan that makes people
think that this is somehow different. This was
just another form of consumer debt that we were
in charge of overseeing.
“And unfortunately, with the dramatic rise of
student loan debts, we've now added,
essentially, $1 trillion of student loan debt
overnight. [There are] predatory players who
view the student loan crisis as their chance to
make a quick buck.”6
Seth explains: “So you have private student
lenders, student loan servicers, debt collectors,
private equity companies, even social media
companies, who are looking at the student debt
market and creating a business model that is
essentially premised on ripping off students.
Seth calls us all out for burying our heads in the
sand and calling it “good debt.” He says these
lenders do not have the best interest of students
in mind, “Because every piece of history we
have to show is that that is not the case.”
Debt Doesn’t Get You Ahead—It Keeps You
Behind
Sometimes, our expectations of what we think
life will look like don't match up with reality.
Seth Frotman dealt with that reality every day at
the Consumer Financial Protection Bureau.

Seth shares that his team did want to help

students, but it felt like they were fighting a
losing battle: “We saw people over and over
again because of their student debt . . . the only
thing they did was everything that they were
supposed to do, which was taken on debt to get
their degree. And the number one thing we
heard was, ‘How has this happened to me when
I did everything right?’”
Anthony O'Neal has seen that play out time and
time again. People who did everything right
when it came to their future—they took on debt
to get the degree, to get ahead, but all it left
them was behind.
Anthony explains, “Just the other day, I had the
opportunity to speak at an HBCU—Historic
Black College or University—to all of their
incoming freshmen. They had about 1,500
freshmen who were starting their new journey.
“A young lady came up to me who is graduating
this year, her senior year, and she says,
‘Anthony because I came here out of state, I'm
graduating with about $180,000 in student loan
debt.’ She said, ‘I'm going to be a teacher, and
I'm going to make maybe $40,000 a year.’ And I
looked at her face, and she was like, ‘What do I
do?’”
That’s what breaks Anthony’s heart. “And I
couldn't be like, ‘Yo, you should not have even
come here,’ because she's already at the end of
it. And I felt so bad for her because [she’ll be]
making $40,000 a year, and she's nearly
$200,000 in debt before she even graduates.
“I told her, ‘Hey, you're going to have to get
aggressive. You're going to have to get a second
job. You have to get very creative in these next
four to five years. You are going to have to push
yourself hard. You may have to go home to
bounce back and start figuring out some things.
But

do not let this debt slow you down from really

going after your dream as far as being the best
schoolteacher and impacting our kids. It's there,
and I am so sorry that it is there.’ I am so sorry
that I wasn't even there to help her and give her
guidance before she even started.
“I don't want to talk to kids like her, in her
senior year of graduating, 20 years old, and
she's like ‘What do I do?’ My heart breaks for
these young kids who signed a piece of paper,
knowing that it was a loan, but did not know
exactly what they were signing. They didn’t
know that there were other options, that there
were better options to going to college. Student
loans are not an option. At all.”
The Shocking Reality of Student Loan Interest
Everyone starts with good intentions to go to
college and graduate. And loans feel like an
easy way to make that possible.
What can start as a small loan can grow and
grow. One woman we talked to named Terri
shared her struggle. She did everything the right
way. She had scholarships, and grants, and
worked two jobs while going to school full-
time. But during her junior year, things changed
when her options ran out. Here is what she had
to say:
“I was in my third year of college, and they had
cut off all of my grants, so I had no financial aid
to be able to pay for it. I was already working
two jobs at that point, and going to school full-
time, so they offered me student loans.
“I was told that's the only way I would be able
to stay in college. And since I had no money, I
was like, ‘Okay.’
“When the lady was telling me about the student
loans, it made it sound like it was very simple,
‘You know, you don't have to pay it back until
six months after you graduate. The interest
doesn't accrue until six months, so by then, you
should have a job to be able to pay it.’ So, it
sounded like a feasible solution to my dilemma.
“So I went ahead and took the $5,000, which
covered my tuition and my books. So, that
started the cycle of debt concerning education.
My balance when I graduated, finally, was
$15,000. It is now $60,000 and growing
[because of interest]. And that's while I've been
making payments on it.”
In case you missed it, her $15,000 student loan
grew $45,000 in interest while she was paying it
down! That’s a tough pill to swallow. Perhaps
saddest of all is that Terry says she had no idea
what would happen when she took out the loans.
No one thinks of the worst-case scenario when
they take out student loans, and Anthony is no
exception.
“Do not do what I did,” he warns. “I did not
have a plan but went to school. After six months
in school, I'm drowning in debt, and I'm
homeless because I did not have a plan. Two
years later, I'm in default with my student
loans.”

