Levels of Staying in the Black
Getting to and staying in the black is a process and journey. There are 8 Keys Financial Empowerment across each level.
Ms. Black
Levels of Staying in the Black
Elementary
If you find yourself in the red financially, it can be difficult to cover your basic needs reliably. This may be due to having no budget, no savings, low credit or no credit, high consumer debt, or living paycheck to paycheck. Without any investments, estate planning documents, or life insurance (or only employer-provided insurance), you may feel like you’re just getting by. However, there are some steps you can take to improve your financial security.
For example, creating a budget will help you track where your money is going and make adjustments as needed. You can also work on building up your credit score by making timely payments and keeping balances low. And finally, developing a savings plan will give you a cushion to fall back on in case of unexpected expenses. You can work towards a more secure financial future by taking these steps.
Middle School
As you enter the middle stage of your financial life, you begin to lay the foundation for your future security. You are better able to cover your basic needs and start to seek out information on personal finance and money management skills. You may also start to Clean up your credit and work towards getting out of debt. Contributing to retirement savings becomes increasingly important, and you may begin to look for ways to increase your income, such as overtime or renting space in your home.
Additionally, you may start to evaluate your insurance coverage and ensure that you have the appropriate amount of life insurance. This is also a good time to create an emergency fund so that you have some savings to cover unexpected expenses. By taking these steps, you will be well on your way to financial security.
High School
As you enter the middle stage of your financial life, you begin to lay the foundation for your future security. You are better able to cover your basic needs and start to seek out information on personal finance and money management skills. You may also start to Clean up your credit and work towards getting out of debt. Contributing to retirement
You are on solid footing at this stage in your financial journey. You are employed and have a good income. You have debts you are paying down strategically and investing for retirement. You are also beginning to think about how you can invest your money for additional income.
Consider renting space in your home or investing in a business. Whatever you decide, the important thing is that you continue to monitor your finances closely and make intelligent choices with your money. By doing so, you will set yourself up for continued financial success.
College
At this stage, you are financially flexible and have automated money management skills. You can also maximize your retirement options and expand your financial portfolio.
You are utilizing and refining your preferred budget method (Zero Based, 50/30/20, etc.) to help you stay on track with your finances. You also have very good credit (740 to 799) that allows you to qualify for better job options, insurance, and interest rates. You are in the black except for strategically held debt (student loans and mortgage).
You are focused on maximizing contributions to more than one retirement account (401(k), 403(b), or 457) or additional investments (i.e., real estate, taxable investment account) to preserve and grow assets and investments.
Also, you are consulting with an attorney to create a comprehensive Estate plan or to review and update your current one.
Graduate School
Reaching the graduate school level means you have accomplished much–financially and otherwise. You have excellent money management skills, are debt free, work optional, and are living your best life.
Reviewing your budget regularly and living within your budget to follow the 4% Rule is key to maintaining this lifestyle.
Additionally, you have very good or excellent credit that allows you to qualify for very good or excellent insurance and interest rates (A perfect credit score is 780 or higher).
Furthermore, you have strategic debt (if any) and can manage it within the 4% Rule. This also includes managing retirement accounts (401(k), 403(b), or 457) and additional investments (i.e., real estate, taxable investment account), preserving and growing assets and investments.
Lastly, you have multiple passive income streams established and consult with an attorney regularly to review and update your estate plan–as necessary. All these factors contribute to your financial success and allow you to live a comfortable lifestyle.
