Today, Sakina Cole is a successful single mother of two children who runs her own media company.
But that was not always the situation. Her life was upended three years ago when she and her husband decided to divorce. The decision meant she had to raise her 10-year-old daughter and 12-year-old son on her own. At the same time, she had to forge a new financial reality and set a new path for the three of them amid the tumultuous recession.
The personal finance journalist, who is based in New Jersey's Hunterdon County, started Cole Media in 2003. She said business revenues fluctuate each year, and she has to ride out the wave of uncertainty.
The boutique publishing firm specializes in custom publications, editorial services and communications strategy. It also manages design, layout, editorial, and printing services to produce collateral materials, including newsletters, direct mailers and other informational handouts.
"As the economy changes, you have to keep changing your goals and plan for change," she said. "My children go to public school, which was planned. Prior to that, my son attended Catholic school and I was spending a lot on tuition each year. But now, I'm spending on property taxes what I would have spent on tuition because the schools are better in my community."
She has also come to rely more than ever on friends and family for economic support to help pay expenses for birthdays, clothing and activities fees, such as swimming. Because her relatives are generous, she does not have to include a line in her budget for those things, which do add up.
"Birthdays get expensive and I rely a lot on my extended family for support," she said. "My mother and aunt and will confer with me when a birthday's coming and I might set a budget for, say, $300 to see if they want to split it with me. They also might want to select their own gifts, such as video games for my son and an American Girl Doll for my daughter, which is great.
"Family help is also important when it comes to paying activities fees," she continued. "When my ex-husband and I first split, I received $125 for the kids' swim lessons. I'm not a charity case, but we can use the support of extended family. I have come to accept that."
On the other hand, she does all of the planning and saving for big-ticket items such college savings and summer vacations. All of this helps to provide her children with important lessons on financial literacy and becoming successful.
"Before the recession and the divorce, the kids were going to dance and different sports all in the same week," she chuckled, "but activities are not free. While you want your kids to be well rounded, you have to make smart decisions. I let them pick one activity each season at a price of $100 each, although family is helping to pay."
An important lesson she learned from the divorce and getting back on feet as a single mom is that it's important for people, married or single, to manage and save their money, whether it's $15,000 or $15 million.
"You have to keep budgeting year-after-year, or it will disappear," she said. "We used to dine out a lot before the recession. Now, I find myself like a mama bear, trying to stock the cupboards. Not only is it economically wise, it's healthier.
"I also don't hesitate to tell the children, ‘I can't afford that right now,' " she said. "It's definitely that kind of household and teaches them financial literacy."
Sabrina Lamb, founder and Chief Executive Officer of WorldofMoney.org, agrees, saying that everyone can save, no matter the economic conditions. Her group provides financial education to underserved youth in the New York City Tri-State area.
Lamb said that teaching financial literacy to children at early ages prevents problems from surfacing in adulthood. She urges parents to include children in budgeting discussions and hold them accountable for financial decisions. "Our relationship with money often reflects our self-esteem," she said.
She offers 10 tips to get on the road to saving:
- Conduct a rigorous financial and emotional self-inventory. Determine what percentage of your spending is emotional and/or need versus want based. Your wants versus needs and priorities
- Open a direct deposit account at your bank. Deduct 10 percent of the net income from your paycheck and put it into your "pay yourself first" savings account.
- Use your tax refund to begin building a four-month emergency fund.
- Review household expenses on a weekly basis. Meet solo or with family members to discuss spending in order to whittle down extraneous expenses, including unused gym memberships.
- Donate to charity products and items that are no longer in use in order to earn tax deductions. Or earn extra cash by selling them on eBay or at a yard sale.
- Meet with your bank account representative or financial advisor to discuss products, including certificates of deposit and mutual funds that offer the highest rate of return on your investments.
- Cut out unnecessary expenses by packing your lunch and balancing the fancy lattés and dining out. The savings could be great!
- Tackle debt by paying off the smallest balances. Also, have open and written communications with creditors. "No matter how long it may take, determine to become like a tortoise and advance towards becoming debt free," Lamb said.
- Drop expensive and toxic habits, such as smoking, which have a negative impact your health and wallet. Talk to your primary care physician about quitting and beginning a fitness program.
- Find a part-time job. There are online services (Guru.com, Freelancer.com, Elance.com), which seek virtual free-lancers with a wide array of skill-sets.
Lamb, a 45th NAACP Image Award-nominee for her book, Do I Look Like An ATM? A Parent's Guide To Raising Financially Responsible African-American Children, says saving should be a family affair so that everyone understands the importance of investing in the future.
"Challenge everyone in your home with the duty to brainstorm ideas to save costs," Lamb says. "All family members should contribute to lowering the operating expenses of the home."