Both Terri and Anthony’s stories are “normal,”

because student loan debt is normal. And this is
what happens when people decide to be normal.
There are a lot of normal people out there—
more than 45 million of them—carrying student
loan debt.7
Swimming against the current in a sea of normal
is Rachel Cruze. She's a financial expert,
bestselling author, and host of The Rachel Cruze
Show—a show focused on making money fun
and creating a life you love.

“Student loan debt has become so normalized in

our culture,” Rachel says, “Because everyone is
taking out loans. And we have believed the lie
that you can't be a student without a student
loan.
“And you look over just a simple bar graph of
what student loan debt has done over the
decades, and [you see] the price of tuition has
increased because students can borrow however
much money they want, and go to college
wherever they want.
“There's no competition in this area of life, and
so they keep raising prices. And the Federal
government—they keep loaning out money to
these students. And so, because of that, it's the
easier path to sign your name to a dotted line,
and you get the repercussions four and a half
years later.
“You are starting your life in the hole. You are
starting your life, on average, $36,000 in the
hole.8 So when those bills start to

come, your options are limited. Meaning, you

have to go get whatever job you can to start
paying these bills.
“Man, what a better picture of freedom if you
didn't have these bills that you had to pay back,
and you had the time and the resources to say,
‘Hey, I'm going to take my time and figure out
what do I want to do.’”
Rachel advocates for making a different choice
from the get-go—that you have to go against the
norm to win with money. She says, “Doing the
hard work and being diligent and saying, ‘Okay,
you know what? I want to focus on doing what I
can to go to school completely debt-free.’ That
is weird in our culture.
“It's a financial hole that can be avoided
completely if you made some different choices
and decisions. And the hard thing is, these
students, they're not dumb! They're not
unintelligent human beings. No! A lot of them
are very smart. They've just been told the wrong
information.”
Is It Possible to Go to College Without Student
Loans?
Anthony ONeal has a firm answer to this
question: “Can you go to college debt-free?
Yes! Is it going to be easy? No!”

Anthony says if everything was easy—starting a

business or becoming a millionaire, for example
—everyone would be doing it. He says, “Only
the successful ones, only the ones who are
willing to work, have integrity, have character,
and do whatever it takes to become successful
are the ones who are successful. Successful
people do what unsuccessful people are not
willing to do.

“Then let me say this,” Anthony adds, “It’s not

about a privilege thing. It’s not about a race
thing. It’s about people who work. If you put in
the work, you’ll get the results. If you want to
be lazy, if you just want to have an easy route—
yeah, go sign student loan papers and be in debt
and bonded for the rest of your life.

“Avoid the stupid mistake that I made of

borrowing money to go to college, even when I
didn’t need it. No one gave me another route,
like, ‘Hey, Anthony, maybe going off to
community college is the best route for you. Or
maybe checking out a trade school is the best
route for you. Maybe starting this way is the
best route.’

“People may look at you, and they may laugh at

you. They may question you. They may even
doubt if you’re ever going to get through, but
you have to be so passionate that no matter
what, you are not going to give up. You’re not
going to borrow one dime to go to school, even
if it means you’ve got to move a little bit
slower.”

