Written for the United Way by Stephen Harris
In a previous blog, we shared that ALICE “Asset Limited, Income Constrained, Employed” could be your neighbor, a friend or maybe you, affecting 22% of Hunterdon County NJ households. (https://www.uwhunterdon.org/meet-alice). And that doesn't include the 5% of our neighbors who live below the poverty line. So how can ALICE help themselves to become stable and improve financially? Fortunately, there are many resources available to help and a few key steps that you do on your own. We posed this question to Lacy Phelps, a local financial advisor with Edward Jones, United Way of Hunterdon County board member and volunteer Thrive Financially Fit Workshop leader. We will have additional steps and resources in future blogs, but these are important first steps. You can’t plan where you are going without knowing where you are.
- Determine where you are now financially: To have a clear outlook on your future, your first step is to evaluate where you are today. Consider your cash savings, debt and income. Often, our perception of how we spend money and the reality of how we spend money can be worlds apart. Budgeting helps you get a handle on what you spend each month and what income you have to cover those expenses and save for your future. Many people are surprised at how much they spend. I recommend that you track your expenses for one month to see how close you come to the amount you estimated. Then it will be easier to start making specific adjustments, if needed.
- Set measurable goals: With you household budget you can begin to set goals for where you’d like to be. When you start thinking about goals, try to be as specific as possible. This will help you determine if your goals are long-term, short-term or more immediate. Try to categorize them into the goals you’d like to accomplish in six months, one year, and five years. A more immediate goal would be to ensure you constantly have cash to address everyday spending needs. A short-term goal would be to build a fund for unexpected expenses and emergencies
- Review your budget and goals: Every month look at your spending versus your budget and adjust as necessary. A budget is a living document; it changes as your situation changes. Monitor your goals as well. It takes time to turn your financial ship around, so don’t get frustrated. In fact, by setting a budget and goals, you have taken the first step to moving beyond ALICE.
- Seek help: It can be challenging to solve your financial situation, yet you aren’t alone. Contact the United Way and NJ 2-1-1 to learn about the wide array to services you can tap into. A trusted counselor can help you decide which solutions and strategies can help you work toward your goals. Knowing more about the solutions and strategies available to you can help you make more informed decisions about where your money is going and achieving your goals.
Hopefully these first steps are helpful. Ask for help; that is why we are here. Make an appointment to discuss your financial situation with one of our coaches. Contact Claire for more information or to schedule your appointment today.