In this inaugural episode of "Savvy Anto's Money Moves," host Antonette El Baz, an experienced entrepreneur, accounting firm owner, wife, and homeschooling mom of four, invites listeners on a journey through the world of smart money management. Sharing her personal narrative of overcoming financial obstacles, Antonette dives into five pivotal lessons she learned from early financial challenges. This episode is a blend of inspiring stories and practical advice, aiming to guide listeners – from parents managing family budgets to entrepreneurs navigating business finance – towards achieving financial freedom. Antonette emphasizes the importance of understanding personal finance as a life skill, often overlooked in traditional education, and shares how she learned to navigate this crucial aspect of life through trial and error. Listen in for a candid conversation on the dangers of spending money you don't have, the significance of maintaining good credit, the pitfalls of lending money to friends and family, the value of addressing minor financial issues before they escalate, and the crucial role of emergency savings. This episode is not just about financial literacy but also about empowering you to make smarter money moves and build a prosperous, well-balanced life.
In this inaugural episode of "Savvy Anto's Money Moves," host Antonette El Baz, an experienced entrepreneur, accounting firm owner, wife, and homeschooling mom of four, invites listeners on a journey through the world of smart money management. Sharing her personal narrative of overcoming financial obstacles, Antonette dives into five pivotal lessons she learned from early financial challenges. This episode is a blend of inspiring stories and practical advice, aiming to guide listeners – from parents managing family budgets to entrepreneurs navigating business finance – towards achieving financial freedom. Antonette emphasizes the importance of understanding personal finance as a life skill, often overlooked in traditional education, and shares how she learned to navigate this crucial aspect of life through trial and error. Listen in for a candid conversation on the dangers of spending money you don't have, the significance of maintaining good credit, the pitfalls of lending money to friends and family, the value of addressing minor financial issues before they escalate, and the crucial role of emergency savings. This episode is not just about financial literacy but also about empowering you to make smarter money moves and build a prosperous, well-balanced life.
Hello and welcome to Savvy Anto's Money Moves. This is our very first episode, five key financial lessons that I learned from my earlier financial struggles. This is a podcast where finance becomes your friend and it's hosted by me, Antoinette Elbaz.. I am an entrepreneur, accounting firm owner, I'm a wife, a homeschooling mom of four, and I'm really just here to invite you on my journey through the world of wise money management. So whether you're a parent navigating family budgeting or an entrepreneur facing the complexities of business finance or someone just looking to escape the pitfalls of financial missteps, just listen out for the insights on how you can manage your wealth. And get practical tips from me for everyday financial planning. You'll get some inspiring stories. I'll illustrate how anyone can achieve financial freedom. And this podcast is not just about reaching a destination, but it's about embracing financial literacy as a journey. Please join me every week as I help you navigate the seas of personal and business finance, empowering you to make smarter money moves. So let's demystify the world of finance together and build a solid foundation for a prosperous and well balanced life. We all face financial challenges and my path was no different. Despite my background in accounting and finance, I encountered personal finance hurdles that taught me invaluable lessons. It's essential to understand that personal finance is a crucial life skill often missing from school curriculums. Most of us learn our most significant financial lessons through life itself and I'm here to share mine with you. Today I want to answer a question that someone had asked me and I've actually gotten this question a few times. But this one keeps coming back up. So I was like, you know what, this one keeps coming up. So I'm going to go ahead and answer the question. So here's what I was asked. What were the key lessons you learned from your early financial challenges? So I sat down and I thought about it for a while and I came up with five financial lessons that I'm pretty sure I learned the hard way and I want to share them with you and hopefully I can help you out on your journey and hopefully you won't make some of the same mistakes. One thing I do want to point out and I'm very transparent about my background, being in a field of accounting and finance and just my own personal challenges that I face in my own personal finances. Even outside of having that knowledge, I just feel like personal finance is a life skill. That's really not taught in schools. So again, I learned a lot from trial and error. I feel in school, your math teacher teaches you fractions and then you learn Pythagorean theorem. And then your parents, they teach you life skills like changing your oil or how to skate, but who really teaches you about money? you can get some friendly tips here and there, but I'm pretty sure the chances are good that most of your important financial lessons came directly from life itself. I know that was the case for me. So here's some of the money lessons I learned the