A majority of Americans are in debt. Rachael Hanible, a certified financial education instructor and Founder of Missing Peace Financial Group, shared her insights, practical tips and general counseling on how to properly form and execute practical financial goals. She joined a literacy segment on The Source with Andrea Lawful-Sanders.
A majority of Americans are in debt. According to a 2023 Pew Research study, One in four Black households in the U.S. either had no wealth or were in debt in 2021. Hanible was able to break away from the statistics – paying off $150,000 in debt.
The conversation begins with an emphasis on specificity in setting realistic financial goals. Hanible encourages individuals to quantify their objectives, such as paying down debt, saving for emergencies, increasing credit scores, or boosting retirement savings.
She highlights the importance of avoiding vague goals and instead suggests setting realistic yet challenging targets.
“How much can we increase our credit score? Or maybe increase our retirement savings? or contributions? Let’s be very specific. Don’t just say, ‘oh, I want to save more. I want to pay down debt.’ Give it a number. Then make sure you’re not cheating yourself when you create these goals.” She said.
Drawing from her own experience, Hanible emphasizes the significance of consistency. She shares her journey of gradually paying extra on her mortgage each year, eventually shortening a 30-year mortgage to just eight years. The key, she says, is pushing for goals that foster growth.
Each year, she would pay towards the mortgage with a set plan and goal.
“I always started by paying a little bit extra when you’re talking about interest, everything extra that you pay is helpful. So, every dollar extra saves you money and interest. So I said, okay, I’m just going to pay an extra $50 when I first buy my home. Above what they’re requiring me to pay, because I’m just getting my feet wet. I’m still young. I really don’t have a lot. And then I just gradually increased it every year on the anniversary of the date that I bought my home.” She said.
Hanible and Lawful-Sanders furthermore addressed the challenge of maintaining discipline in saving – especially for those living paycheck to paycheck. She suggests starting small; automating savings when possible and celebrating small victories along the way. Hanible emphasizes the concept that every drop fills the bucket, advocating for the accumulation of savings in small increments, even for those with limited resources.
To make the process more tangible, Hanible shares her own method of creating an emergency fund or “side of the road money.” She advises starting with a small goal, like $100, and gradually increasing it. For those struggling with discipline, she recommends finding something they are already committed to and redirecting that commitment towards financial goals.
“Start with a real emergency fund, it’s what I call side of the road money. If you’re on the side of the road, how much do you need? If you have a flat tire how much money does that [cost?] If you need to go to the emergency room, how much is the copay? How much are you going to need in a real emergency? Start with that number. For most of us, our deductibles are like $500 or something like that on our car insurance or those kinds of things.., So start with something small. Let’s get a hundred [dollars]. Let’s get and have five [hundred] to be your first goal for just an emergency fund..and then slowly just build on that. $10, $20 every time you get paid. Whatever it is that you can do, start to build on it. But start small and don’t overwhelm yourself.” Hanible said.
As the segment concludes, Hanible encourages listeners to embrace change in the new year and emphasizes the importance of setting and achieving financial goals. “A drop in the bucket,” Hannibal says, can accumulate to much more in the process.
Listeners eager to know more and jumpstart their financial goals can connect with Hanible through her website for further guidance and offer consulting sessions. You can find Hanible on Facebook and Instagram at @Peptalks_.