You feel ill-equipped to form a budget

An action step for you would be to start jotting down things you have to pay for monthly and take note of how much you spend on different categories like food, entertainment, education, etc. To learn more, take a look at the first chapter of O.W.N. I.T. where Shantay lays out specific steps on how to create a well-working budget. You can also use the O.W.N. I.T. Budget Template to create your own!

You haven’t received formal financial education

Here’s some good news for you: you don’t have to have a major in finance to be great with money! You just have to be open and surround yourself with people who understand money, debt, credit, and investments. Some ways to educate yourself include looking at financial articles, reading books, following financial influencers, listening to podcasts, and going to financial workshops/ classes. A great first step for you would be to grab a copy of O.W.N. I.T. and start your education there!

You are not comfortable talking about finances

These are three reasons why some people don’t open up about their finances:

Privacy = Some of us have been taught that money matters are personal and personal matters are always kept private.  

Fear = Most of us close the door to talking about money because we feel more comfortable with people thinking everything is okay.

Judgement = A lot of us want to avoid being labeled or criticized for not knowing much about managing money.

Some steps you can take to become more comfortable in talking about your finances are going to your local bank or credit union and asking questions, reaching out to family or friends who you respect about money management, and opening yourself up to soak in information throughout your day--you’re on your personal financial journey!

You have a lower credit score

Did you know banks offer complimentary credit score tracking that is free with an account? They link to Equifax, TransUnion, Experian, which are all good places to check your credit score.

Make sure to get your payments in on-time, examine your credit report and check that everything being reported about you is correct. A lot of people have information on their credit report that needs to come off or may not be theirs at all. This will help you come up with a game plan and/or next steps to improve your credit score. 

You have yet to start a 401K

Don’t be afraid to ask your employer about 401Ks! Most employers match up to around 3-5%. If that’s not the case with your employer, you can look into IRAs:

Traditional IRA = Your investment earnings are not taxed as long as the money remains in the account.  Withdrawals are taxed by your tax rate at that time. This is advantageous for those who are in a higher tax bracket now than during retirement.

Roth IRA = While contributions are not deductible, meaning there’s no upfront tax break, withdrawals in retirement are completely tax free. Savers who anticipate  being in a higher tax bracket in retirement, can take advantage of those tax-free withdrawals.

Simplified Employee Pension (SEP) IRA = This is set up and funded for employees by an employer who gets tax benefits from the setup. Your earnings grow tax free and distributions at retirement will be taxed.  

Self Directed IRA = This follows the same rules as Traditional and Roth IRA’s except for one big difference: what goes in the account. With this IRA, you’re allowed to own assets such as real estate and hard assets like gold and privately held companies.  Many experienced investors who want access to alternative investments such as real estate and nontraditional businesses use this IRA.

You have yet to start a checking/savings account

An important next step for you to take is to go to your local bank or credit union and open a checking and/or savings account. The representative there will ask you several questions to make sure that they are putting you in the right account. 

Here are the benefits of credit unions vs. banks:

Credit Union = They will give you the most favorable rates in regards to saving, CD (certificate of deposit), personal loans, auto loans, and home equity loans.  

Banks = They will have more access to ATMs, overall technology, and different branches.