Let’s talk about money. Making it and saving it, because all of us can so easily struggle with both. Each and every single one of us will deal with money throughout our lives. The difference will be in how differently we deal with it, when we get it, regardless of the amount. For as long as I can remember, I’ve known the importance of money and making it. And even when I wasn’t making much of it, I knew the importance of keeping it. I’ve even talked about my first entrepreneurial venture as a third grader in this post. I’m not a financial expert by any means, and there is still so much more I’m planning to learn how to not just manage, but grow my money in the future. When I talk about the things that I’ve financially been able to do, I get so many questions regarding how I “saved” for a wedding, or for a house, or for a lavish vacation – and I didn’t. I saved for no reason at all. I saved as a lifestyle and will share the financial rules that I live by that have gotten me to this place.
If You Are Not Rich, You Are Broke
I’ve been treating myself like this for a good decade and listen, it works wonders. If there’s a coupon for it, I’m using it. If the generic version has the same exact ingredients in it, I’m buying it. I will pick an item up and then tell myself “you don’t need it” and put it right back. I’ll drive past Chick-Fil-A knowing an 8-count meal would be delicious, but don’t need to spend $10 when I cooked the night before. Just because we can buy things, does not mean that we should. I say “I’m broke” so often, Nate really thinks I am! LOL. Luckily, I’m not broke. Mentally, I am. I can have $100,000 cash in the bank and I’m going to think exactly the same. I don’t have it to spend. Don’t get me wrong. I know I can afford to buy a nice bottle of champagne at a steak dinner, but I pass on a lot of things I can afford to buy simply because I don’t need them. A lot of bloggers I follow will buy the latest bag, or trendy designer sandals and that’s just not something I’m into. I’d much rather keep $1500 in my account.
You Should Be Saving 20% of Your Income
When you get your paycheck, put up AT LEAST 20% of it into a savings account automatically before you spend a dime. And then forget it exists! I know… I know… Some of us need every penny of our paychecks to make it to the next one, but most of us can truly afford to do this. It may take some sacrifice but it is absolutely doable. As your income increases, increase the amount you save. Not the amount you spend. I can’t emphasize this enough, but it’s not about how much you make, it’s about how much you keep.
“It’s not about how much you make, it’s about how much you keep.”
If You Can’t Buy it Twice, Don’t Buy It
Make that three times. For me, this doesn’t pertain to items like cars and houses, because most of us can’t buy two at a time with cash. I’m talking about Christian Louboutins, or pricey vacations, or even an expensive date night. If the thought of buying it three times makes you uncomfortable, you should probably pass on it. There are things I can buy five times and still don’t, because when I think about how much the item is x5, it helps me realize how ridiculous the purchase likely is.
Forget a Rainy Day, Create a Real Life Emergency Fund
23% of Americans have no savings account. Zero. Nada. Only 29% of Americans have 3 months of their expenses saved should something happen. 57% have less than $1000 saved should they need to handle an emergency that costs. That’s scary. Worst case scenario, you want to save until you reach a point where you have at least three months of your earnings sitting in an account. If you really want security, go for six months. I firmly believe in having a significant amount of money put up for no reason at all.
There’s an App for That
If you need help saving, or investing – there’s literally an app for that. Apps like Acorns or Digit will save your money, on your behalf, without you having to think twice about it. Mint helps you set a budget and visually see where your money is going or where you’re overspending. Robinhood allows you to buy stock in the companies you know and love (i.e., Starbucks, Apple, Ford), at small prices. Apps like Fundrise allow you to invest in real estate, without having to ever deal with a seller or buyer. Spend 30 minutes on Google looking into financial apps that can help you. It’s allllll there for you!
Use Cash. If Using Credit, Treat it Like Cash.
Getting an American Express credit card changed the game for me. Whatever you run up, they want back the next payment cycle and honestly, and whew! That can hurt. Now, I realize this is how we should be treating every credit card we have. Why are we running cards up thousands of dollars if we can only afford to pay them back $38 a month at a time? That makes absolutely no sense. If you run it up, pay it down. It’s that simple. If you don’t have it to buy in cash, think about whether or not you really need it.
Find Additional Ways to Make Money
In 2019, this is SO necessary and as time goes on, it’s only going to become more important. It’s going to become more and more impossible to survive off of a single income. So, so many Americans are living paycheck to paycheck and are hanging by a thread that could leave them plummeting into debt, poverty, or even homelessness by simply missing a single paycheck. We are privileged enough to live in a time where money can be made outside of our 9-5’s. For many, they don’t know what they can be doing to make extra money. My advice is to make a profit off of your passion. If you can’t determine what your passion is, a quick Google search can provide you with hundreds of ways to make additional money from wherever you are, with whatever extra time you have. What are you good at? What are your natural talents? What have you seen others succeed at that you know you could be doing too? With this additional money, you could pay down your debt, save for a family vacation, or just save for the sake of having some extra money should you need it.
Tackle Your Debt
Credit cards, and car notes especially. Student loans are one thing I feel differently about, so I won’t go into those. But I’m proof that you can easily buy a house or cars when you want to without having your student loans paid. Moving on… Make it a goal to tackle your debt and pay it in full. I. Hate. Car. Notes. And have overpaid every car I’ve ever had to pay it off within two years. I want to keep that money to myself. So let me hurry up and pay you what I owe you, so I can start keeping my money to myself.
What financial rules do you live by to keep you on track? Please share them below!