offer sufficient disability coverage, she should explore getting supplemental disability insurance on her own.
James must begin tracking her monthly spending so that she can account for each penny. Once she has a record of expenses, she will know what she can cut. She should look for ways to create money in her budget, such as raising the deductible on her car insurance, cutting costs on cable by eliminating premium channels, and switching to a cheaper service for her cellular and home phones. Such changes will add up, possibly as much as $300 a month, or $3,600 a year, estimates Perry-Mason.
Furthermore, Perry-Mason says James should consider refinancing her mortgage. “The rates are still great, and if she considers paying bi-monthly, the extra house payment paid per year will build up her equity and pay off her home early,” she says.
GENERATE MORE INCOME
James’ part-time job is a good start, but she should look at other cash producing opportunities. She and her daughters could sell any unwanted or out of season clothing to a consignment shop. They could also have a yard sale. Beyond those quick hits, James as well as her daughters should consider becoming focus group participants. “Basically, you give your opinion about a topic and they pay you $50 — $100 an hour,” says Perry-Mason. Becoming a mystery shopper is another lucrative alternative. A retailer will pay you to shop in its stores and fill out a survey, mostly about its customer service. The pay can be $35 — $50 an hour. You may also get free merchandise or eat for free if the retailer is a restaurant. Information about mystery shopping is available at www.secret shopnet.com and www.best mark.com.
James has less than $2,000 in her savings account. She needs a minimum of three to six months of expenses in case of an emergency. Perry-Mason suggests each family member begin putting spare change into a family savings jar. “They’ll be surprised how that money will add up,” she says.
Once James consistently cuts back on spending and creates additional sources of income, she’ll be able to enroll in the 401(k) at work, even if she can only save a small percentage of her salary. Perry-Mason asserts: “She’s got a lot of catching up to do, but it’s never too late.”
Perry-Mason says the girls should begin applying for scholarships now. Furthermore, James should use the child support and Social Security to put $25 monthly into a 529 College Savings Plan for Skyra and Brittany.
USE CONTEST WINNINGS WISELY
The $2,000 contest winnings can go a long way toward getting James started on her financial goals. Perry-Mason advises her to place $500 in a Roth IRA, and $100 in a 529 Plan for the girls. James should reserve $500 to pay off her Capital One credit card, $400 toward her emergency fund and $500 for a vacation fund.
Perry-Mason says James is an inspiration to other single parents. “[James] is not settling for excuses.” She’s taking steps that will create wealth.
Winner No. 42 DeShawnJames