3 Ways To Be Financially Fit
Growing up, Cheryl could be found in the seat of her grandfather’s car, accompanying him to appointments. An entrepreneur whom she called Papa, Cheryl credits him for honing her business skills. She recalls fondly, “I spent a lot of time helping him preparing summons and keeping rent payments in his ledgers.”
Now she helps others with financial planning, investing and more. Follow her strategies to build your money muscles and get financially fit.
Get clear
First get organized. Know where you are and where your money goes—what are your cash inflows and outflows. You’d be surprised by how many women have no idea how much they earn and how they’re spending it. Most importantly, what your short and long term goals are.
Have a firm foundation
You wouldn’t build a house on a weak foundation, so don’t build your finances on one. Here’s how.
Be prepped for emergencies
Pay yourself first and put some savings aside. Set up auto-deposits, so you aren’t tempted to spend it. This establishes a fund, which is only used for emergencies, like getting laid off, health issues or home repair. Your goal is to put away at least 6 to 8 months of living expenses.
Cut out debt
You want debt at a manageable rate or gone. When your foundation is weak, you’ll have big problems—you can’t invest. If our debt is costing us more than we can earn, then it’s sometimes better to accelerate the payments before we can move on to investing.
Get insured
Most people focus on insuring their house and their car, but don’t think about themselves. We need to prepare in the event we lose our income, get sick, become disabled, die too soon or live beyond our savings.
Accumulate your wealth
Grow it
The key to success is asset allocation—consider your age, time horizon for particular goals and your risk tolerance level.
Preserve it
Learn how to structure your money smartly to mitigate income, gift and estate taxes. There are also estate structures that can protect assets from creditors. It doesn’t do us any good to accumulate all this money and lose it.
What advice would you give to your younger self?
Don’t worry so much. I worried a lot about reaching my goals and was a bit of a perfectionist.
How do you navigate between home and work?
We raised our three children and four others. One of my friends died of breast cancer and we raised her two, then when my sister-in-law was going through some health issues, we took care of our niece and nephew for a period of time. I had a lot of help. Everyone pitched in. My husband and I have a partnership, we don’t have traditional roles. He’s the foodie, so he cooks, and he didn’t mind taking care of the children when I was in law school.
Any hobbies?
My favorite activity is swimming. I learned how to when I was 50 years old and can swim a mile at a time now.