Guest blog on Informed Finance with Annette Harris:
I spoke with Michele Jones, the owner of Michele Jones Financial Coaching, to find out how she helps her clients reach their financial goals through one-on-one coaching. Michelle works with individuals, couples, and small business owners to create financial goals. Michele helps her clients create a monthly budget, pay off debts, save for emergencies, plan for retirement, and have financial peace.
She is also a Daily Money Manager, helping manage her client's day-to-day expenses such as bill pay, monthly budget, and financial goals. Michele removes the financial burden from her clients so they can focus on what matters most: retirement, growing their business, or just enjoying life more.
What is Financial Literacy & Purposeful Teaching?
Financial literacy is knowing how to manage your money to achieve your personal financial goals. Sadly, I do not believe that it is taught. Most people watch how their parents handle money and learn from them. Even if the parents have good money habits, without the purposeful teaching of how to manage money, most kids leave home with no fundamental understanding of money and how to manage it to their benefit.
Many individuals struggle with eating out and grocery shopping. What can they do to control their grocery and eating out spending?
The best advice I give to individuals struggling with eating out and grocery budgets is to pay cash. I call these "budget busters" if you don't control them. Decide how much you're going to spend on each category and pull cash each payday. Once the money is gone, then you're done spending in that category. Plus, I have found people don't like seeing the cash in their wallets disappear. It's a pain point that's been created. This makes people slow down their spending and think about it before handing over their cash.Debt Management
What are a few ways that individuals can manage and reduce their debt?
In my opinion, it is important to get out of debt so that your hard-earned money is going to you and not to the debts. To succeed financially, one must learn to manage their need for instant gratification. Putting something on a credit card or making payments means you don't have the money for it at that moment. So you should save or forgo that purchase.
I work with my clients using the debt snowball method—smallest debt to largest debt. I like this one best because it allows for some quick wins with paying off small debts in the beginning. I believe the psychological value of those wins is important. As you get to the larger debts, you've already won so many times that your confidence is built, and you know you can finish paying the debts off.
The main reason to pay off your debts is that you will have more money for the things that matter most: savings, vacations, college for kids, and retirement. It is your money, and you will get to choose how to use it instead of paying for choices from your past. Your money works for you instead of for some other business.
What are some common mistakes people make with student loan debt?
The biggest mistake people make is not focusing on paying them off. During Covid, when no payments were required and no interest accrued, many people stopped paying them. If you had the funds, this would have been a perfect time to dump money on the student loans because 100% of your payment was going to the principal. Many people were waiting for debt forgiveness, but you did sign for the loan, so you owe the money. I'm not a fan of student loans (having had them myself), and I would love to see people stop paying the ridiculous tuition and force higher learning to re-evaluate the value they are offering to their students.
Investing in Your Future
What are a few things we can do to invest when we have limited knowledge of how to start?
Once you're debt free and you have an emergency fund, investing is important. The first piece of advice is if your employer offers a 401(k) with a match, you want to put in up to the match. It is free money and doubles your investment immediately. I suggest finding a Financial Advisor you trust to help you make an educated decision. I work with my clients to give them knowledge about investing so they feel they can make a good choice when they meet with a Financial Advisor.
Why is it important to begin investing in a retirement fund early?
Compounding Interest! This is an amazing thing when it comes to investing. If someone invests $100 a month from 20-30 years old and then stops, when they retire at 65, they will have $668k with an investment of only $12k. But if someone starts at 30 years old and invests $100 a month until they are 65, they will have only $380k and have invested $42k! Begin as early as you can.
Managing Risk & Estate Planning
Why is insurance so important?
Everyone should have health and car insurance, but I also think it is important to have renters insurance (homeowners is usually required with a mortgage). Life Insurance is critical if someone is counting on your income, like a spouse or kids. A good 20-30 year term insurance ten times the amount of your take-home pay will cover your salary should something happen to you.
I love helping people who are struggling with finances learn to manage their money. Hope is critical in life, and I love giving hopeless people hope and a dream. I have been there. My husband and I lost our home in a short-sell and had to move in with my parents for two years, with a 2-year-old! We paid off $114k in debt and purchased a home over three years ago in Orange County, CA. It's possible to change your financial future.
Five Things With Michele
How do you start the day? Slowly with coffee and prayer.
What's one goal you've set for yourself this year? I want to double the size of my coaching business.
What's your favorite affirmation to speak to yourself? I am smarter than…(whatever I'm struggling with)
What's one thing you do for self-care? I get pedicures.
How do you end the day? Talking with my husband about our day and what we each have coming up in the next few days.