Like millions of its residents, the State of California is going through lean times. But that’s no excuse for us not to invest in the future.
This was my realization earlier this month when I attended a Sacramento briefing with Nancy McFadden, Governor Brown’s Executive Secretary. She spoke candidly to a roomful of budding policy advocates (fellows in the Women’s Policy Institute and donors with the Women’s Foundation of California Legislative Action Day) about the very real budget crisis our state is facing. When asked whether Governor Brown will take into account the longer term impacts of certain cuts, she answered honestly: “We try to be visionary, but this year we have to focus on balancing the budget.” In other words, we can’t afford to think about next year (or next week!) when we are struggling just to keep the lights on.
In my work at Opportunity Fund, we help hundreds of low-wage Bay Area workers who want to escape the struggle of living paycheck to paycheck, and instead achieve financial stability. Our clients know that it is nearly impossible to find the time, energy and money to invest in the future (such as going to college or saving for retirement) without having control over their monthly budget. But once they take those steps towards balance, dreams can become attainable goals. We teach them to
- Know your income and expenses: Especially when it varies, it is critical to know how much money you bring home and what your expenses are every month (and if you have enough to cover them).
- Pay yourself first: Saving for inevitable emergencies is a must, and some money should be set aside as soon as you earn it.
- Track and manage the little stuff: Everyone has budget “leaks” that need to be plugged – small, non-priority items we often don’t even realize we are spending real dollars on.
- Maximize your income: Whether it’s becoming a part-time entrepreneur, accessing public benefits or being smart at tax-time, never assume the income side of your budget is fixed.
This spring we launched a new program called Start2Save to help our region’s lowest-income families set up their first rainy day savings account, starting with only $20 per month. Making daily sacrifices towards their financial stability, our clients not only show that the poor can save, but that taking control of your money is taking charge of your dreams. These families will go on to save for their children’s education, to finish college themselves, to start-up a business, to make those tough but necessary investments to move into the middle class.
If families living on $1,500 a month (in the Bay Area!) can find the discipline and change their mindsets so as to save for the future, I know the State of California can do it as well. It will take sacrifice, compromise and commitment –but we can do it.
Gwendy Donaker Brown is a 2011 Women’s Policy Institute Fellow and Director of Policy & New Initiatives at Opportunity Fund, www.opportunityfund.org.
- A Budget for the Future is a Budget That Works for All: Read this Huffington Post Op-Ed by Judy Patrick (President and CEO of the Women’s Foundation of California) about investing in California’s future.
- Women’s Policy Institute
- Opportunity Fund