He goes on, “There’s currently $1.5 trillion in

student loan debt. You’re not going to be in that.
You’re going to graduate college. You’re going
to walk into your future, not a part of the state,
but you’re starting a new state. What’s the new
stat?”

Anthony O’Neal wants to get rid of the sad

student loan statistics. He has a path for how
you and your kids can avoid student loans and
graduate debt-free. In his new book, Debt-Free
Degree, he teaches parents how to help their
kids pay for college without debt, even if they
haven’t saved for it. This is a step-by-step plan
that combines common sense and the honest
humor.
Debt-Free Degree doesn’t just tell you what to
do. It also tells you why to do it, how to do it,
and when to do it.
 Chapter 5
The Mindset Secret of a Successful Woman

Whether you’re an industry veteran with

decades of experience or a recent graduate
who’s just starting a career, you’re probably
interested in earning more cash. Who wouldn’t
be happy to have a way to supplement their
income?

Finding additional income streams can help you

put your skills to use and become a more agile
working professional. Moreover, this extra
income can be put into savings or asset
investments that can help you secure your
future.

What exactly is the best way for you to increase

your income? Clearly “the best” method will
vary from person to person. In this article, we
explore 11 creative ways to consider for
increasing your income. Use the links to jump to
any parts that interest you most.
Ask for a raise
Many working professionals find themselves
stuck working jobs that don’t pay them well
enough, leaving them feeling unsatisfied and
overworked. Why does this happen? Often
employees simply don’t ask for a raise at the
right time.

If you think the compensation for your services

doesn’t accurately reflect your contribution to
the company, asking for a raise might be a good
idea.

Do some research to know when to push for a

raise to keep moving forward in your
professional career. You should keep close track
of what the average salary for your job title is
and try to negotiate with your employer
accordingly. The end of a contract term is
generally the best time to negotiate for a raise.

Search for a higher-paying job

Sometimes asking for a raise doesn’t yield the
desired results. If you’re stuck at a full-time job
that doesn’t pay nearly as well as you’d like it
to, a raise may not be enough. In these
situations, it’s sometimes best to improve your
skills and look for higher-paying jobs that can
help you achieve your financial goals faster.
Online courses through distance learning sites
like Coursera and Udemy can help you gain
relevant skills and certifications from the
world’s leading universities. With these
credentials on your resume, you can start
applying for new jobs where your skills are
valued much more, with appropriate
compensation.

Look for ways you can cut your expenses

Cutting expenses where possible can add to

your savings. Start by tracking your finances
using an app like Mint. Try to cut out luxury
expenses (like eating at expensive restaurants,
shopping for clothes you don’t need, and
racking up credit card expenses). Work
systematically on reducing the more significant
expenses.

The goal should be to replace your larger

expenses with more viable options that can help
you save money in the long run. For example,
try to carpool with a friend or colleague and
skip regular Uber or Lyft rides to save a little
extra money.

Automate your savings

Cutting your expenses can help you manage
your money better, but it’s only the first step
toward maximizing your savings. Any money
you save each month should be automatically
credited to a separate savings account you can
use for future investments.

You can also set your bank account to automatic

debit, where a small portion of what you earn
each month is directly transferred to your
savings account. If you plan to do this for the
long term, you may also be able to enroll in
your employer’s 401(k) program or an
individual retirement account (IRA). These
programs help you automate your retirement
savings and also offer additional incentives and
tax benefits.
Sell used items online

Many of the items you already own but use

infrequently can be sold online. You may need
to invest a little to get them repaired,
refurbished, or repainted to sell them at higher
prices.

Sites like eBay, Craigslist, and Poshmark allow

users to sell used items such as books, jewelry,
and vehicles. Try to sell used clothes through
thrift or consignment stores. Since consumers
have been flocking toward sustainable fashion
in large numbers, you may be able to capitalize
on this growing trend.

Brands such as Vestiaire Collective even give

customers the option to buy and sell second-
hand luxury goods from leading retail brands,
including Hermes and Gucci.

