TYLER, Texas (KLTV) – UT Tyler Professor Susan Doty said it’s important to prioritize purchases as prices rise for items such as gas and groceries.
“There has to be a plan to earn more income or reduce expenses when things get tight,” Doty said.
Doty, who is the executive director of the Center for Economic Education and Financial Literacy, recommended having an emergency fund to help when the unexpected happens. That emergency fund, Doty mentioned, should come before saving for high-budget items.
“It can’t be something that goes for ordinary purchases, it can’t be something that is used for expected purchases. It has to be something that is there to protect a family who might lose an income, might encounter an emergency of sorts.”
Doty added financial wellness is about more than just knowing personal finance concepts.
“There’s a disconnect between literacy, knowing personal finance and acting on it,” Doty said. “Financial capability, financial wellness are all about acting on the knowledge.”
Doty said personal finance is about decision making and applying rational thinking to areas like investing in yourself, earning income, budgeting, understanding credit and debt, measuring risk and reward, financial investing, insurance and giving back.
The most common mistake people make is not being deliberate or following a plan, according to Doty.
“We encourage thinking critically, problem solving as it relates to all of those aspects of personal finance,” she said.
Doty added being aware of macroeconomic factors affecting household finances is important.
“The knowledge that people get from studying personal finance is about the decision making,” she said. “Being prepared when emergencies happen, being prepared when there are factors outside of our control that influence our budgets being deliberate.”
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