TIPS FOR A SECURE FINANCIAL FUTURE
Brown has a background in finance that was developed in real estate and used to help the government create projects that could help transform communities. Brown’s three steps include Establishing an Emergency Fund, Budgeting and Expense Tracking and Investing in Retirement Accounts.
Brown believes in order to establish an emergency fund, the first step is to create a budget and understand where money is being spent.
“Oftentimes in households, people live from paycheck to paycheck and at the end of one pay period to the next, they don’t really know and understand where the money is going,” he said.
For example, Brown said recurring charges that are for a service that goes unused can be cancelled. He added that, sitting down, creating a budget and understanding the needed expenses are important. From there, based on individual financial situations, people should start to contribute to an emergency fund. He suggested people make regular contributions into an account, a savings account, that is on automatic transfer. His rule of thumb is 20% of their paycheck. Starting, however, is the key.
Brown said once a person establishes an emergency fund, they need to be disciplined and committed to not give in to impulses and to not spend that money in the emergency fund for something other than what it is earmarked for. He said that can derail the saving strategy. He suggests people be committed to living within their means and not take on added expenses.
When it comes to investing in a retirement account, Brown said knowing what kind of account is key. An IRA is more for individuals who are self-employed. If someone is an employee of a company, they might have a 401(k). At Brown’s company, all the employees have a 401(k) that is matched by the company.
“We’re really firm and committed to making sure our employees are on a sound financial footing. One of the ways we do that is by really pushing the 401(k) and really pushing them to invest in their 401(k),” Brown said.
The result is that there are employees in his company who have amassed significant amounts in their 401(k).
Brown said that it is important for the financial health of people’s families, the financial health of people’s business that they save money and invest. Things might come up and in order for a person to put themselves in a solid financial position, it is important to save.
Brown’s shows #HBCYou with Dee Brown and Self Made with Dee Brown can be seen on PBS. For more information about Dee Brown, Tiger Run: The Untold Story and No House to Morehouse: The Untold Story, visit www.deebrownceo.com.
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