Learning that money is power: Kara Stevens went from nonchalant spending to a healthy relationship with cash.

Author:Townes, Glenn
Position:Wealth For Life - Brief article

FEW PEOPLE ARE AS COMMITTED TO saving money as 34-year-old Kara Stevens. Last year, the New York City-based education administrator launched the Frugal Feminista (www.thefrugalfeminista.com), a website dedicated to the financial empowerment of women. Stevens is so passionate about helping her readers that she shares some of her own past money missteps.

It all began in 2001 when Stevens graduated from Oberlin College in Ohio. Saddled with about $15,000 in credit card and student loan debt, Stevens was nonetheless careless about spending and nonchalant about how making late payments would hurt her credit score. She shopped regularly and purchased whatever she wanted.

"Sometimes I would miss making a credit card or student loan payment altogether," recalls Stevens. For her, the words "budget" and "save" didn't exist.

The cycle of poor money management and late payments changed for Stevens in 2004 when she read the book Girl, Get Your Money Straight! A Sister's Guide to Healing Your Bank Account and Funding Your Dreams in 7 Simple Steps by Glinda Bridgforth (Crown Business; $12.95). "The book discussed money management from an African American woman's point of view, taking a holistic, straight-from-the-hip approach," Stevens says. "Reading that book lit a fire under me to eliminate my debt. I began to view money for what it is--a powerful tool to fund your dreams."

Once she began to realize that money held power, Stevens became determined to hold on to as much of it as she could. Every month she saves at least $1,300 from her six-figure salary and invests $1,000. In eight years, she has socked away more than $55,000 in savings. She also has about $150,000 tucked away in a tax-deferred annuity retirement account.

Stevens says people may be unaware of how much money actually goes through their fingers. A firm commitment to save 10% of your annual income can be established once someone determines how much money is being spent on "needs" and how much on "wants." Stevens says it's important to identify and eliminate daily money wasters. "Stop buying bottled water--use a cup or thermos from home," she suggests. "It's marketing--there is no real difference in the base product." If saving 10% is not possible, Stevens recommends a practical approach: "Pay yourself first and work toward a specific goal and set amount to save," she says. "Automate your savings--pay yourself as if you were paying a bill."

For the serious but novice saver, Stevens suggests...

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