Pursue side gigs

Side gigs are a tried and tested way of adding to
your monthly income. Look for part-time jobs
that pay on a contract basis or choose to
freelance in your spare time. Side gigs can help
you get industry experience with a skill you
possess but have not been able to put to use in
your full-time job. Consider looking at websites
like Craigslist, Nextdoor, and TaskRabbit, for
example.

Monetizing skills like event planning, packing,

moving support, and driving can help you earn
extra cash. Pursuing these interests may open
alternate career options as well.

Chapter 6
How to Increase Income: 11 Creative Ways

Whether you’re an industry veteran with

decades of experience or a recent graduate
who’s just starting a career, you’re probably
interested in earning more cash. Who wouldn’t
be happy to have a way to supplement their
income?
Finding additional income streams can help you
put your skills to use and become a more agile
working professional. Moreover, this extra
income can be put into savings or asset
investments that can help you secure your
future.

What exactly is the best way for you to increase

your income? Clearly “the best” method will
vary from person to person. In this article, we
explore 11 creative ways to consider for
increasing your income.

Ask for a raise

Search for a higher-paying job
Look for ways you can cut your expenses
Automate your savings
Sell used items online
Pursue side gigs
Use Upwork to source gigs
Invest a portion of your budget

Start a side business

Create a passive income
Rent out your vacation home
‍

Note: The use of the word “income” in this

article isn’t confined to a fixed salary. Income
can be any amount of money that you frequently
earn through active (like part-time jobs and side
hustles) or passive (like appreciating
investments and renting out assets) methods.
Income also may not always come in regularly.
For example, freelance gigs help you get paid
frequently, but the intervals between payments
might differ from time to time.

11 Creative Ways to Raise Income

Ask for a raise
Many working professionals find themselves
stuck working jobs that don’t pay them well
enough, leaving them feeling unsatisfied and
overworked. Why does this happen? Often
employees simply don’t ask for a raise at the
right time.

If you think the compensation for your services

doesn’t accurately reflect your contribution to
the company, asking for a raise might be a good
idea.

Do some research to know when to push for a

raise to keep moving forward in your
professional career. You should keep close track
of what the average salary for your job title is
and try to negotiate with your employer
accordingly. The end of a contract term is
generally the best time to negotiate for a raise.

Search for a higher-paying job

Sometimes asking for a raise doesn’t yield the
desired results. If you’re stuck at a full-time job
that doesn’t pay nearly as well as you’d like it
to, a raise may not be enough. In these
situations, it’s sometimes best to improve your
skills and look for higher-paying jobs that can
help you achieve your financial goals faster.

Online courses through distance learning sites

like Coursera and Udemy can help you gain
relevant skills and certifications from the
world’s leading universities. With these
credentials on your resume, you can start
applying for new jobs where your skills are
valued much more, with appropriate
compensation.

Look for ways you can cut your expenses

Cutting expenses where possible can add to
your savings. Start by tracking your finances
using an app like Mint. Try to cut out luxury
expenses (like eating at expensive restaurants,
shopping for clothes you don’t need, and
racking up credit card expenses). Work
systematically on reducing the more significant
expenses.

The goal should be to replace your larger

expenses with more viable options that can help
you save money in the long run. For example,
try to carpool with a friend or colleague and
skip regular Uber or Lyft rides to save a little
extra money.

Automate your savings

Cutting your expenses can help you manage
your money better, but it’s only the first step
toward maximizing your savings. Any money
you save each month should be automatically
credited to a separate savings account you can
use for future investments.

You can also set your bank account to automatic

debit, where a small portion of what you earn
each month is directly transferred to your
savings account. If you plan to do this for the
long term, you may also be able to enroll in
your employer’s 401(k) program or an
individual retirement account (IRA). These
programs help you automate your retirement
savings and also offer additional incentives and
tax benefits.

Sell used items online

Many of the items you already own but use

infrequently can be sold online. You may need
to invest a little to get them repaired,
refurbished, or repainted to sell them at higher
prices.

