Check out some money basics from “Your Financial Preschool Teacher.”
- Most Americans don’t get a good financial education during childhood.
- Tiffany Aliche grew up talking honestly and openly about money, which helped her when she ran into financial difficulties.
- She has 10 solid tips for improving your money management skills.
Tiffany Aliche is a finance educator, author, and podcast host titled The Budgetnista. Growing up in a household where money was discussed openly and freely, Tiffany found early success saving money and buying a house in her twenties while working as a preschool teacher. Unfortunately, she later ran into trouble with her job and debt, and had to rebuild her financial life from scratch. Now her mission is to teach Americans money literacy, with a particular focus on young people (indeed, she has referred to herself as “Your Financial Preschool Teacher”). Thanks to Tiffany’s efforts, her home state of New Jersey now has Act A1414, “The Budgetnista Act.” It requires middle school students in New Jersey schools to learn financial literacy.
Tiffany has 10 steps to “be good with money.” They are designed to explain the basics of good money management and then expand on those basics.
1. Budget building
Not only do you need a budget, you also need the right bank accounts and automations (e.g. auto-payment and direct deposit) to support that budget. Without a budget, it’s harder to see where your money is going and where you can save and learn to spend better.
2. Save like a squirrel
Tiffany believes in the oft-repeated financial advice that you should have at least three months of emergency spending in your savings account. You also need to save for other financial goals like investments.
3. Get rid of debt
To get out of debt, you need to know how much you owe and to whom. Then you can make a plan on how to get out of it using both online bill payment and automatic payment.
4. High score
Did you know that you can request three free copies of your credit report per year, one from each of the three credit reporting agencies (TransUnion, Experian, and Equifax)? Your bank may also offer credit monitoring. Tiffany Aliche says you should aim for a credit score of 740 or higher.
5. Learn to earn
Tiffany also encourages people to invest in themselves by keeping track of their skills and contributions at work, and using that information to earn a raise. You can also take on a side hustle and make more money using these skills.
6. Invest like an insider
Investing for retirement is another important money transfer. Tiffany notes that it’s all about figuring out what your goals are, creating an investment plan, and being comfortable with your money to make it grow.
7. Get good with insurance
Having the right insurance coverage is paramount to your financial security. You should make sure you have the right type of coverage for your life and situation, including life insurance, which is not required as is often the case with auto and home insurance, but is still a wise purchase for your peace of mind.
8. Get rich
Tiffany advocates learning how to calculate your net worth and then creating a plan to increase it based on your financial goals. This should be a monthly practice in your overall money management plan.
9. Choose your money team
Having the right financial professionals by your side throughout this process is critical to your success. This may include a financial planner, a chartered accountant, an insurance broker, and an estate planning attorney.
10. Leave a legacy
Tiffany notes that no matter how many assets you have, you need to have a plan for what will happen to them once you’re gone. Take stock of your assets (real estate, stock portfolio, even personal possessions like valuable jewelry) and work with an attorney to figure out where they will end up.
Budgetnista’s tips hit most of the financial basics that unfortunately many of us didn’t learn in school. The first five will help you with the basics, while the last five focus on helping you maintain and grow your wealth. Many people have had to find their own way when it comes to personal finance and it’s hard to find someone who doesn’t have at least one financial regret to share. Tiffany Aliche’s financial advice is sound, accurate, and actionable, and her tips are worth considering.
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