hard way, and hopefully it will be helpful for you. Lesson number one. The danger of spending money you don't have, I think one of the first things that hit me was just learning that it's dangerous to spend money that you don't have. That one was a tough one to learn. It really took time when you spend money you don't have. Let me tell you why this is dangerous and how it's so tempting and we've all faced it from one time or another. We find ourselves looking at maybe the latest iPhone. Or maybe I really deserve this fancy dinner out with my friends or my partners. Or we say we deserve to treat ourselves with the new gadget. Or somehow that's just going to make life easier. So what we're doing is justifying our spending. We're trying to convince ourselves that we need to do this for ourselves. And we'll just figure out how to pay for it later. And the truth is this habit leads to serious consequences if it's not handled quickly. One of the dangers of it, D E B T debt. You just start spiraling out of control with debt. When you're spending money, you don't have, you're borrowing money. And then not only do you have to pay back what you borrowed, but you have to pay interest on top of that. Then taking out that money, borrowing the money creates these different holes that you have to feel in every time you get paid, you have to pay this. But you also have this hole over here from where you borrowed earlier plus interest that you have to pay back And if you don't get a hand on this quickly Your debts they're definitely going to accumulate and then it'll just get really hard to pay it off And then those interest charges Even making you know the minimum payment you're still paying Probably even more than a thousand dollars in interest a year then when you add your other personal debts and things like that, which is just the cost of borrowing This money could have gone to an investment account to learning a new skill Or it could have been invested in yourself. Maybe even a nice vacation We all need to de stress and this feeling just leaves you overwhelmed when you get paid And a significant portion of your income is going to your creditors Especially for things that you're not using anymore, or you don't even find valuable. It's lost its appeal. You've used it and used it and now you're not interested, but you're still having to pay for it every month. This also makes it difficult to meet your other obligations and bills that you most likely have. And this for sure will cause you lots of feelings of stress and overwhelm, anxiety, and even depression. It will affect your mental health and well being. And if you're a couple, it can devastate the marriage. That's for sure. Now, there are times you can spend if you need to. Obviously, emergencies do come up and there are times that you'll have to go over your budget. or may have to spend more than what you have. And that's the good thing about budgeting and being flexible and not super rigid, leaving some room for that flexibility. So that if you do have to go over, you just sit down and decide, is this really an emergency? Consider, are you really going to benefit from this? Do you really need it? Is this really going to fulfill a need that you truly had? Is it really and truly a need? Is it truly, truly an emergency? And we can get into the details of setting those requirements on another day. But maybe sitting down and deciding what would qualify as an emergency. And you set that up if you're single if you have a spouse or a partner You guys could do it together. You could be like, this is the criteria for an emergency. And if it's emergency, once it's set up, you can identify, okay, we've identified that this is indeed a true emergency. How are we going to pay it? Are we going to use a credit card? Are we going to take out a loan and figure out what's going to be the impact of that decision and then make your plan for paying it back? So how are we going to pay it back? Don't just borrow it and think it's just going to resolve itself. Make sure that you can pay it back. Look for your best options. If you can find something with zero percent, that's even better. just spending the money you don't have, it is super dangerous and that was definitely a life lesson for me. Lesson number two, the double edged sword of credit. Credit is hard to keep perfect, but it's so easy to destroy. That was definitely a life lesson for me. It's so easy when you really don't need it. I say when you're young, hello myself, and you've just graduated high school. And you take it for granted because you don't really feel like you need it or even understand it. That's where I made a lot of my mistakes, actually, in college. And so many young adults make lasting damages to their credit history. They don't understand the actual cost of having subpar credit in the future. And how much it's going to cost them. They don't appreciate how much work it can be to build a good credit score. One of the things that young adults did, myself included, is run up a large balance on credit cards. Just having that high credit utilization ratio, it can be just as damaging as missing a payment, which is really damaging. The only good thing about the utilization ratio is if you do pay it down, usually by next month, it's a pretty easy fix, but most young adults, especially just carry a huge balance. You really want to aim to keep that ratio below 30, 20 percent even better if you can. Because the higher it is, the worse your credit score is going to be. Then there's issues like opening and closing several cards or even worse, co signing for friends and family. Young adults