Sites like eBay, Craigslist, and Poshmark allow

users to sell used items such as books, jewelry,
and vehicles. Try to sell used clothes through
thrift or consignment stores. Since consumers
have been flocking toward sustainable fashion
in large numbers, you may be able to capitalize
on this growing trend.

Brands such as Vestiaire Collective even give

customers the option to buy and sell second-
hand luxury goods from leading retail brands,
including Hermes and Gucci.

Pursue side gigs

Side gigs are a tried and tested way of adding to
your monthly income. Look for part-time jobs
that pay on a contract basis or choose to
freelance in your spare time. Side gigs can help
you get industry experience with a skill you
possess but have not been able to put to use in
your full-time job. Consider looking at websites
like Craigslist, Nextdoor, and TaskRabbit, for
example.
Monetizing skills like event planning, packing,
moving support, and driving can help you earn
extra cash. Pursuing these interests may open
alternate career options as well.

Do the work you love, your way

Use Upwork to source gigs

Freelance gigs are a great way to put your spare

time to use and earn money on the side. Unlike
regular jobs, freelance gigs allow you to decide
when to work to suit your convenience. You can
get paid on an hourly or project basis. Upwork
is the world’s leading marketplace for trained
professionals offering freelance services.
Clients look to Upwork to hire freelancers for a
variety of reasons. For starters, Upwork has one
of the largest talent pools of freelancers.
Engaging freelancers is a great way to increase
diversity and reduce company risk.

If you can showcase an impressive portfolio on

Upwork, you can begin to secure work, possibly
leading to high-paying gigs. Many valuable side
skills, from UI (user interface) design to
translation services, can be monetized using
Upwork.

Invest a portion of your budget

Smart investments are the key to generating a
stable supplementary source of income. After
you’ve met your basic budget needs, try to set
aside a sizable portion of your monthly salary to
invest in various assets. You can choose to
make both long- and short-term investments.

Systematic investment plans (SIPs) and bonds

are long-term investment options that you might
explore.

Once you become proficient in investing, you

may want to expand your portfolio with more
specialized assets, such as cryptocurrency, debt
funding, and real estate investments. These
investments can help you diversify your
portfolio, possibly making it eligible for tax
benefits and other incentives.

Start a side business

Starting a small business as a part of your side
hustle is an excellent way of supplementing
your earnings. Many side businesses have found
great success lately owing to social media
marketing and a consumer shift toward
authentic, homegrown brands.

Consider seeking assistance from organizations

in your community that help fund and manage
small startups. Some American banks also offer
lucrative interest rates on loans for innovative
entrepreneurial ventures.

You need to highlight your business’s authentic

products and capitalize on the power of social
media marketing. Small, community-centered
businesses may find great success on sites like
Instagram, Facebook, Amazon, and Etsy if
marketed well.
If you can supply quality products to your
customers consistently, your side business can
be profitable in the long run.

Create a passive income

Passive income is the income you generate from
a rental property, a limited partnership where
you’re the silent partner or any other venture
that doesn’t require you to be actively involved.
The definition of active involvement tends to
vary. While rental properties are generally
considered textbook examples of passive
income sources, they do require some amount of
time and effort for upkeep and maintenance on
the owner’s part.

The idea of passive income is to create an

income stream that doesn’t require a lot of work
from you. The incoming money can be through
appreciating assets (such as bonds and stocks)
that add to your portfolio income or through
utility-based assets like rental houses, spare
vehicles, and vending machines that you can
rent out.

You can even consider exploring more

unorthodox methods of generating passive
income, such as domain name investing.
Alternatively, if you have expertise in a certain
niche, you might be able to create an online
course or write an informative ebook about the
topic of your expertise and sell these items
online on marketplaces like Udemy or Amazon
Kindle Direct Publishing.

Based on subscription or purchase, you’ll

continue to receive money from these endeavors
over time.
While the income from passive assets might
initially not be as substantial as other additional
income sources, it can accumulate to be a great
stream of income in the long run.

