The Advice
Black Enterprise and Lee Baker, a certified financial planner with
Apex Financial Services Inc. in Tucker, Georgia, developed a plan for Williams.
Develop a formal budget. “No more budgeting on sticky notes. She needs a more organized, consistent budget,†says Baker. “She needs to know where all her money is going in order to meet her goals and make changes,†he says. Williams created a budget on Mint.com, which revealed her expenses to be about $1,900 a month, not including gas. The information inspired change. “I’m looking forward to paying off my car this year and I’m also considering other cost-saving cuts to my budget,†says Williams.
Increase emergency savings. Williams has $3,000 in her checking account and $1,000 in savings, and has been using both as her emergency fund and for her short-term savings goals. It’s important for her to know the difference between the two. A savings account is for short-term planned expenses; an emergency fund is designated for unplanned expenses. Baker would like to see her have $15,000 socked away. She can use the $2,000 contest winnings to get started. Despite her good intentions, Baker doesn’t think Williams should plan on giving more than a couple hundred dollars on a one-time basis to her nephews for college. Instead, she should direct her nephews to scholarship opportunities.
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