By Laine Rolong
When it comes to spending, low-income families often have to make hard decisions. While they may want to buy their child a new pair of shoes for school, they need to buy food and pay the rent. Taking care of basic family necessities--food, housing, clothing, healthcare--is the priority, but the truth is many struggling New Yorkers aren't always able to do it. This is the reality for many of the families that Food Bank For New York City serves, which is why we work so diligently to help our neighbors in need boost their financial situation by helping them access SNAP, offering free tax assistance and providing financial counseling. In fact, a big part of my work here at Food Bank is coaching clients on how to build financial literacy, manage their money, and achieve greater financial stability.
As we near the end of financial planning week, here are six tips that I always share with clients to promote good fiscal habits and reduce financial insecurity:
- Define your financial goal. What do you want? To save money, pay off debt, build credit? It is important to define your goal first, whatever it may be; then you can define the steps to achieve it.
- Assess your financial situation by creating a budget. To know where you want to be, you need to know where you stand. Creating a budget allows a clear view of your financial status. People often know how much money is coming in, but not how it's being spent. Creating a budget for the month helps you monitor your spending down to the last penny and creates an opportunity to review where you are overspending.
- Apply for SNAP benefits. The average SNAP (food stamps) benefit for a household of one is more than $100 month, and for a household of three it's more than $400 a month. That is approximately $1,200 to $4,800 that won't need to come directly out of your pocket--in essence, a savings to you. Food is the second highest expense in a typical household budget after rent, so it makes sense to enroll in SNAP, if eligible, and allocate the savings elsewhere, for instance debt payment.
- Choose banking instead of check cashing. The cost to cash a $1,000 check at a check-cashing service may be a $5 processing fee plus another 1 percent fee. This means that each year you will give away $180 of your hard-earned money. Banking is a better and safer option. The key is to find the right institution that works for you.
- Check your credit report. It's free, it's your right and it's a good start to build or improve your credit score. The higher your credit score, the better rate you can get if you ever need a bank loan. Remember, prospective employers and landlords do credit checks as well. Click here to get a free credit report.
- Plan your taxes now while creating saving goals. Food Bank prepares taxes for free; the average cost of tax preparation in New York City is $250. Food Bank's tax professionals ensure that you get every Earned Income Tax Credit (EITC) to which you are entitled. Plan ahead for how you will use your tax return. But keep your financial goal in mind as you plan so that you make wiser decisions and increase your ability to meet your goal.
Laine Rolong is Food Bank For New York City's Financial Empowerment Manager.