Rent your vacation home

Renting properties you own but aren’t
occupying is one of the most highly
recommended ways of earning supplemental
income. While these properties may require a
fair bit of upkeep, they can be very valuable
assets.

Real estate companies allow you to lease your

rental property through them for a nominal fee.
You can also choose to make the property
available through lodging services like Airbnb,
which can be especially fruitful if the property is
in a location that sees a lot of tourist traffic.
 Chapter 7
secrets of a successful career women

When we see another woman succeeding in

their career, it’s normal to wonder, “What does
she have that I don’t?”

But instead of leaning into that jealousy, I want

to encourage you to accept the neurolinguistic
programming perspective known as modeling.
In modeling, we use the success trajectory,
beliefs, and attitudes of another person to guide
us on our path. We see her wins as our potential
future wins – and instead of being jealous, we
get inspired to craft our path!

Repeat after me: her wins show me that my

wins are possible!

Every person is capable of becoming a leader in

the workplace. I’ve been working with
executive women and mid-career professional
women for years now on how to step into their
power. And I’ve learned 5 secrets they tend to
use to create their version of success – so swipe
them below for your modeling purposes!

5 secrets of a successful career women

They have a strong sense of self. These women
aren’t second-guessing or allowing others to
influence them. They know their

value sets (personal and professional!) and are

self-aware of where they do their best work.
They practice staying in their zone of genius.
They’re willing to take responsibility.
Responsibility is a major fear for many women
in the workplace because it suggests a negative
punishment for owning your results.
Responsibility is one of the greatest strengths
you can develop as a leader – without it, nothing
is undertaken. The difference in how C-suite
women see responsibility is that they’re
deciding to own and steer the initiative – and to
course correct the best they can. They know that
they can’t control all the results - only the
efforts they take to get there. (Spoiler: if you
feel like you’re being ‘punished’ for results that
aren’t living up to potential, you may be in a
toxic work environment!)
They have a vision for the leadership legacy
they want to leave. This doesn’t have to be a
worldwide impact or winning a Nobel prize.
These women are clear, however, on how they
want to make other people feel, how they want
to be seen, and the opportunities they want to
create for others. They have this vision before
they reach the C-Suite—maybe even before they
have a leadership role at all! They understand
that this legacy has to be decided upon first and
then implemented.
They’re strong self-managers. Meaning they’re
in integrity with how they operate and what they
demand of their team. They don’t ask for
excellence and then scroll their day away on
Instagram – they’re disciplined and know what
they need to do to set themselves up for success
daily.
They’re consistent and clear communicators.
They understand that communication, even if
it’s uncomfortable, will help them eliminate
most obstacles they encounter. They also
understand that they can’t hold people to
expectations, boundaries, and goals that they
haven’t communicated, so they make it a point
of repeating core ideas.
Whether you have C-suite dreams or aspire to a
different career success goal, these secrets can
help you uplevel overnight. Start to think like a
leader, and you’ll be seen as a leader! It’s as
simple as that.
 Chapter 8
Ways to know that you are understanding your
career potential

Time for some tough truth: that exhaustion isn’t

because your work is unbearably difficult. You
know it isn’t! The real reason you’re exhausted
is that your mind and body are bored. It takes a
huge amount of energy to deal with the
mundane buzz of being bored for eight hours a
day—all day, every day. Nine times out of ten,
the
the reason you’re bored at work is that you’re
being underutilized.

You’re settling for a job that feels comfortable,

rather than pursuing the one you’re meant for.
So, how can you tell if you’re underestimating
yourself and your capabilities other than feeling
bored? I can help! You might fall into this
category if:

You’re the one who always takes responsibility

in a group setting: Notes, calendar invites, and
strategy always tend to fall on your very capable
shoulders.
Your suggestions aren’t implemented: You’re
always learning and getting inspired with new
processes and possibilities, but you feel as
though your ideas are brushed aside and never
actually implemented.

