If talking about money isn’t your favorite thing — it stresses you out or you’re just not that interested —you probably haven’t met Tiffany Aliche yet. Tiffany, aka The Budgetnista, loves talking about money, especially when she’s sharing ideas to empower students to take control of their own. The financial educator and author of the New York Times bestselling book, “Get Good with Money,” shares her advice in this free webcast sponsored by PNC My Finance Academy: The Basics of Growing, Maintaining and Protecting Your Money.
Being good with your money isn’t just about helping you build wealth. It also sees you through the hard times. I love showing students how easy it can be to put basic practices to work to help them achieve their goals and live their richest lives.
Tiffany shared these tips about money management with PNC My Finance Academy:
Start early. Knowing how to manage your money is a skill set that helps you throughout your life. “When you start practicing money management early, in your teens and 20s, you give yourself a head start,” Tiffany explains. “By the time you’re in your 30s, 40s and 50s, you can make smarter decisions and avoid many of the common mistakes people tend to make.”
Shift to a money mindset. Be open and curious about money so you can start looking at your finances and financial choices in a healthier way. Tiffany offers this advice: “When you consider making a purchase, ask yourself, ‘Do I need it, love it, like it or want it?’ Focusing your spending on the needs and loves versus the likes and wants puts you on a path to smarter spending.”
Take one bite at a time. Learning to manage your money can seem overwhelming if you try to master it all at once. Tiffany advises taking it one step at a time. “My parents, who were born and raised in Nigeria, taught me this African proverb: The best way to eat an elephant is one bite at a time,” she shares. “The key to money management is to focus on getting really good at one core skill set at a time and move forward from there. You might say, ‘This year, I’m going to practice budgeting. Next year, I’ll focus on the best way to save.’ That’s a great plan!”
Have an accountability partner. An accountability partner is someone on the same path as you, a financial buddy who will hold you accountable toward reaching your financial goals and expect you to do the same for them. They might ask you something like, “Didn’t you say you were going to save $20 this week?” You encourage each other to build good financial habits and to keep going. “Knowing that you’re not alone in this journey — that someone else experiences the same struggles and rewards — strengthens your money mindset and can make a big difference in your financial success,” Tiffany says.
Master the basics: budgeting, managing debt, saving and improving your credit score. Tiffany believes strongly in learning and practicing the fundamentals. “In the championship game, it’s great if you can hit three-pointers and cross-court shots, but that’s not typically what wins games,” she says. “What wins games are the basics: Can you dribble? Can you pass? Can you make basic shots? The fundamentals see us through in money management, too.” She recommends focusing on these four basic skills:
- Budgeting – “Budgeting is the cornerstone of your financial house,” Tiffany says. This physical picture (a spreadsheet or a document you create) tells you what money is coming in and what money is going out. If you don’t like the picture, you can take steps to change it — cutting back on entertainment or shopping for a less expensive phone plan, for example.
- Managing your debt – Debt may be inevitable for large purchases, such as a car, a house or your college education, but it’s really not meant for small purchases. Credit card debt can add up quickly and, if you don’t pay it off each month, will cost you in interest charges. Keep your debt as low as possible, because you never know when you might need that credit for an urgent, expensive need.
- Saving – “Save like a squirrel,” Tiffany says. “Focus on putting more money away in times of abundance, like squirrels do in the fall. Then you have savings you can tap into when times are lean, like squirrels in winter.” She suggests splitting your savings into two accounts: an emergency fund, to create security, and a fund to save toward your goals, which could include anything from a car or college to investing at some later time.
- Improving your credit score – “Think of your credit score as your financial GPA,” Tiffany says. “It tells potential lenders whether or not you are a good borrower. Do you pay back in a timely manner and eventually in full? If not, then you’re less likely to be able to borrow when you need to buy, say, a car or a house. If lenders do let you borrow, they’re likely to charge you more for the money you borrow.” Taking steps such as setting alerts so you’re never late with a payment, keeping your credit card usage low and regularly reviewing your credit report may help you improve your credit score.
Practicing these financial fundamentals now not only eases the stress of day-to-day money management but also prepares students to invest and create wealth for themselves as their lives progress. Feeling confident about your finances helps you feel confident about your future.