really don't realize the impact and the responsibility that it is when you cosign on a loan for someone. You're responsible for that and that's going to be on your credit report too. So if they're not paying or they're paying late or they're carrying a high balance, that's going to affect you. So just not being focused on your credit and understanding it. That's why it's really sad. A lot of us don't get this training in schools or didn't. We just had to figure it out through life. How, when you make those mistakes early with your credit, just how that bad credit will cost you in the long run. Think about mortgages. You're gonna need, for a traditional mortgage, a 620 and higher. But the better the score, the less your interest is gonna be. And that means the less your payments. It's also costing you more for your auto loans. You're going to pay more. Your interest rate is definitely going to be higher. Your auto insurance is going to be higher. To rent an apartment with bad credit, the landlord can deny you outright. When they run your credit, they can say it's not acceptable. And they're just going to find other applicants with better credit scores. So the higher the credit score, the higher the odds of being chosen. Even if you do get approved and you have subpar credit, you're going to have to pay a larger deposit. If you see apartments or landlords advertising a low security deposit to move in, trust me, that's for good credit applicants. Meaning you only qualify for that if your credit is good enough. If you have bad credit, it's going to be double or triple another month's rent. You could pay two months rent. I've seen three and four months rent depending on how bad it is. Definitely something you need to think about. Utility companies, they're going to also require people that have bad credit to pay a deposit when they first set up their service. That deposit is going to depend on the laws in the state that you live in, of course, but you can pay an estimate of probably one month's worth of services or more. Also, your credit cards, they're going to be costly for you too. If you have a score below 580, you'll probably only qualify for a secure card. And that's pretty much where you put up your money and they lend you money on a credit card back to you based off how much you've put in the savings account. So say you put 500 in a savings account. They'll give you credit worth 500 because it's secured by your savings account. So if you default, meaning you don't pay it back, they're just going to take your savings to cover it and then close the card. And of course, those secured cards don't come with any perks. You're not getting points. You're not getting any type of special features or anything like that. This is going to cost you because other credit cards, some of the best ones, offer sign up bonuses worth hundreds of dollars a year. So if you have good credit, you can earn rewards worth even more. You can't take advantage of those offers unless you have good or excellent credit. So you can just see just how much that costs you in a long run. That's definitely something I wish I knew ahead of time and I had learned the hard way. Lesson number three, avoid lending money to friends and family. Okay, I know this is a touchy topic, but don't lend money to friends and family. Of course, I know you want to help them out in any way you can, and I'm not saying that you can't. Just give them the money. If you're going to give something, see it as a gift, like something that you don't need to be paid back. here you go, it's not a loan, because the truth is, it rarely works out. Every case I've seen, it ends up causing more damage than good. The problem with offering loans to friends and family members is that it truly creates more problems than it really solves. One of the reasons is because the agreements are usually open ended. That means neither party has sat down and said, okay, this is the date when the payments are due. This is how much they should be. You're going to pay interest to me. It's not organized like that. Because you didn't lay down your expectations, you guys are both making your own assumptions about this loan and how it's going to be handled. A lot of times it's not even a priority for them to pay you back because it's not coming from a financial institution like a bank. They know there's no immediate consequences for not paying on time, like late fees. There's not going to be any of those high interest charges, and definitely not being reported on their credit report, so they don't feel obligated to pay it right away. And you don't want to rely on them doing that because it's just going to strain your relationship. Then emotions take over and everybody's judgments are clouded because of the excuses. I've seen so many relationships damaged that way. There's so many ways that the loan can go wrong. And it creates this tension between you and that loved one. You're going to feel angry, emotional about not getting the money. Just think about the reason they had trouble in the beginning. They didn't have the money, and so they were just filling one hole, and now you've been added as another hole that needs to be filled. So how are they going to pay you back when they're still struggling to pay back their immediate obligations? These things can get really awkward for any Mutual friends or mutual family members that you have and these types of disagreements lead to drama Mutual relationships may pick sides, especially if you're attending some of the same events together It's just gonna be really hard and the thing is they may even ask for more. I'Ve never dealt