Your workload increases, but your pay doesn’t:

THIS ONE CANNOT BE OVERSTATED.
Many women feel honored when they’re asked
to take on more of an “unofficial” leadership
role, but don’t be fooled! If your workload
increases, but your pay and title don’t, that’s a
clear sign that you’re being undervalued.
Each of these indicators demonstrates that you
have the desire to lead others, to innovate, and
to take responsibility, but that you aren’t
currently in a role with enough authority to
make it happen. And, you know what that
means, right? It’s time for an up-level, friend!
If you realize you fall into this category, don’t
stress! This realization will change everything
about your career. You have to be the first one
to notice when you’re being underutilized and
undervalued, so that you can clarify what a truly
fulfilling and challenging role would look like.

If you’re realizing that you’re bored and

underestimating your skills, the number one
way to break out of this rut is to start thinking
differently. Ask yourself:

What would it look like to feel fulfilled at work?

What kind of challenges do I enjoy?
How can my gifts and skills benefit others?
What valuable perspective do I bring to the
table?
This is precisely why I became a coach! So
smart, ambitious women like yourself would
stop settling into roles that merely pay the bills,
and instead chase the true dream role.

Because you deserve both freedom and

compensation that lights you up.
And, you have world-changing ideas that we
need to see happen. You get to feel abundant,
and create an inspiring life, energizing and
powerful—it’s not just for entrepreneurs.
 Conclusion
To create a plan to reach personal financial
goals that will reflect your values and allow you
to live comfortably, you want to understand
what you’re currently spending your money on,
what you can realistically afford to spend, and
how these align with your priorities.

Using the Spending and Saving Tool from

America Saves is a great way to get a clear
picture of your household’s finances. Simple,
yet highly effective and enlightening are some
of the comments we’ve heard from savers who
have already used this tool.

So, let’s look at the steps involved with the

Spending and Saving Tool. We’re pretty sure
you’re going to feel a lot more confident about
your finances once you’ve gone through these
steps.

We recommend working with as detailed and

accurate information as you can for it to be most
helpful.
Step #1: Collect All Needed Documents and
Information

Before getting started with the Spending and

Saving Tool gather up all the following
documents and information for ease of

completion. We suggest collecting three

months’ worth of the following:

Paystubs (You may also want to refer to last

year’s W-2)
1099s – for freelance or gig workers
Bank or credit union statements – may have to
print them from your online account
Mortgage statements or rent bills
Household bills including utilities, garbage,
phone or cell phone, internet provider
Credit card bills
Other loan statements – auto, student loans
Insurance premiums – auto, life, health, renter’s
or home (if not included in mortgage)
Streaming service and subscription bills
With all this information in hand, now you’re
ready to begin filling out the spreadsheet.

Step #2: Calculate Your Income

How much income do you bring home each

month? How many times each month are you
paid? If you’re paid regularly through
paychecks from an employer, use your net
income, which is the amount of money you have
after taxes (federal income, state income, FICA)
are taken out.
If you are self-employed, work freelance, or
perform gig work we suggest using the lowest
monthly income you’ve had over the past year
as your baseline income. You will also want to
account for self-employment taxes when
estimating your monthly income from any of
these sources.

Be sure to include child support, alimony,

Social Security, or investment income.

Add up all these sources of income to get your

total monthly income. You may be surprised at
how much money you bring home each month.

Step #3: Track Your Expenses

Do you get to the end of the month and think,
“How did I spend so much money this month?”
That’s a common refrain. Tracking your
spending is a great way to find out exactly
where your money goes. Those streaming
services that you rarely watch may not seem like
a big deal until you add up the $9.99 monthly
charges – over a year that’s $120.

Tracking ALL of your expenses can help

pinpoint areas you may be overspending in and
help identify areas where you can make cost-
effective cuts.

