Homeownership is one of the staples of the American dream. You work hard, you save money and pay bills on time. So, why is the purchase of a home out of reach for some people? It is partly due to the banking industry and unfair lending practices. Also, this is attributed to bad consumer credit and lack of funds.
We are living in times of inflation; again. It makes it hard to stay on top of basic living expenses and amenities. However, in spite of inflation homeownership is achievable. So is good credit. We can start by trying to reduce our debt-to-income ratio. This is one of the factors banks use in the application approval process. Lowering debt-to-income ratio means to have more money coming in than going out. Many times we spend more and save and/or invest less.
Paying bills on time also boosts credit scores. If you are in the market to make a home purchase, you may want to pull your credit report. By doing so, you have the opportunity to check for accuracy and any errors that may be preventing you from obtaining a loan. Also, you can assess what accounts you need to pay off. Correcting errors on your credit report takes a little effort, but it is within your power to change it in the best interest of your financial future.
Did you know? It wasn’t until the early 70s that women were allowed to purchase property in their own name. In years before that, a women could not own property without her husband co-signing.
Homeownership is lacking within minority communities. That brings me to the Focus on Finance for Women’s History Month. Benaisha Poole-Watson fits the theme of ‘Women Telling Our Stories’. She is a catalyst in the real estate market and understands the challenges. Being the owner of Prime One Home Loans, she not only owns the bank but helps to educate about building wealth. She has created solutions for people who are having hardship with obtaining a home loan.
To add to that, she is also a military veteran. She has served in the United States Air Force. Mrs. Poole-Watson, among many other African American women, have broken down the barrier of women serving in the military. Let’s salute Benaisha Poole-Watson for her contribution to the country through her military service. Also, for opening doors and creating change and help in obtaining real estate.
Did you know? At one time, women were not allowed to serve in the military outside of kitchen and domestic duties.
Focus on finance for women’s history month and learn more about the inspiration of Benaisha Poole-Watson at Home – Benaisha Poole Watson
Teaching our children the value of money is about providing the tools they will need as they grow up. One of the basic things we know about money is that it does not grow on trees. Kids don’t think about that when they want something. All they know is gimme, gimme, gimme while they have their hand out. As parents, we have seen this all too many times. It is up to us as parents to educate our children about the value of money.
A conversation needs to happen with our children so they know and learn about financial responsibility. I don’t mean we need to sit down and go over the bank ledger or spreadsheet of all the household monthly bills. After all, they are kids, they are not interested in this. But, they do need to know the basics. I must confess that I did not do this with my child. Looking back, I wish I had. That doesn’t mean it is too late for some of you.
A simple way to do this is when we are shopping at the grocery or department store. If they see something that is not in the budget or on the list, they want it right? Well, that is when we have to first, learn to say no. We have to let them know that everything on the shelf is not for the taking. Maybe today they cannot have that shirt or snack but the next time; maybe.
Secondly, we must also let them know not to spend everything they have, just because they have it. Save some money for a rainy day. Just because you have $150 does not mean that you should spend it all. Save a portion of this so that you will always have something in your pocket.
Ways to teach children about money
GET A PIGGY BANK
A piggy bank is a good start depending on the age of the child. But, for an older child they may want to use something else. A shoe box, canister, or an envelope. Anything they feel comfortable stashing their money in, let them choose. Encourage them to count their money at least once a week. This will build excitement and they can see how much their money is growing. Let them know also, that not everyone needs to know where their money is or how much they have.
GIVE AN ALLOWANCE
An allowance does 2 things. The first thing is that it teaches the child responsibility. They know in order to get their allowance they have to do something, like chores around the house. They are not just being given money. Secondly, it gives them a sense a pride to know that the money they are getting is because they worked for it. Anything they use the money for will be more meaningful to them.
TAKE YOUR CHILD TO THE BANK
Going to the bank lets them see how bank transactions work. This way they will know how to make a deposit and/or withdrawal. I know this sounds simple but there are some out there who do not know how to complete a bank transaction. Alternatively, you can open a bank account in your child’s name and show them how to balance their account.
LET THEM SHOP WITH THEIR MONEY
When making a purchase, let them use the money that they have saved. When they realize that they are using the money they earned, they might be a little more selective about how much they spend and on what they spend their money. It may give them a healthier overall attitude about spending. When they learn that Mom and Dad are not just going to buy something for them, they will cherish the item more and be smarter about what they buy.
EMPHASIZE THE IMPORTANCE OF PAYING WITH CASH
Instead of credit cards pay in cash. I know you are thinking, kids don’t have credit cards. Well…some do but that is for another discussion. This is just something to mention to them in their early life, to prepare them for later. Hopefully, they will remember this lesson. When paying with cash you can only spend up to the amount that you have on hand. You cannot overspend for something that you know may be overpriced. Also teach them to comparison shop. At the grocery store have them compare the same or similar products and not just grab the first one they see. Most times, the more expensive products will be at eye level and the easiest to find. This is what the retail giants want us to do as consumers.
Do’s
Do encourage paying with cash- this helps to prevent overspending
Do take care of personal belongings- taking special care and pride will make things last longer and keep them looking newer longer. You never know when/if you will get another
Do shop around for the best price- always check other options available for the item you are looking for
Do stress the importance of counting change after each transaction before leaving the counter
Don’t just buy the first item you see on the shelf-Compare prices or look for sale items
Don’t spend all the money you have- Save a portion and spend wisely
Don’t be careless with your things. Put things away in their proper place so that it does not get damaged
Don’t loan an amount of money that you cannot afford to give away- We don’t always get paid back the money we lend; so be sure what you lend you can afford and not be adversely affected if you don’t get the money back
So, what do we know? We know that money does not grow on trees, someone has to work to bring that money into the home. Children need to learn this. I’m not saying to never, ever again buy anything for them. All I am saying is to help them understand the value in what they receive.
Kids also need to know that when they are being given something, to take care of it. Don’t treat it like tomorrow they can just get another one. When we see them taking pride in receiving then we are more inclined to give a little more. If a child demonstrates that they appreciate what they have by being responsible with it and taking care of it, this is always a good thing.
Another thing they should be taught is that money is not always about spending. Keep some in your pocket. We are not trying to keep up with the Joneses. Just because your friend down the street bought something new, so what!! You mind your own pocket. That new pair of shoes or new video game will be out of style soon. Keep your pocket full. Keep your pocket full.
