A LIFE LESSON FROM THE ITALIANS: DON’T UNDERESTIMATE YOUR HELMET!
2 SIMPLE BUDGETING STRATEGIES YOU CAN IMPLEMENT TODAY
Paying off debt and saving money are the building blocks of a healthy financial life, but the statistics are dire: One-third of Americans haven’t saved a single penny for retirement, 38% of households have credit card debt, and 44% don’t have enough cash saved to cover a $400 emergency expense. If you see yourself in those numbers, there’s no better time than now to start working on healthier financial habits because April is Financial Literacy Month. Even with myriad apps available to help, budgeting can still feel intimidating. So, why not keep it simple with these two systems you can implement today? THE 50-30-20 STRATEGY Before she was a U.S. senator, Elizabeth Warren was a tenured law professor at Harvard, specializing in bankruptcy. During that time, she published the widely acclaimed personal finance book, “All Your Worth: The Ultimate Lifetime Money Plan.” Some 16 years later, her advice still holds up. That’s because Warren’s approach to money is simple and flexible. She suggests allocating 50% of your income to needs like housing, groceries, and utilities; 30% to wants like entertainment, vacations, and eating out; and 20% to savings, which starts by building a three-month emergency fund and then allocating savings to a retirement fund thereafter. If you have credit card debt, Warren suggests allocating that final 20% to debt repayment before you start saving. Otherwise, you’ll just backslide as interest mounts on your existing debt. If you’re able to save more than 20%, adjust the ratios accordingly. If you can’t save 20% just yet, start with less (even 1% each month adds up!) and make a goal to increase your savings by 1% each month or quarter. THE ANTI-BUDGET STRATEGY If Warren’s budgeting strategy feels too complicated, try financial expert and “Afford Anything” podcast host Paula Pant’s anti-budget. Each time you get paid, skim 20% (or whatever your current savings goal is) off the top, put it in a savings or retirement account, and spend the rest however you’d like. Pant’s logic here is that if you tell yourself you’ll save “whatever’s left over at the end of the month,” you’re unlikely to save anything. Free yourself from the worry by saving first, then spend the rest guilt-free. If 20% feels like too lofty a goal, start with whatever feels doable and work to increase that by 1% each month or quarter.
Twenty-one years ago, in March 2000, Italy changed a major traffic law: Suddenly, everyone in the country who rode a motorcycle, motorbike, or moped was required to wear a helmet. This included both drivers and riders, no matter how old or experienced they were. Just thinking about it, you can almost hear the collective groan of thousands of Italians shaking their fists at the sky! The goal of the new mandate was to decrease the amount of traumatic brain injuries (TBIs) in the area. This was a huge problem in Italy at the time because less than 20% of riders wore helmets. And guess what — the law worked! According to a study published in 2003, here’s what happened in the Romagna region:
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Helmet use soared to over 96%.
The total number of TBIs plunged 66%.
• The rate of TBIs that needed neurosurgery dropped 31%. • Epidural hematomas (bleeding between the brain and the skull) became almost nonexistent in moped crash victims. These results were amazing, and as Richmond pivots into spring, this story is on our minds here at The Mottley Law Firm. Even though Virginia has a helmet law similar to Italy’s, every year around this time, we see a flood of motorcycle crash victims who end up suffering from traumatic brain injuries. These injuries range from mild to severe, and they can have life- altering — or even deadly — consequences. While we can help those victims and their families by representing them in legal cases, we’d much rather no one got hurt on the road. So, if you’re taking off into the sunset on a motorcycle this spring, remember the Italians and do yourself a favor: Wear your helmet! According to a 2009 report from the U.S. Department of Transportation, if you’re in a motorcycle crash, that one simple step can decrease your risk of getting a TBI by 6%.
If the worst happens and you or someone you love is in a motorcycle crash, you can reach our team for help at (804) 823-2011.
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