This Is What Shanesha Taylor Should Be Doing With Her Money
A look at the purported monthly budget for Shanesha Taylor, the woman who was arrested for leaving her kids in a hot car while she was on a job interview, shows that she’s making some of the same financial mistakes that most Americans make with their money. She allocates a lot of her discretionary income to purchase items that will never appreciate in value and saves very little. A 2013 Bankrate survey shows that more than three-fourths of Americans don’t have enough money saved to pay their bills for six months.
I can understand why people are pissed about her lack of financial priorities. Her budget allocations reflect a sense of entitlement (on someone else’s dime), indicating that she hasn’t learned a thing from her recent legal battles and financial woes.
Since hindsight is definitely 20/20, it would have been beneficial if her supporters slapped one or two conditions to their $144,775 donation. She should have received some serious schooling on budgeting and establishing wealth as a priority through investing so that Taylor could support herself and her children in the near-term and long term.
Her current financial (mis)steps with the windfall of money epitomizes the saying, “give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime.” If I were her friend-in-finance, this is advice that I would have given her about her money mindset and her budget:
There are too many vague categories that can either be eliminated or combined with another. For example, Taylor has allocated $250 for “household expenses” yet there are specific categories for “electricity,” “water/garbage/sewer.” If she could not name these “household expenses”, I would add this $250 to the $50 that she has set aside for repaying her student loans. Putting $300 toward this debt will accelerate her journey toward financial freedom.
You care more about looking wealthy than being wealthy. Three hundred dollars a month for a wardrobe is extremely high for someone that is looking to stay out of the Arizona heat, out of jail, and regain some type of normalcy for her and her family. If the clothes that she and her children have are clean and fit well, then that should be good enough right now as she seeks to build some type of financial stability and sense of familial security for herself and her kids.
Your priorities are about living in the now instead of living for the future. Nowhere in this budget do I see that Taylor is thinking about setting at least 10% of her budget to invest in low-cost mutual funds and low-fee ETFs. Taylor is so blessed to have this bounty of money dropped into her lap and if she wants to ensure that the well does not run dry, she needs to invest her money in financial vehicles that grow her money, not whittle it away.
You are double-spending in the same category. Taylor is paying for cable and Netflix, which have the same function. I would recommend that she ditch the costly cable and go with Netflix. If she must keep the cable (which she doesn’t), she needs to speak to her service provider about bundling her cable and Internet. Currently, she is paying $275 for these services, which is completely absurd and unnecessary.
Make a $500 emergency savings cushion right away. Since Taylor already knows the pain of being desperate, without money and a family to feed, she needs to create systems and structures that will give her the beginnings of an emergency fund. Taylor can easily stash more than $500 away each month if she were to move half of her clothing budget ($150), 20 percent of her grocery bill ($100), half of her electric bill ($125), half of her entertainment money ($150). Then she needs to open up an online account like one with Ally Bank. As a rule of thumb, she needs to save at least 10 percent (and as much as 50 percent) of her income to ensure that she stay out of the news and of the streets.
Refinance your car payments. Taylor is spending 18 percent of her monthly income on her car. This is not okay. Living in Arizona is very different than living in a city like New York, so I am not going to say that she should get rid of her car. I am, however, going to opine that she should pay her bills on time and reduce her overall debt so that her credit score will improve. Improved credit will help her refinance her car loans for lower monthly payments in the near future.
Connect with Kara @frugalfeminista. Learn more about The Frugal Feminista at www.thefrugalfeminista.com Download her free ebook The 5-Day Financial Reset Plan: Eliminate Debt, Know Your Worth, and Heal Your Relationship with Money in Just 5 Days. Join Kara’s closed $20 Cash Crash Diet Facebook Group to get some sistergirl support and accountability for reaching your savings goals.