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How to Plan Your Financial Future

Lesson 18 of 18

Motivating Yourself to Save

Erin Lowry/Broke Millennial

How to Plan Your Financial Future

Erin Lowry/Broke Millennial

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Lesson Info

18. Motivating Yourself to Save

Lesson Info

Motivating Yourself to Save

Well on this final move, as well, I'm just going to get people prepped. Anybody who is tuning in, if you have your phone next to you, I recommend downloading an app either known as AgingBooth or Agify, I believe is the other one if you're on Android, or just quickly look up the term aging photo options for apps. We'll get to it in a second, but I just want you to have the ability to do this with us in realtime here. Everyone in studio already knew to do this. So, I want you to be able to participate as well. So, one thing that you-- What you need to know about retirement is, again, just like with savings, it's not just about the amount. It's about building the habit. Thinking back to Lily at the very beginning. She was 25, put $400 aside every single month for 40 years, and had nearly $1 million saved, and she didn't even scale up her contributions. You need to be consistent. Consistency is a huge part of this. So even if it's not a huge amount, think perhaps small percentage of your s...

alary, then it's able to be money that you're putting aside every year, and again, compounding interest, taking advantage of that, making sure it's working for you, especially at an early age. I also like the idea of just increasing by tiny bits here and there. So starting at 1%, I'm telling you if you put 1% of your paycheck away, you're really not even going to be feeling a difference. You might in that very first month. But very quickly, it's like that's what you always earned and what you always used. And then, how about every six months, inch it up by a percent until you get to whatever goal it is that you've set for yourself. Maybe it's 5%, maybe it's 10%. Heck, maybe it's 40%. Whatever it is, just inch it up bit by bit. Another thing I believe is truly important to consider, life tends to not get less complicated. A lot of times we do use this excuse of, well, I will make more in the future. It will be easier to do this when. The thing is, your life is going to change. When you're 25, maybe you are struggling with trying to figure out your career, not making as much money, having some debts you're trying to pay off. When you're 35, you might be wonderfully established in your career, but maybe, you've bought a house, maybe you started a family. Those things cost a lot of money. So just keep in mind that even as you earn more, lifestyle inflation and just life itself tends to happen. So, it doesn't necessarily get less complicated and easier, which is why I encourage you to get started right now. Well, one thing that can get really hard about that is this idea of actually connecting with the future, 'cause it's hard to think about such a long-term goal that is incredibly far away. We're really much more focused on the here and now, maybe something a bit short or medium-term. But 40 years from now, are you kidding me? That is so far down the road. But an interesting study that I believe came out of UCLA found that if you see an aged photo of yourself, you are actually more likely to connect with this future version of you. So, that is why I want you downloaded an app so that you can actually experiment with this idea of aging a photo of yourself. So, you might have already seen at any point in the beginning with these videos, my little headshot that tends to popup. So, I'm gonna show you and share with you this horrifying picture of myself. And I believe that this is supposed to be me at around 64. Yikes! Hopefully, I'm taking slightly better care of my skin. But I do encourage you to go through this experience of aging your photo and looking at that, and thinking, hey, I'm thinking maybe you're 85 years old. But this future you, I want to be able to give you a very comfortable life. You know, you mentioned earlier this idea of seeing people at end-stages of their lives who maybe are not in a great financial situation, how scary that can be. So starting early, being consistent is a way to protect this version of you. This also can be really horrifying. So for that reason, I also like the idea of connecting to your happiest time. I had a woman once on Instagram, I had posted about this and put that terrifying photo up of me, and she went, I just downloaded that app. I just tried this and this is really scary. So instead, I'm gonna print out a picture of me at my happiest time and that's what I'm gonna focus on, so that I know in the future, I'm always gonna be able to be this happy. And I really loved that idea. So, this could be a picture that you print out and put on your desk. Maybe, it's something that you have small on your desktop of your computer. Maybe, you tape it on to somewhere that's encouraging for you. But this idea that you are connecting to the future version of you and giving yourself this gift by starting early and being consistent. Because, I am now at the very end. Finally, gonna share this big secret for you-- This big secret with you about money, and it is that you have to determine what you value. I've mentioned it before, but I would love for everyone to take a moment to write down three things that you truly value. For me, it's things like investing into my relationships, being able to travel, and also, I love living in New York City. And it's an expensive place to live, but it's something that I invest in and I value, so I'm willing to pay the premium. And I want you to think about these things and how the way that you're behaving right now, how does that align with what you claim you value. And do you actually value these things, or are you spending in a way that doesn't align? Because ultimately, at the end of the day, life really truly is all about trade offs. So, I would like you to ruthlessly prioritize on spending what you value. You splurge on what matters, and scrimp where it doesn't. Because again, back to the initial idea I talked about at the very, very beginning of taking back control, you'd be shocked how much control you are in when you are spending in a way that aligns with what you truly value. 'Cause even if you're not making a ton, it still can make sure that you feel in control, and you're spending in ways that make you happy. Now sometimes, we have to spend on stuff that we don't necessarily wanna spend on. Looking at you debt, especially things like student loans. But thinking that if we're doing it aggressively, and we have a plan, we're getting out of it faster, and then, we can repurpose it to other ways. 'Cause like I said at the very beginning, the whole goal here is to make sure that you control money, and money doesn't control you. At the end of the day, those really are the two options when it comes to your finances. So, I just want you to feel empowered, to get your financial life together, and understand that's the real truth behind money. And you can, at no matter any salary, no matter the type of job you work, be in total control.

Class Description

Short on time? This class is available HERE as a Fast Class, exclusively for Creator Pass subscribers. 

According to the experts, millennials won’t be able to retire until they’re about 75 years old, and that’s if they’re lucky! And some data shows that three-quarters of Americans are not ready for retirement at all. No question about it, people of all ages and backgrounds are woefully unprepared for their golden years.

Most of us are too busy worrying about our current debts and daily costs of living to even think about retirement. But Erin Lowry shows you that putting just a small amount aside each month as early as possible will yield great results. She’ll give you solid advice about how to avoid excessive fees, costly financial instruments, and shady financial advisors.

Erin will also address how to talk about money with the important people in your life, especially those with whom you’ll be sharing your finances. It’s the best way to determine your financial compatibility and help you achieve your financial dreams.

In this class, you’ll learn how to:

  • Make compound interest work for you so you can retire at a reasonable age.
  • Find the right retirement account for your specific needs.
  • Figure out your level of risk tolerance and time horizon.
  • Choose an honest, helpful financial planner or advisor to help you reach your goals.
  • Navigate awkward conversations about money and feel less vulnerable.
  • Decide if you want to work as a team to achieve your financial goals.
  • Identify red flags about people’s financial habits and lives.

Class Materials

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Planning Checklist

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Chris Sundell

Amazing course!! Great instructor! Everything that's essential is covered. This has been the kick starter to my new year. Thank you!