Financial Success Roadmap (How to Save So You Stop Worrying)

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MONEY.

Name another word that invokes fear, excitement, and conflict in the same way money does. I’ll wait.

*silence*

Here’s the cool thing though, money doesn’t have to freak you out. In fact, once you get to know money and really start to understand it, it becomes your friend. It becomes something you feel at ease about and maybe even comfortable around?

This could be you

I know–hard to believe, especially if you come from a background where this wasn’t the case. But hear me out: No matter your background or current situation, with the right education, mindset, and habits, money woes will be a thing of the past.

If that feels totally out of reach, stick with me and we’ll get you a little closer by the end of this blog.

The Facts

I polled a bunch of my Instagram friends to find out what their relationship with money looks like. The results weren’t exactly shocking, but they were a nice reminder that money matters…to everyone. Here were the results:

Average salary first year in a “big kid” job: $47,700

Average amount of current debt: $49,500

$56,000: The average amount people felt would be a “good salary” at age 25

Biggest money-related fears: Not being able to provide for a family, not having enough money to live well in retirement, needing to ask for financial help, and not having money to pay for an emergency.

50% of those polled said they’d be able to pay for a $5,000 emergency today–but 50% said “absolutely heck no.”

Other: The majority of those polled said they get their money information from their parents or books & podcasts. Plenty of people said they weren’t sure how to save/where to start but that they WANT to.

The Reality of Money

Clearly, money is a really big deal. Almost all of you have debt (that’s normal, breathe) and plenty of you make less per year than you owe to the government or banks. On top of that, everyone has some sort of fear surrounding money, but nearly all of those fears are rooted in lack–or the belief that there’s “not enough.”

First things first: It’s time to face and erase your negative views surrounding money. Not sure how? Read Jen Sincero’s books You Are A Badass and You Are A Badass At Making Money. I’m serious–read them and they’ll change your life.

Now that you understand money is simply a currency exchange and not something to fear, you can start taking tangible steps toward a financially secure future.

The steps won’t look like this…but you get the idea

First Steps: Inventory and Budget

Before you can tackle any savings goals, you need to figure out exactly where your money is coming from and where it’s going. The easiest way to do this is by tracking absolutely everything. I do this in the notes app on my phone, but some of you may prefer an Excel doc or a fancy tracking app. Anything works. The point is to track every penny in and every penny out–including where it went.

(These numbers aren’t accurate–but it gives you an idea)

With these numbers in hand, you can look for ways to reduce spending or make more. For instance, I realized I was spending nearly $400/month on groceries (FOR ONE PERSON!!!) Why? Because I bought way too much fresh produce and it went bad before I could eat it all. Then I’d buy more. And the cycle continued.

Now, I have a strict spending budget each month. I looked at my numbers and asked myself: What’s a realistic amount of money to spend on each category per month? And I stick to that number. That’s the only way budgets work! By sticking to them completely. Which is why at the end of every night, if I spent money that day, I track it in my budget. This keeps me accountable daily, and is a good reminder of where I stand financially. Not sure how to break up your budget? See how I do below.

My categories:

  • Rent
  • Emergency Savings
  • Retirement
  • Other Investments
  • Utilities
  • Car Payment
  • Loan Payment
  • Phone Bill
  • Insurance (Renter’s & Disability)
  • Gym
  • Groceries
  • Dining Out
  • Oliver
  • Travel
  • Home supplies (paper towels, soap, etc.)
  • Gas
  • Subscriptions (Spotify, Netflix)
  • Gifts
  • Fun
  • Miscellaneous

Savings: A How To

You’ll notice that my savings and investing categories were at the top of my budget. That’s because saving for your future is one of the most important steps you can take today. Yes–even more important than Starbucks.

What I do every month:

  • Automatic deposit into my emergency savings fund. This account is an online high-interest savings account with Goldman Sachs. It makes more interest than a typical savings account but is totally accessible whenever I may need it. Your emergency savings should have 3-6 months worth of expenses in it. For me, this looks like $12,000-$18,000. Once you reach that number, you can start putting money away elsewhere. Oh, and an “emergency” shouldn’t be taken lightly. We’re talking: car totally breaks down, you need emergency medical help, or you’re on the brink of losing your home…don’t dip your hand in the cookie jar to pay for a vacation.
  • Automatic deposit into a retirement account. Retirement is closer than you think, and the earlier you prepare, the better off you’ll be. If you picture retirement full of travel and beachside vacations, you better be saving loads of cash. My best advice? Save 10%-15% of your income specifically for retirement. This includes employer-matches (if your employer offers a match and you’re not AT LEAST saving that amount…I’m coming for you). I’m self-employed, which means I don’t have a 401(k)–I have an IRA. However, you can have both–a 401(k) with your employer and a separate IRA on your own. Though the IRS does have rules surrounding each of these (ask a financial advisor for help).
  • Automatic deposit into other investments. I own stock separate from my retirement account and have money invested in another brokerage account (mainly mutual funds). I think of these as learning opportunities–a way to see how investing truly works. I don’t put a whole bunch of money into either of these, but enough to learn trends and make a little bit of extra cash.

You’ll notice that all 3 of these are automatic. Why? Because then I don’t even think about them. I never miss that money because it was never in my account to begin with. You should do the same.

Debt

You’ve made a budget, you’re sticking to it monthly, and you’re setting away a solid amount of cash for retirement and other future needs. GREAT! I’m proud of you. Let’s tackle debt now.

Some people think you should pay off all debts before you start saving. I think that’s silly–so I do it at the same time. And depending on your situation and the interest rates on your loans, you probably can too.

Just like we made saving automatic, do the same with your loan payments. Oh, and up the amount you pay each month. Don’t settle for the minimum.

Think you can’t possibly afford to do this? I think you’re wrong. And I think you’re telling yourself self-limiting excuses about money. I say this from a place of love–but also because I’ve been there myself.

You can always cut back more (get rid of subscriptions, live somewhere less expensive, dine out less, stop getting your hair & nails done, etc.) and you can always make more money. #facts

Personally, I’ve doubled the monthly amount I owe on my loans–in turn, nearly halving the time I’ll be in debt. On top of that, I put any “extra” cash at the end of the month toward paying these off even quicker. Paying off debt is thrilling, almost like a game, once you get into the swing of things.

Now What?

Inventory: check

Budget: check

Savings: check

Debt paid: check

Next steps:

  1. Pat yourself on the back and take a moment to appreciate what you’ve done. It’s pretty cool feeling financially literate, huh?
  2. Continue with the plan. It’s easy to feel comfortable and stop saving like you used to or up your budget because you’ve got #money now. Don’t. It’s a trap. And you’ll end up exactly where you started.
  3. Make your money work for you. AKA: INVEST, INVEST, INVEST. We’ll talk about this another time…

If you’re still feeling confused or need a little extra help, find a financial professional in your area and schedule a meeting. Bring all your basic info with you: accounts, amounts (in accounts & debt), goals, and a list of questions. Advisors are like the coaches of the money world–and we could all use a coach, tbh.

If you’ve got money questions or comments, drop them below–let’s talk about it.

Positive Vibes,
Kails

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