September 22nd is Business Women’s Day, and what better way to acknowledge this than to think about some great financial tips I have learned from the Business Woman in my life – my Mama.
My Mom is a Real Estate Broker in California and started her own company quite a few years ago so she could be her own boss and make her own schedule. She also works from home, so I think her career choice is pretty awesome. I’d love to have that kind of control and flexibility, but my career path has taken me elsewhere for the time being. She is definitely financially minded, being a former bookkeeper and having her Broker’s license and all. Here are just a few smart budget and finance tips I learned from her.
- Emergency fund. Always have some money in a savings account for emergencies. You never know when someone can lose their job, get injured and be out of work, or even if you end up with unexpected home repairs (I’m looking at you hail storm that damaged our roof). Having something set aside in a “no touch” fund can really help you get out of a bind.
- Own rather than rent. She doesn’t just work in real estate transactions for the fun of it, she really believes in the investment opportunities of owning a home. Renting an apartment these days costs just about as much as a mortgage, so if your credit is in good shape and you’re settled in a place you’re going to be a while, owning a home makes sense. We bought a home when we first moved to Texas, and after moving to another area of Houston and selling our first home, we did turn a profit. That house was a great investment and we didn’t have to do anything special other than live our normal life and take care of our home.
- Be smart about splurging. A fun vacation or new clothes are definitely something to look forward to, but the rest of your budget needs to be in a good place before a splurge should happen. If you’re struggling to make ends meet, maybe it isn’t time for a family vacation. However, if you’ve earned some extra income or were able to put away some money toward a fun activity, by all means, enjoy it.
- Don’t fall into the trap of credit card debt. Credit cards can be handy when you don’t want to carry cash or have too many withdrawals with a debit card, but they should only be used if you can pay off the balance at the end of the billing cycle. I always pay my card in full and don’t charge more than what we could otherwise pay for in cash if we withdrew from our checking account. We use credit cards as a convenience of paying one bill at the end of the month instead of multiple throughout. I have never carried an outstanding balance from one month to another, always paying off the previous statement amount before the due date.
- Do use credit cards to build your credit. Building on the previous bullet item, credit cards are a great tool to build your credit history. Again, the statement balance must be paid off in full each month, but having several cards where you show how responsible you are is great for building credit. I had several cards going at once when I first started working so that when we got married and bought our house, I had some credit history to show.
There is so much we can talk about in the topic of budgets and finances, but I’ll leave it at these simple tips. What financial tips have you learned from the business women in your life?