10 Steps Essential to Living the American Dream
Follow these 10 steps and you'll be on your way to living the American Dream.
Recently I was asked to speak to a group of newly-arrived immigrants from different countries in Africa. Here is the information that I shared with them. Regardless of when your family arrived in the United States this list clearly outlines the financial steps to achieving your version of the American Dream.
1. First Things First
Prioritize your spending to cover food, medicine, housing, utilities, transportation, required insurances and tax payments.
2. Track Your Spending
Use a tool that you are most comfortable with - from pencil-and-paper to online apps - to make sure that your monthly spending is less than your monthly income. Track your income and expenses every month!
3. Bank Locally
Look around your community and find a bank or credit union that offers low-cost products and services, convenient hours, great customer service and that is covered by FDIC or NCUA insurance.
Federal Deposit Insurance Corporation (FDIC)
4. Have Emergency Savings
A bank is a great place to keep emergency savings. Open a savings account and deposit a set amount each week or month until you have 3-6 months of living expenses (see "First Things First" above) saved.
5. Prioritize Paying Off Debt
Create a debt repayment plan using Power Pay or other similar tool and stick to it.
6. Borrow Smart
Use credit only when you need it and only when you are sure that you can make consistent payments on-time and in full. A secured credit card is a great way to start.
Consumer Financial Protection Bureau (CFPB) Credit Cards
7. Protect Yourself
Protect your ability to work through health and disability insurance, protect your possessions with auto and renters/home owners insurance, and protect your identity with secure user names and passwords.
8. Prepare for Retirement Today
Using an employer-sponsored 401(k)/403(b)/457 plan or an individually-owned IRA save 10% or more of your gross annual income.
9. Save Your Lifestyle Goals for Last
Save for a home, a car or children’s college education only after you have addressed Steps 1-8.
10. Be True to Your Values and Goals
America is a land where “keeping up with the Jones” can eat up your savings and land you in debt. Be true to yourself and stay on track to achieve your own version of the American Dream.