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Lessons From
the Field
When my cousin’s husband unexpectedly died,
she was devastated by the loss. But in
addition to mourning her husband, she was
left without an inkling of an understanding
of her financial situation. Like many women,
she relied solely on the man in her life to
take care of her finances.
I cannot stress enough how important it is
to understand your finances. It’s great to
be young and looking for love, but there is
more to it than that. One lesson you can
learn from older women who are or have been
married is that you must have a plan! You
may want to start by asking yourself, “Where
do I want to be in 15 years?” A plan
requires that you have a clear idea of who
you are and what you want out of life.
We live in a market-driven society where
credit and capital are the keys to paying
for a healthy existence. If you want to be
healthy, then you need to have good health
insurance. If you want to be successful,
then you need to prepare and promote
yourself. If you want to build networks, you
need to buy access. |
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Gloria
Guerrero is the CEO of the Rural
Finance Development Corporation and
founder of the National Association
for Latino Asset Builders (NALCAB).
Photo by Sheri Mumme. |
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Finances are the basic building blocks for creating
a life for yourself. Learn to prioritize your needs
and implement your vision. Use discipline. The
choices you make involve your most valuable
resources — your mental, emotional, spiritual and
physical strengths. Only when all four of these
resources are in balance can you think about
creating the life you want.
Most Latinas put themselves second and don’t take
control of finances in a relationship. If you want
to avoid the pain of hardly being able to make ends
meet, you need to be conscious of the role that
sound financial management plays in your life.
Single or married, at whatever stage of life, it is
never too early or too late to educate yourselves in
securing a better future.
Here are the cornerstones: income, savings,
retirement planning and understanding and
maintaining credit. Through a better understanding
of what role each piece plays in your life, you can
successfully build a sound financial plan.
Income: Defined by being able to command money for
your skills and services, income will require
training, investment and a commitment to educating
yourself. Your skills and knowledge are the keys to
earning a good income and receiving the kind of
compensation you want and need to be successful.
Don’t ever be envious of a friend who is making more
money than you; you have the ability to get the
skills you need to become more successful.
Savings: In the United States today, we save less
than any other industrial nation in the world.
People are tempted by easy credit to live beyond
their means, but one of the keys to creating a
successful life is the ability to save. Put aside 10
percent of your income, no matter what it is, in
case you need it — if you get laid off from work or
have an emergency medical problem, for example.
Having money saved allows you the luxury of never
being at the mercy of fate or chance. It might be as
simple as saying no to one $5 cup of coffee a day.
Retirement: You are never too young to plan for
retirement. If your employer has a plan,
participate, learn how to match and get vested.
There are many tax-free ways to save for your
future. Many experts predict that by 2030 Social
Security will be bankrupt. This means you must take
responsibility for your future and not rely on the
government or any other source. If you do nothing
else, set up an IRA individual account and take
control of your future. It is better to be prepared
then to depend on others because of your poor
planning and lack of discipline. You exercise to be
in good physical shape; being financially fit is
just as important.
Credit: Credit can be your friend or your worst
enemy; it is easy to come by but can just as easily
ruin you. The reason for this is that most people
don’t understand that in a computer somewhere your
name and your social-security number appear,
accompanied by a numerical score. This score
dictates your ability to buy a home, a business,
personal property (such as a car) — even how much
you will pay for utilities. It’s simple: The better
your credit, the better your terms. But building a
good credit score requires discipline and an
understanding of how you can maximize your resources
through sound credit practices.
These topics may not be glamorous, but they are
critical to your financial happiness. There is
nothing more peaceful than being debt-free, owning a
home that builds equity for you and your family, and
having the serenity of contributing to your future
financial health. |
