Hey! So you are new to personal finance, paying off debt, saving or investing and you want to know where to start?
Or maybe you are overwhelmed and confused when it comes to finances…..Well lucky you, because you are at the right place!
Money Life Wax is designed to help you do four things:
- Teach you about money and how to make money work for you.
- Improve your overall life by helping you gain financial control.
- Create Happiness – aka – “The Whole Ball of Wax.” Money is not the goal, happiness is, but money and financial peace of mind will create more happiness.
- POM POM – Plenty of Money & Peace of Mind
Alarming stats to consider & why your finances matter:
- 78% of working adults live paycheck to paycheck
- 7 in 10 adults do not have $1,000 to their name
- Divorce rates in America are over 50% – approximately 40% of divorces are the result of financial stress
- College graduates from 2016 graduate with an average of $37,000 in student loan debt
- The average American Adult owes $5,551 on credit cards.
- Over half of retirement age persons have ZERO in savings for retirement
- Raising a child from 0-18 will cost upwards of $250,000
- 66% of Americans do not understand compounding interest according to a GW study
- Most people have no clue how to pay off debt or save correctly – they spray money!
- The average American is negative at the end of each month
- Keeping up with the Jones’s, don’t catch this awful disease.
How to get started in 7 simple steps.
1.) Start with WHY
Start with figuring out WHY it is so important for you to take your personal finances serious. For starters, imagine having the peace of mind knowing you had no debt, or you are covered in case of an emergency. If those stats above don’t resonate maybe consider reading them again. Besides POM POM, what if you could help others like you family? Most importantly, starting with WHY can help you realize that you can accomplish your financial goals (imagine if we thought we could never pay off $300,000 – we would have never got started).
Write down three reasons you want to start taking financial control (I.E – family, future family, kids, savings, etc).
2.) Longer Term Goals
Everyone has goals – career goals, health goals, relationship goals, you name it. But do you have financial goals? Are your goals short term focused or long term focused. Come up with goals and dates to accomplish these goals. Write them down, then start figuring out how you will accomplish these goals by reading steps 3-7. Goals will lead you down a path and most likely change, but write them down anyways!
Debt free & Start a family 2019
Mortgage free & Acquire rental property 2020
Six Digits in Savings 2021
New Home 2022
3.) See where your money is going
Live off 40% of your income and save/invest/pay off debt with 60%. To correctly do this budget, budget, budget. In order to start making steps towards the 60/40 you need to first see where your money is going. I have attached a link here to a downloadable budget we use that helps you step by step. Use Mint to track your progress. Be honest and pay yourself first. Pay yourself first, for example, means we pay the amount we direct towards debt each month ($5,000), then our bills, about $3,200. All extra is left over for spending or saving.
4.) Find ways to cut back and increase your cash flow
In order to go all in with the 60/40 and work towards the 70/30 you have to find out where you can cut down expenses. Easy ways to start – look at cable, eating out, bars/entertainment, and your grocery bill. Lose the cable, establish a eating out/grocery budget and see about reworking your internet, cell phone, and insurance bills. We generated over $800 in the process of doing this.
5.) Read more (the best investment is in yourself)
Whether you read my blog, or other blogs, be consistent about becoming financially literate. Here is some food for thought: you took 4 years of math in high school, yet you probably took zero classes on finance, maybe 1 at the most. What do you use more as an adult? We use money every day. I recommend reading blogs and books. Here are a few good books to start with:
Slight Edge (discusses making simple decisions and creating good habits)
Start With Why (did you think I created step 1? Ha! No you can thank Mr. Sinek for that)
Millionaire Next Door (an in depth case study on the habits of millionaires)
Rich Dad Poor Dad (learn about money and taxes)
5 Love Languages ( Happy wife happy life! Great read for couples & getting on the same page, therefore attacking finances together!)
Look at other ways to make income. In 2017 there are lots of ways to make money besides your 9-5. Do not put a limit on your ability to earn. Start actively seeking ways to earn. Just creating an extra $100 a month is equivalent to a $1600 raise at your job after taxes!
Read here to find side hustles to make extra income!
Read here how to start a blog that can create income: (coming soon sorry no link, tune in next week 🙂
And the most important step of them all….
7.) Be Honest
Be honest about your finances!!! You can fool everyone but yourself. At the end of the day your finances only directly affect you and your immediate family. Don’t lie to yourself. In order to be honest with your finances: Assess your financial value!
Imagine your personal finances as a business and you want to know what your business is worth at the end of the year. Using the budget sheet where you filled in your projected expenses and projected income, look at the yearly difference at the bottom right corner. What is your number? Take that number and divide it by 365. That is what you are worth per day. The most important business in the world is YOUR personal finance business because you control it! Would you want to buy your business?
If you answer that last question honestly then you are well on your way! Using the 6 previous steps will help you increase your daily value, and long term you will be glad you did.
Next few steps:
- Subscribe to my blog – there is some in depth debt acceleration tools I write about that is definitely worth learning about, but you will need to develop and emergency fund and a positive monthly income first. Learning more about finances can only HELP your future, so subscribing below or over on the right side of the screen is your best bet!
- Set small goals that you can accomplish early on. As silly as this sounds, saving $25 a week for a month is a great start!
- Line up your debt and read more about paying down your debt and WHY here.
- Read about how we paid off $109,000+ here & if you are considering refinancing student loans read this first!
- Email me if you have questions!
Read more: Our Crazy A$ Student Loan Debt Story