MAP OF MONEY
Published: July 14, 2020, at 9:08 pm E.T.
By: Nicole Dortch, CEO & Advisor at Madam CFO, Inc.
If creating a financial map towards freedom and independence seems overwhelming, try recreating your city from memory. Impossible or unachievable without resources and tools? Where do you point your compass? So take notes, and as we explain.
With your compass pointing towards dedication, determination, and personal experience, financial principles are the architectural design, and financial planning is the backbone of our city. To achieve the desired goals and outcomes requires discipline and binoculars to face the hard data.
The National Foundation for Credit Counseling (NFCC), issued a financial literacy survey for 2020 in the U.S.:
62% of U.S. adults have carried credit card debt in the last 12 months.
More than 1 in 4 (27%) admit they do not pay all of their bills on time.
Nearly 6 in 10 (58%) find it difficult to minimize their debt primarily due to unexpected financial emergencies (19%) or reduction of income (19%).
16% more U.S. adults say their household carries credit card debt from month-to-month than last year (43% vs. 37% in 2019).
The top barriers to homeownership among those who have tried to purchase a home were: 1) Rising house prices (19%), 2) Existing debt (13%), and 3) Lack of funding for the down payment, closing costs (13%), or both.
The top concern around savings and retirement is not having enough money set aside (13%), and having insufficient rainy day savings for an emergency (12%).
78% of U.S. adults agree that considering what they already know about personal finance. Many stated they could still benefit from financial advice and guidance to specific questions from a professional.
Write down your response to the following questions:
What is your total credit card debt for 2020?
What is your on-time payment percentage report with Equifax, TransUnion, and Experian? (compare all three)
How long will it take you pay-off your total credit card debt by the end of 2020?
How much have your paid, year to date, on unnecessary fees (ex. bank fee, late payments, interest charges), expenses, and emergencies?
How long have you had the current total credit card debt?
What is the average home sales price in your area?
What is your current debt-to-income ratio? (Total monthly debt divide by Total monthly income).
Do you have 8-10% (assuming FHA) ready to purchase the home of your choice?
How much do you have saved for retirement? Retirement Savings Goal is 25 x Salary.
How much do you have saved for an emergency? Emergency Fund Goal is six (6) x Monthly Expenses.
Do you have a personal financial advisor, strategist, or planner, you can call?
So, how do you measure up? Compare your data with NFCC’s data. Are you amongst the statistics or still have work to do?
Building the right financial path is critical or be subject to repeat the same process in which landed you in the current state. Based on the answers provided, use this data to draw a new path and take back control of your finances. In the end, start with the answers to the above questions and work with a financial advisor, planner or strategist to assist in achieving your goals efficiently.