with this personally, but I saw it happen all around me. So it's worth putting on my list because I don't have to go through it to learn from it. If I can see other people making mistakes, I can learn from those. I don't have to go and make the same mistakes. And what I've noticed from friends and relatives that lend money to each other, It doesn't help them because they're already in a bind and usually their issue is not just having the money. It's actually learning how to manage their money problems. They haven't figured out their own current obligations. What makes you think they've learned all of a sudden with you when you have less recourse to even get the money back? So think when a loved one or someone asks you to pay off the debt or lend them money. I think it's important to just determine what's the real issue. Maybe you can help them map out a budget to help them pay their own bills. Just get away from the handing over the cash. Like, here you go. Teach them how to become more financially independent. Because in the long run, this would be so much better than just giving them the money. That's a band aid solution. And that's just going to keep leading to poor spending habits. There's this saying, and you're probably familiar with it or heard it before, but if you give a man a fish, he'll eat for one day. If you teach him how to fish, he will eat forever. You often have to think about yourself too. This isn't an investment because these personal loans between friends and family, they don't incur interest. You'll be better off if you have the extra cash somewhere to put that in a high yield savings account. At least you'll earn some interest off of that and you'll for sure get your money back. Just go withdraw it and who knows you lend out that money. Maybe you'll need it because maybe you know, God forbid you'll suffer a job loss. Maybe it's not that big. Maybe it's a major car repair that could always happen. And you've loaned out your fund to a family member because of emotions and love and things like that. But now, who are you going to fall back on when times get tough in your household? Especially if you're already on a tight budget and have limited savings. That can make you even more vulnerable if things arise. I just look at it like this. If they can't get lending from a bank, then that means the bank has definitely deemed them as high risk to lend money to. And you can take that as it's already high risk, they've already been vetted. So please use logic, not your emotions. Emotions are what ties you to that person and makes you feel obligated, or even guilty to support them. And that really clouds your decisions. Let's say for example, you have a sibling and they ask you for a loan. Would you give it to them because you know, they're gonna pay you back or because you feel like you have to? So think about that. Make sure logic is playing a role in it and not just emotion and that we're not just providing cash to people just because we care about them because love will turn sour really quickly and it comes with emotional manipulation And not only that, what if they don't repay? Now your funds are depleted, there's a risk that you'll need it. Just steer clear of that. You don't want the awkward interactions. You don't want that animosity. Just keep your friends and family separate from your finances. That is number three. Do not lend out money. Lesson number four, the value of timely interventions. Pretty much I'm saying don't ignore the small issues. If your car is making a whistling sound or there's a minor crack in your home's foundation, It may seem harmless at first, okay, but these problems, trust me, escalate really quickly, leading to more significant and costly repairs. So not addressing the minor issues properly to avoid larger, more expensive problems later would be the best definition for the value of timely interventions. My husband and I had an issue recently. It wasn't me, it was my husband. He had been hearing the brakes make noises and he was ignoring it, and ignoring it, and ignoring it. Now if the first time he heard it, or maybe the second, third, fourth time he heard it, if he did something about it, it wouldn't have been that much of a fix. It would have been some pads to replace. But because of ignoring it for so long, the pads had to replace. But because of ignoring it for so long, the pads had to be replaced, the rotors had to be replaced, the actual brakes had to be replaced. Now, I'm not an auto person by any means, so don't kill me if I got any of those part names wrong or mix them up. But pretty much it became a bigger problem because he ignored the small problem and it got bigger. It went from something that would have maybe been under 100 to over 1, 000 to fix because of not being proactive. Those timely interventions are when I call, right when you start noticing it and it's small, just getting on top of it right away. Doing that has really served us that lesson and continuing to doing that in our finances. We've learned that prevention is the key. If you see something, go ahead and do something about it. Do not wait for it to get worse. Lesson number five, the importance of emergency savings. The true worth of emergency savings accounts often becomes evident during financial crises. Emergency savings accounts is important. If you haven't heard that term, it's just pretty much setting aside money for unexpected expenses like medical bills. Think about things you can't control. For example, if you get sick or job loss, car repairs, challenges like that, these issues will definitely put a strain on your finances and we don't want