"Thoughts on Attending a Financial Planning Session"
Starting a new job is always fun and exciting. You finally feel free from your last job; your future seems glowing. Beginning something new or making a change does have its challenges. I'm referring to financial challenges and decisions that are often overlooked. A few days ago I started a new position and I couldn't be happier. For me, this was not only a career advancement; this was the start to my long lasting financial foundation. Now that I have this new position it is imperative that I make sure that I am contributing to my 403(b).
On Saturday I had the opportunity to attend a personal finance and retirement session. The session was very helpful in providing deeper insight to how much I should be saving and where my savings should go. This is very important to me because I want to make sure that I just have a safe and sound financial future. Now that I have a new position it is very imperative to me that I am headed down the right path.
One thing that really stuck out to me was that the financial planner advised that oftentimes many people contribute too much of their funds to one account and not enough to another. For a long time I was under the assumption that having a savings account was the "Holy Grail" of savings. As I got older I soon realized this simply was not true. I was very intrigued to find out that people should only contribute about 5% of their paycheck to their savings account. When an appropriate amount is reached, about 6 months of your lifestyle expenses, one should focus on reallocating funds to different areas. This is something that I never knew growing up. I was always told that having a savings account was the best thing you could do for your money. Little did I know saving account doesn’t really work in your favor. You put a lot of money in an account, but you don't attract high interest rates. So, in short, I could theoretically have $100,000 in the savings account, but not make any money back in return. Your money is not working for you.
Many people are not properly educated about personal finances, budgeting and savings. This is something that often happens in the black community. We are not properly educated when it comes to money or what we should start saving in order to ensure a better post retirement future. Most of our lives we try so hard just to get by that we often neglect a key aspect: saving in general and saving for our retirement. Typically, when we reach retirement age we don't have enough money saved to live the same lifestyle that we had when we were working.
I believe that the information I received was very important. It is a critical time for me to start saving money, so I can focus on my future and the lifestyle that I wish to live when I get older. Financial freedom is empowerment.
By: Rachel M. Roberts via EIC Le'Keshia Smith