To kick off Financial Literacy Month in April, we asked each of our board and staff members the following question:
What is your favorite piece of financial advice?
Their answers may just give you some new ideas to reinvigorate the way you handle your own finances.
Build up an emergency savings fund.
“Save enough to cover one year’s worth of fixed expenses, in case of an extreme emergency (i.e. medical, illness, loss of employment, etc.). An example of fixed expenses? Mortgage payment or rent, utilities, insurance.”
Save, save, save!
“Best financial advice I’ve received… always save something from every dollar you earn… and don’t be like your sister!”
Invest in yourself with a student loan.
“(My dad told me when I was 16…) Stop spending all your money on clothing and records! Seriously, best advice was that taking out a student loan was the best investment I would ever make in myself. Proved so very true!”
Automatic payments mean on-time payments, and good credit.
“Set up automatic payments on your credit cards so you are never late on a payment. Being late really messes up your credit score.”
Always have rainy day savings and donate what you can.
“The best piece of financial advice I ever received is to save some of your money for a rainy day and to share what you can with those who are less fortunate.”
Be strategic when investing.
“When investing for a non-profit organization select broad based index funds and use a buy and hold strategy. Warren Buffet is not the person that gave me the advice originally, but it is advice he gives.”
Learn the basics!
“How’s this for a financial ‘tip’ – mind you I received zero advice from my parents and school. My uncle suggested that my husband and I buy a house… scared us to death (what did we know about mortgages?) so we went to Europe for two and a half months instead! Then we moved to Ann Arbor and my husband began law school.
“Anyway: I told my children – and I believe this is true for everyone – that they should learn the basics about money. They should learn how to create their own money map (budget). If they delegate this to someone else (a partner, perhaps), they are giving away their autonomy, their future.”
Regular maintenance avoids higher costs later.
“I don’t know if this applies as a financial tip but tangentially, maybe? Bob, my long time auto mechanic, told me to always follow my car’s maintenance schedule – by paying for regular maintenance up front, you’ll reduce the risk of encountering more costly major maintenance issues down the road.”
A little savings goes a long way!
“This tip from The Way to Wealth: Four Rules always makes me stop and think. You don’t need to win the lottery to be rich. If you start at age 25, and save $90 a week, by the time you are 65, you will have saved $1 million, assuming a 7 percent annual return.”
Pay off loans with the highest interest rates first
“Your credit is important! So first pay the folks that affect your credit the most – your mortgage or your rent! And if you come across a little extra cash and you want to pay off one of your debts, always pay off the one with the highest interest rate first. This will save you the most money in the long run.”
Money is a tool, not a goal.
“Mine would have to be the concept, ‘Think of money as a tool and not a goal.’ My family never modeled personal financial management in a positive way, so it always had a negative association, involving bills and stress. When I heard this, and then read more about it, something clicked and I was able to shift how I behaved financially. Money has less negative connotations for me now and I’m able to see it truly as a tool instead of letting it be a source of stress. I’m still working on it, and it’s a quote I kind of use as a mantra when I need to remind myself that money isn’t the enemy.”
Keep your financial records straight.
“This is a tip I just gave to my daughter (a millennial): even if it’s mind-numbingly boring, set up a system to keep financial records. Make a few folders on your computer to keep (1) tax returns with all supporting documents, (2) bank statements and credit card statements, and statements you receive when a loan is paid off, (3) records that relate to your home, like a copy of the lease, or copies of the purchase settlement, real estate tax bills, utility bills, and bills for any upgrades of the home (like making it more accessible), (4) medical records (diagnoses and invoices), (5) insurance policies, (6) receipts for charitable donations (make sure to download something when you give online). Most of this can be downloaded online, or you have to scan it in. Then back it up. Regularly.”
Round up for an extra savings buffer, and don’t forget to be grateful!
“I keep a ‘bill log’ notebook and write in my monthly ‘obligations’. I also record my payments in my checkbook but round up so that I always have a running ‘cushion’. For example, if my water bill is $46.47, I record $50.00 in my register and if my electric bill is $108.56, I record it as $110.00 – that money really adds up at the end of the month for emergencies… or better yet, special treats (coffee, shoes, special Friday lunch). And one last thing – this is kind of corny – when I pay my bills, I smile and am grateful that I can afford to pay them!”
Pay down your mortgage for a financially stronger retirement.
“Do not be tempted by financial advertisers to use your home equity as a ‘piggy bank’ to finance vacations and cars, or to pay off credit cards. Your financial situation will be much stronger if you have a home without a mortgage when you retire. In the meantime, always take full advantage of any retirement plans offered by your employers.”
Save that loose change!
“We deposit all of our loose change – from coat pockets, clothes heading for the laundry, etc. – into a water cooler-sized glass jar. After a few months we’ve saved enough in this ‘rainy day fund’ for a vacation!”
“One of my favorite pieces of advice, given to me by a close friend who was quoting ‘financial guru’ Dave Ramsey, is to look at the month ahead and ‘tell your money where you want it to go’. You can’t reach your goals by working in reverse; instead plan ahead, map it out, and direct your money!”
Want to learn more about finances? Head over to our financial education page to see what other bits of advice we have to offer.