that type of stress. Emergency funds are great because they can help you avoid debt. When we have those unexpected expenses, which we all have at some point, most people turn to credit cards or loans. This creates a whole cycle of debt again with high interest rates. Therefore, if you have an emergency fund, you don't have to take on that additional debt. I know it can sound daunting, especially if you're just starting out and don't have anything saved, but take the first step in determining how much you want to have saved. I know most experts, they say three to six months of expenses. So you should have something that's going to cover all your essentials. Like mortgage or rent, utilities, food, gas, any car notes, all those essentials, three to six months. So just tally them all up for the month and multiply it by three or six. If you're just starting out, start small. You don't have to eat the whole elephant. Eat one bite at a time. Just do three months and then work up to six. If you think you can do the six. Then go ahead, go after it. After you set that goal, you're gonna put a deadline. You're gonna look for areas in your budget that you can cut back expenses. The entertainment budget may switch to a cheaper plan for your subscriptions or even cancel them altogether if you're not using them anymore. I always say, though, there's only so many expenses you can cut out without affecting your quality of life. Because I knew for me when I first stayed at home with my kids, I had cut everything at one point. I was like, we can't live like this. We have to find balance. We still need to have a decent quality of life. So that's when we decided Okay, it's time for the next phase, which is what I'm going to tell you next. It's time to increase our income. So if you've reached a point where you've cut back on expenses to the extent that it aligns with your quality of life that you're comfortable with, Then it's important to maintain that balance. You don't want to compromise your living standards by cutting too much. So that was the next point, to try and increase your income. I mean, there's all kinds of ways of doing it. Try to get an extra bonus. Go for commissions. Get a part time job. Freelance. Sell items you no longer need. There's all kinds of ways to increase your income. That would be another podcast, but that's a brief overview. This next tip is my favorite automation. Yes. Set up automatic transfers that come from your account. You will forget about it. It's like your taxes. You don't even feel it anymore. If you automate your savings soon, you'll just get used to not having it. You'll adjust to that net pay that comes out just like you do on your paycheck, and I'm a huge fan of this. We have so many types of automated accounts, and you actually just forget about it. And then when you remember and you go check it, you're like, oh my gosh, look at how much it's grown. It's a really great feeling and that's the best way. Then there are those times when we get those windfalls, right? We get a big tax refund, maybe a bonus. Who knows? Maybe you inherited something or you get a settlement from a car accident. If your emergency fund has not been funded, maybe use some of these windfalls to get to your goal faster. Just be patient because building does take time and it's going to take discipline and this doesn't usually happen overnight. Just some considerations that I want to point out to be mindful of. Consider your family size. Knowing if, it should be bigger or smaller, depending on how many people you have to cover. If you're a single person, you probably could get by with a little less. But we're a family of six. I always joke with friends when they say, Just go get them something from Chick fil A, it's like an easy 10 meal. I'm like, yeah, for us, it's automatically 60 because there's six of us. So also think about your health. If you have chronic health conditions or your higher risk, you might need to save more for your medical expenses than the average person. So think about that. Everybody's case is different. Also, think about job security. If you have a pretty stable job, you may not need to save as much as someone who, let's say, is self employed or working on a contract basis. They could have times where they may not have work or it's seasonal. Revenue comes in certain months and not as much in other months. So that's something to think about as well. If you own a home, you're going to have to save more because there's usually going to be unexpected repairs and maintenance calls. We have to paint our house. We have to pressure wash our house and driveway. We've had different repairs like leaks and the costs that just come with maintaining your own home. So if you set it aside, Then you don't have to go into debt when those things come up. All right, well, I hope that was helpful and thank you for listening. I hope this answers the question and there's so many more that we can dive into. So, definitely we'll be consistently making podcasts on a weekly basis, answering those questions. For this one the five key financial lessons that I learned pretty much the hard way. I put these higher on the priority list. But I want to encourage you guys to continue to listen and learn from these. I think they're pretty common missteps and just try to proactively manage your finances. If you have any suggestions for future topics, definitely go to savvyanto. com which is s a v v y a n t o. com and fill out a contact form. If you have any suggestions about Any future topics or any questions you like answered and I'll take a look at them. Thanks for listening until later. Bye