Let’s start with housing, which for many people

is their biggest monthly expense. This category
includes your mortgage or rent, renter’s or
homeowner's insurance (if this isn’t in your
mortgage payment), and utility bills such as
electricity, gas, water, garbage collection,
internet services, and cell phone service.
Next is food. Here you want to include
groceries, eating out, pet food, household
supplies, and toiletries.
The transportation category includes car loans,
gas, and commuting costs such as parking
and/or public transportation. And of course, you
want to count car maintenance and repair bills.
While many people use an emergency savings
fund for these expenses, it’s still helpful to track
them so you have an idea of how much to set
aside in savings.
Medical expenses include health insurance
premiums, out-of-pocket expenses such as
office visit copays and deductibles, and
prescriptions.
In the social category, calculate the money spent
on movies, concerts, other special events;
clothing, club memberships, travel, and
discretionary spending.
While it may seem easier to label a lot of
expenses as miscellaneous, we suggest limiting
that practice so that you know where you’re
spending your money. Expenses such as

student loan payments, credit card balance

payments, child support, alimony, and pet care
do fall into this category.
An area we call “adulting” includes things like
life insurance premiums, extra principal
payments on mortgage and auto loans, extra
payments on existing credit card debt, and
charitable contributions.
Of course, we don’t want to forget savings.
Look at how much you are contributing to your
retirement accounts both through work and on
your own. Add up how much you are depositing
into your emergency savings accounts, and into
accounts for other goals such as a home down
payment, vacation, or education. You also want
to include money you invest outside of
retirement accounts.
Detailing your income and expenses in such a
manner helps give you a clear picture of where
you are spending and saving. Now, onto the
next step.

Step #4: Set Your Financial Goals

Information is power. Look at your present

financial situation, and you can see where
you’ve spent money and how much you’ve
saved. You have a complete picture of your
finances and can decide what, if any, changes
you want to make.

Ask yourself if your spending and saving

patterns are in line with your values and how
you want to live. What is most important to you
right now? Do you have more debt than makes
you comfortable? Is home ownership something
that you want to take on in the next year or two?

Draw a picture in your mind of what your ideal

life looks like and decide if your current
spending and saving patterns support that
picture. This is all about what you want and how
comfortable you are with your financial picture.
Step #5: Make a Plan to Achieve Your Financial
Goals

With your goals set now you need to decide

what steps to take to achieve these goals. If you
want to save more money toward a new or
existing goal:

Can you reduce spending to save more money?

Or
Can you increase your income?
Let’s look at the first option of reducing
spending. You’ve just outlined where all your
money is spent each month. Are there areas in
your budget, such as eating out or subscription
services, where you can cut back? What
expenses are you realistically able to reduce? If
your budget just doesn’t have any more room
to cut, which is the case for many people, then
maybe you want to explore ways to increase
your income.

Some options to consider to increase your

income:

Ask for a raise at your current job.

Look for a better-paying job.
Get trained in new skills that will allow you to
earn more money in your chosen field.
Find a part-time or gig economy job that works
with your schedule.
And maybe you can do a little of both. Perhaps
there are some areas in your budget, like
clothing, where you can reduce spending, while
also taking a part-time job, even temporarily.

Everyone’s situation is different and only you

can decide if any of these options are viable for
you and your family. This isn’t the time to
compare yourself to others.

Step #6: Sticking to Your Plan

With your plan now set you want to set yourself

up for success. Follow these easy steps:

Set up automatic saving so that you don’t have

to remember to make your regular saving
deposits. Once you have your automatic system
in place, you will save without even having to
think about it. Do remember to look periodically
at your saving account balance so you can see
the balance growing!
Reassess and adjust your plan whenever you
have life changes such as marriage, a new baby,
a move, or a promotion. During any of these
types of circumstances, you may want to
increase your automatic saving amount or alter
how much money you are spending in certain
areas.
Looking for ongoing encouragement to reach
your saving goal? Take the America Saves
Pledge and let America Saves be your
accountability partner. You’ll receive easy-to-
use and relatable tips, resources, and nudges
designed to help you stay on track toward any of
your saving goals.

Give yourself credit for working through all of

these steps. You’re on your way now to living
out your plan for your financial goals!