“Building Wealth As A Young Person”
With over ten years experience in the financial services industry and even longer as a frugal female, Lakiesha is the perfect person to tell us about finances. Her journey started at 15 years old when as a college student she set her mind to establish a fully funded emergency fund, open a retirement account and save for her post-grad. All goals she met by her senior year. Take a look at our convo about finances.
What would you say are some steps to begin building savings?
After you’ve decided that you want to begin building your savings, the first thing you must do is establish an account specifically for the purpose of saving. Ensure this account is separate from where your salary is deposited and where your bills are being paid from. Here are 3 steps you can use take once you’ve set up your separate savings account!
Simple Steps
STEP #1: START SMALL. Saving as little as $5.00 a day for days a week amounts to $25.00 a week and before you know it, you would have saved $100.00 in one month.
STEP #2: SET UP A ROUTINE. Determine how frequently you will set money aside or make deposits to your savings account. It can be weekly, once or twice a month, but it’s completely up to you.
STEP #3: STAY MOTIVATED. Enjoy the journey and remember it’s your race. Team up with a group of family members or friends and use them as a source of encouragement and accountability, especially if you are new to saving or if you ever get stuck.
What should millennials start to invest in?
When it comes to investing, it’s important for millennials to understand two things – risk and patience. Investing is not meant to be a “get rich quick” overnight venture and if this is what investors are promising you, then you should seriously think twice about the investment product before you dump all your eggs in that one basket! Generally speaking, persons should be mindful of their risk tolerance before they begin investing in anything, regardless of how harmless the investment may seem at first. Knowing your risk tolerance allows you to take advantage of the most favorable investment opportunities given your current financial situation while minimizing your exposure to risk of financial loss.
For starters, millennials can begin by investing in Bahamas Registered Stock (BRS) offered by the Central Bank of The Bahamas and Mutual Funds which are offered by local investment companies. The beautiful thing about both options is that is it very simple to get started and you are provided with all the details about the investment product and your portfolio upfront to help you decide if it will be a great fit for you at this time. It also allows for you to become familiar with what the investing and securities markets are about before taking on much larger and risker investments. If you would like to learn more about how to get started with investing locally, feel free to reach out to me at The Financial Academy and let’s have a chat!
What do you think is the biggest reason people mismanage their finances?
The biggest reason people mismanage their finances is due to high levels of debt coupled with a lack of financial education. Learning about proper financial management begins with understanding the importance of making financial choices that add value to your financial future such as saving, starting an emergency fund and setting financial goals.
Most of us are taught that credit is the “go to” option because it’s convenient but we have no idea of how much it can cripple our financial future. We live in a society where taking the easier route and applying for a loan while suffering the effects of maxed out pay checks with numerous salary deductions is simply the norm.
What are some steps a millennial in debt can take to get out of debt?
Write down the amount of debt you have outstanding. This does not exclude money owed to family members and friends – they need their money too!
Set repayment goals. Beside each individual and/or institution you owe, set a date for which you would like to complete all outstanding payments by.
Grab an accountability partner. Identify a close friend that will help you to remain committed to achieving your financial freedom goal.
What can people do to avoid getting into debt?
The key to avoid getting into debt is saving or investing as much as you can toward the cost of an item. We must get in the habit of saving consistently for what it is that we want in life and depending less on family members, friends, and financial institutions (if it is a situation where can be avoided). Yes, credit is very convenient because it provides immediate access to funding, however, credit comes with a price.
"You must think about how much this will cost you and more importantly, how long it will cost you!"
What are some steps a millennial in debt can take to get out of debt?
Start keeping a budget.
A budget helps you to discover areas in which your money may be working against you and provides an avenue of where you can contribute more money toward areas that can be of (greater) benefit. Ask yourself these three questions to get started with setting up a simple budget and see exactly where your money may be going!
What are my sources of income? (e.g. earned income, business income, rental income)
What are my monthly expenses? (e.g. food, shelter, utilities, transportation)
What else am I spending money on? (e.g. entertainment, impulse spending)
Read an article / Listen to a podcast.
Whether you would like to learn more about saving consistently, creating savings goals, setting small realistic budgets or controlling your impulse spending, reading and listening helps you to learn about additional methods you can put into practice to improve the way you think, feel and talk about money. Subscribe to a website or conduct a quick search of a “money topic” you struggle with. Perhaps, you can set aside a few minutes each day for an entire month to learn about how to improve your weak spots or listen to a podcast episode while exercising, completing chores and even running errands.
Use the 30-Day Rule.
The 30-Day Rule is a great way to begin controlling your impulse spending habit. Before you settle on grabbing that item off the rack and swiping for it, take a few weeks to reflect on the purchase you are about to make. Use the time to determine if this is a need or a want and if it’s an absolute need, take it a step further and use a few days to shop around for alternatives or even the same item at a lower price point.
Connect with Lakeisha A. Rolle, BBA, MSc, CFEI
Contact Information:
Website: www.thefinancialacademy.co
Phone: 1 (242) 821-2832
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