Helen Lee Schifter: Budgeting Tips for the Working Class
Many people in the working class struggle to make ends meet every month. This is due, in part, to a lack of financial education and awareness. That’s why learning from those who have successfully managed their money is important. Helen Lee Schifter is a former arbitrage trader with much experience in the finance industry.
Helen Lee Schifter began her career as an arbitrage trader on Wall Street and later became an editor at Hearst and Condé Nast. She is a graduate of Phillips Exeter Academy and Amherst College.
The following are Schifter’s tips for personal budgeting:
1) Know Where Money is Going
Track personal spending for one month will help the working class see where their money is going. They may be surprised by how much they’re spending on unnecessary things.
If they find out that they are overspending, Schifter recommends creating a budget and sticking to it. A budget is a roadmap for their finances. It allows them to see where they’re spending too much and where they can cut back.
Creating a budget may seem daunting, but plenty of resources are available to help them get started. They can use a spreadsheet or budgeting software like Mint or YNAB. Or, if they prefer a more hands-off approach, they can sign up for a service like Trim or Truebill, which will negotiate their bills and cancel unwanted subscriptions on their behalf.
Once they have a budget, they should review it regularly and make adjustments. The budget should be flexible. As the income or expenses change, so should the budget.
Suppose they find they’re struggling to stick to their budget; Schifter recommends automating their finances using a service like Acorns or Digit, which rounds up their purchases to the nearest dollar and invests the difference.
Automating their finances can help them stay on track, but it’s not a cure-all. They still need to be mindful of their spending. Even if they’re automatically transferring money to savings, they could still end up in debt if they’re not careful.
2) Investing in Themselves
One of the best things the working class can do for their finances is to invest in their education and career. The more they know, the more earning potential they have.
Investing in themselves doesn’t necessarily mean going back to school. There are plenty of ways to learn new skills without incurring much debt. They can take online courses, listen to podcasts, or read books and articles on personal finance.
And if they want to make a career change, they should not be afraid to start from scratch. They don’t have to have a specific degree or experience level to succeed. If they’re passionate about something, they should be willing to work hard to make it happen.
Of course, investing in themselves takes time and effort. But it’s worth it in the long run. The more they invest in their education and career, the more likely they will achieve financial security.
3) Living Below Their Means
One of the best ways the working class can stay out of debt and build wealth is to live below their means. To be financially successful, they need to spend less than they earn.
Living below their means doesn’t mean depriving themselves of all the things they enjoy. It simply means being mindful of spending and making choices that align with long-term goals.
4) Make a Plan
One of the biggest mistakes people make in personal finance is failing to plan ahead. If they don’t have a goal, it’s very easy to spend their money without thinking about it.
When setting financial goals, Schifter recommends that the working class should start small. She advises them to pick one thing they want to save for, like a down payment on a house or a trip to Europe, then figure out how much they need to save each month to reach their goal. Once they have a plan in place, they should stick to it.
Personal finance is a complex topic, but it doesn’t have to be overwhelming. By following these simple tips, the working class can take control of their finances and achieve their financial goals.