August 14 is National Financial Awareness Day. Dr. Ashley Lowe-Simmons, LCSW-C, FSW is a wife, mother, and clinician whose professional field is social work with an emphasis on financial social work. Lowe-Simmons is licensed as a therapist in Maryland, Virginia, and Ohio. She has been certified in financial social work (FSW) since 2018 through the University of Maryland, Baltimore. Lowe-Simmons’ niche is working with Black and Brown women who are primarily single mothers. However, she provides her financial coaching and other services to anyone nationwide.
The expert reminded that financial distress is one of the leading causes of stress. Since stress can lead to biological problems, and the management of it “is our lifeline during challenging financial times.” According to Lowe-Simmons, National Financial Awareness Day may be more important than we think. It offers a prime opportunity to plan how we may improve our relationship with money, while considering tips provided by Lowe-Simmons.
Q: How has the pandemic impacted the average American’s financial status, in your opinion?
A: In my opinion, the pandemic taught us not to rely solely on one income. The lower and middle-class families were hit the hardest financially. There was a survey conducted by the Pew Research that shows that almost half of lower income families have someone that suffered from wage or job loss.
Q: How can people who are spending more on necessities such as gas and groceries guard their credit scores if they must use credit cards more during the pandemic while inflation is rising?
A: Many credit card companies offer different perks like cash back, 0% APR for a limited amount of time, and points. One of the best techniques that I have taught clients is start off with a secured card for six months to a year, then transition to an unsecured card. This also helps in the credit building process. Once you have obtained a secured card, I would no longer use your debit card. Swipe your credit card for all purchases that you would use your debit card for (meaning you have the cash for it). Allow your statement date to hit because it shows usage, then pay the card off charges in full before the due date arrives. When this is done, you borrowed money from your credit card company interest free.
Q: What are a few ways a person can trim expenses from their monthly budget?
A: Cut out subscriptions such as Netflix, Hulu, other television or music streaming services, phone apps, and food delivery services. Go to food pantries. Shop at Goodwill. Let go of the luxuries and remember it’s only a sacrifice for a moment. Cook at home and stop eating out.
Q: For people who are living paycheck to paycheck, what are two helpful financial goals?
A: Get a skill or a trade that will allow you to become more marketable. Identify your gifts and monetize them. For example, you could clean houses in your neighborhood, cook dinners in the community, do hair on the side, or something similar.
Q: Since apartment rental prices are rising in many cities, what are a few factors involved in weighing the option to continue paying rent or buying a home?
A: There are programs out there that help people to purchase homes. Neighborhood Assistance Corporation of America (NACA) is one of them. Homebuyers do not have closing costs or down payments. It can be a very tedious process but worth it in the end. I also encourage people to take the home ownership route any day. If another pandemic comes and you have equity in your home, it could be another stream of income to help when finances are tight.
Q: Since fewer companies are offering retirement benefits, what is a starting point to establish savings goals during the pandemic, when money is often tight?
A: Start somewhere if money is tight. Put $5 away a week, or whatever amount is comfortable for you and your family. I use an app called Dosh. See https://link.dosh.cash/ASHLEYL386. It allows users to receive cash back from participating retailers. If you use the link above, you will get $10 to start your account. For every purchase you make from a Dosh approved retailer, you will receive a certain amount of money back. It can be transferred from your Dosh account to your bank account.
Q: If people find themselves struggling with credit card debt, are there any options to get a plan to improve credit scores, if there is little to no financial reserve?
A: Cut expenses and find ways to bring in more income. Use the debt snowball method (paying off the smallest debt first quickly) or the debt avalanche (targeting debt payment with highest interest rates first) method to help pay off debt. Credit can be improved if you know individuals that have large credit limits and long payment history to add you as an authorized user. This will help with score improvement because it decreases utilization. They say do not spend over 30% on your credit cards. My rule is not to spend over 10%.
Q: What are two sources that may help people to become better educated about investments and creating a budget?
A: I will be offering online financial classes in the fall to help with money skills. Additionally, I follow tons of individuals on social media that are people that I look up to in the financial world. Find a financial mentor.
Lowe-Simmons websites are www.convoswithaclinician.com and www.momimatters.com. Follow Lowe-Simmons on Instagram via https://www.instagram.com/dr.alosimms/.