Marsha Barnes is the #GirlBooss and curator of The Finance Bar, a mobile financial management company that shares helpful tips on how to manage money via her stylish mobile vehicle, her informative website, and app. Barnes began her journey in 2010, launching an online nonprofit financial empowerment program, where she would meet with people about their personal finances, budgeting, and debt management.
She launched the finance bar in 2014 which Barnes says is very successful and considers it a gift and a curse because she is so busy. “I think people like to request the bus more than they request me,” she laughed. “I think it’s different. My belief is that when dealing with finance, it’s a taboo topic because it’s already something personal. People don’t like to talk about money because they are already lacking in that area. The mobile component was created to make people more comfortable. I’m able to welcome anyone into that space. So, I would like to say that’s what makes it successful.”
Although Barnes has degrees in business as well as a background in finance, her passion comes from helping and informing others about economics. “I know that there are a lot of challenges out there now, and what I just love is watching people, and seeing the lightbulb come on—that’s really where my love from finance comes from, “she said.
We asked Barnes a few general questions about budgeting:
How do you make a budget?
You identify what your monthly net income is (what is your take home income?), and then you take that number and write down everything else that you pay out during the month, and I mean everything. Whether that’s mortgage or rent, utilities, groceries, if you’re eating out, any recreational things; or it’s something that you’re doing for personal reasons like hair and nails—Do you got to the spa? Do you go out to eat with the girls? Do you get a message?
It’s simply a matter of writing everything down that you pay to get done, and then you take that number, whatever all of your monthly expenses are and you subtract that from your monthly net income, and there’s your budget. Creating a budget is just doing the math of what is your net income, and doing the expenses, as well identifying—making sure that you have a portion of that set for each of those items and sticking to that each month. You also need a column in your budget to save money, because that’s the goal.
How much do you save, give and spend, from each paycheck?
Well, for saving, I tell people that if you’ve never saved before, you want to at least start with 10 percent of your take-home income. Now, when it comes to giving, that’s personal. That’s something personal that you want to figure out how much you want to give each month, and then spending is the same because you could spend a lot of different things. It could be that you’re spending on your hair, nails, and going out to eat… The finance bar has an app, and what you have to do is go in and key-in your monthly net income, they will give you an amount on how much you should spend in certain areas.
It will give you an amount for savings, and when it comes to giving, that amount is not included because that varies for some people. Some people love to give and they love to give to charities. When it comes to spending, it depends on what you’re spending on. What I love about the budget expense manager app that the finance bar has is that it gives you a percentage and an amount for certain things.
What’s the best path to retirement?
The best path to retirement is if you’re someone that has 401K at the job. I like to tell people to try their best and match what the company will match. So, if it’s dollar for dollar, you always want to match that with 401K. Now, I understand for most people, that’s not the situation they are in. They are not able to allow that amount of money to be taken out of their paycheck. But you definitely want to start at least between 5 to 6 percent of investing into your company’s 401K retirement fund, and that’s just getting your feet wet. If that’s not the max at your job, you want to at least start there.
People sometimes don’t realize that even though they may not take money from their paycheck per say and put it into their account, the 401K is essentially savings. It is a savings account. You’re just saving for something different which is retirement. There are different options for entrepreneurs that are similar to a 401K retirement fund. It’s not just for people who work a 9 to 5, there are also options for people that are entrepreneurs. Sometimes you can go to a bank, and they will tell you the options.
Credit cards: Do you pay them off and cancel the account?
I recommend that you pay off your credit cards because you may be trying to get out of debt, but I don’t recommend that you cancel your credit cards. You should pay your credit cards off and keep your balances at least below 15 percent of your available credit rate. I don’t suggest that you cancel your card. Pay it off or pay it down below the 15 percent credit limit, because what the credit bureau is looking for is to see that you are able to balance credit well. It’s a red flag to the credit bureau when you’re maxing out the credit card and constantly going over the credit limit. They assume that you are using your credit to live. Credit cards aren’t the enemy, it’s only if you don’t use them correctly that they become a problem.
What are your thoughts on loaning money to family members?
I wouldn’t say don’t do it. What my thought process is—it doesn’t lend it. If you came to me and told me that you don’t have any money saved. I’d say, “We need to get you there. We need to figure out how this can work so you can get money saved.” Then you would say, “I don’t have money saved because I had to give a family member five-hundred-dollars.” Well, my thought process is that you’re putting someone else’s oxygen mask on before you have one on, and a lot of times we do that because we want to be the good person doing the right thing, but what happens when something happens to you. Who’s going to come and save you?
So, I say don’t lend, give. If you can’t give it, don’t lend it because you don’t really know when you’re going to get it back. Don’t give it with the expectation that you’re going to give it back because you may never get it back and you don’t want to ruin those relationships because of money. Just give it if you can afford to give it.
Do you suggest whole life or term insurance?
This goes back to long-term goals when dealing with whole life and term insurance. It’s not that one is better than the other, it’s just a matter of your long-term goals. When you sit down and research on an individual basis of what that looks like for you, you’ll be able to determine which one is the best.
Just Announced: Hangout with Us and Chat with Marsha
Save the date and mark your calendars. Hangout with us on Tuesday, April 26 at 7:30 p.m. We’re going to chat LIVE with Marsha of The Finance Bar to talk more about building your financial empire including a live Q & A. Submit your questions to us @CarolinaSTYLEM via Twitter using hashtag #CSTYLELIVE. Then Hangout with us LIVE on Google+ or YouTube.