How many of you are resolved to save money or dig out of debt this year? Want to do even more than that?!? Join me each week for Financially Savvy Fridays where my fellow financially astute bloggers and I will explore everything from household budgets to student loan debt to smart shopping strategies and more. The best part is we all come from diverse backgrounds, both financially and demographically, providing a wide range of perspectives to help you formulate your strategy for financial success. To kick off our series, meet each of the contributors and join us this month for varying perspectives on How to Build a Budget.
Use Financial Statistics, Don’t Be One
If statistics are any indicator, I should have been a high school drop-out living below the poverty line. My mom was 19, single and and in her second year of college when she found out she was pregnant with me. In December 2008, the SCAA published findings that children born to teen mothers show lower levels of school readiness, are less likely to complete high school, are more likely to be unemployed and become teen mothers themselves.
But I wasn’t and am not any of those things.
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The Value of Education
The same report shows only 5% of teen mothers complete at least two years of college by age 30 and less than 2% obtain a college degree. I was fortunate. With the support of my grandparents, my mom was the 2%. My grandmother watched me, while my mom finished her degree in Education. She will retire this year after teaching early elementary school for more than 30 years. She knew the importance of a solid education, and passed her passion for learning on to me. She read to me from the second I was born, and every day of my childhood. She also modeled and imparted the importance of a strong work ethic, going to school by day and waiting tables by night to pay for it all.
I graduated second in my high school class, and earned a partial scholarship to the University of Notre Dame. I graduated summa cum laude with a BBA in Finance and Business Economics, and went on to work as a financial analyst, first in investment banking, and later, for both fundamental and quantitative equity hedge funds.
The Importance of Financial Intelligence
My upbringing taught me the absolute necessity of education. My career taught me the importance of financial savvy. And given the financial profile of the average American, financial intelligence is something too many lack. The average American household carries more than $200,000 in debt across mortgages, credit cards, student loans, automobiles and more. And while not all debt is bad – I graduated with $60,000 in student loan debt and carry a mortgage too – it has to be managed and chosen wisely. All major expenditures should be evaluated as you would any investment: what is the potential return on the investment and how does it compare to the alternatives? Does taking on the debt produce a worthwhile long-term return?
Analyze It All
Today, I am a married, stay-at-home mother of three children ages 4 and under in the high cost of living suburbs of New York. I manage our daily household finances, and have always thoroughly evaluated major expenditures. But the transition from being an equal contributor in a double income household to a single income household forced me to apply my financial analytics to all our household spending.
There isn’t any household category I haven’t run through a spreadsheet. From my too frequent Dunkin’ coffee stops to supplying two kids in diapers, I’ve analyzed it all. Throughout the series, I will share both my findings (where to get the best deals on diapers) as well as the skills and how-to to analyze your own expenses.
Meet the Contributors
Each month, Financially Savvy Fridays will cover a specific topic – and one contributor will write their take on it each week. We will kick things off in this month with How to Build a Budget. So download those bank statements, sharpen your pencils, and visit each of the contributors below to learn about their background and how it informs their Financial Savvy.