Money Smart Week was started by the Chicago Fed in 2001 to share resources with individuals and help them become more educated in their personal finances. It has grown to be a national event with classes, seminars, and programs offered all over the United States.
Our guest today is Karen Chan, a Personal Financial Educator working with the Federal Reserve Bank of Chicago to promote Money Smart Week.
When it comes to educating others about money, Karen Chan says budgeting and tracking expenses is critical to financial success – especially at times when changes to your life have occurred. Going over in one budget, or even two, doesn’t mean the budget failed, it just means you need to make adjustments to your other categories to make up for the short fall. Budgeting allows you to do this and keep you from spending more than you make.
It may seem old fashion, but it’s something that is a very usable tool to help you look at where your money goes: Break your budget into three buckets: Fixed expenses like rent and cell phone payment, variable expenses like clothing or groceries, and non-monthly expenses like car registration or emergencies.
The easiest way to build up savings is to do it in such a way that you never see the money to start with. Have money automatically withdrawn from your paycheck into a separate savings account or set up contributions to a retirement plan at work.
When it comes to credit for beginners, Karen Chan says get a department store credit card. You have no credit, so you available credit line will be small and the interest rate will be large, but Karen says you only use the card to start building a credit history.
Applying for multiple cards can indicate to a lender or landlord that you might be likely to over extend yourself.
Our show sponsors
Today’s guest, Karen Chan:
Karen Chan is a Personal Financial Educator, providing non-commercial educational information to groups. She is also a Certified Financial Planner, although she uses the experience for training instead of practicing.
For a quick bio of each of our show participants, head on over to our panelists’ page.
About our sponsor, BUZZ Index
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About our sponsor, Health IQ
HealthIQ is a sponsor of the Money Tree Investing Podcast.
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