Tiffany “The Budgetnista” Aliche built a seven-figure business teaching others the same financial lessons that she learned from her parents. Now, she shares her message all over the world as a Financial Wellness Advocate for Prudential and the founder of The Live Richer Academy.
Aliche’s story shows that the lessons children learn from their parents often have a long-term impact on the financial decisions they make as an adult. When she was younger, her father, a CFO and accountant, did whatever it took to ensure his children had a positive relationship with money. His teachings still affect how she saves and spends money.
Black Enterprise caught up with The Budgetnista to discuss some of the money tips that her father taught her in order to help parents get their children on the fast-track to financial wellness.
1. Manage Your Credit Card Balances
According to a report released by real estate data company Clever, credit card debt ranks as the most stressful type of debt for Americans. For millennials, credit card debt is right under student loan debt in ranking but the cost of credit card debt causes many to pay hefty fees and interest payments every month.
What’s the best way to manage your credit card balances and avoid monthly stress? The Budgetnista recommends that you pay off your credit card balance in full every month.
“I didn’t have credit card debt because very early on in college, my father taught me ‘you get your credit card bill and you pay it off in full every month.’ Teach your kids how credit cards work and how to use it responsibly before they get their first card.”
2. Don’t Be So Quick to Buy a New Car
The Budgetnista saved for a year before buying a car for $5,000 cash. Her father advised her not to get a brand new car because it is a depreciating asset and a guaranteed loss of your investment. “So, I had a car and no car note. My insurance was around $62/month because when you own a car outright, your insurance reflects that.
When thinking about making your first car purchase, take into consideration the monthly costs involved and how that will impact your pockets. Because a new car depreciates faster than a used car, you could potentially owe more than what the vehicle is worth.
3. Start Saving for Retirement Early
The earlier you start saving for retirement, the easier it will be to achieve your goals and be prepared for the unexpected. As soon as The Budgetnista graduated college and received her first job, she inquired about retirement plans. “I asked my company if they had a 401 (k) plan. Because I worked for a nonprofit, they had a 403b plan with a matching program.”
The Budgetnista also believes that “it is your younger self’s job to look after your older self.” Realizing that most people are disconnected to their older selves, The Budgetnista named the older version of her “Wanda.” “When I make financial choices now, I’m conscious about what it is going to mean for Wanda.”
Once you’re ready to get started, you can work with a financial adviser to explore target-date funds. If you would like to put your kids on track for retirement success, you can open a retirement savings account for your kids and help them accumulate $1 million before they reach 50.