Life & Legacy: Creating Your Roadmap

Lesson 14 of 19

Financial Priorities

 

Life & Legacy: Creating Your Roadmap

Lesson 14 of 19

Financial Priorities

 

Lesson Info

Financial Priorities

There's there's one uh general template rule and we'll think about breaking it down it's called the fifty twenty thirty rule this specific example I took there from the learnvest site which also has got some good information and resources and articles on it as well but essentially what it means is that you take how much you have and you break it into these categories and fifty percent of what you make goes into four things you get four things in your essential expenses bucket and that's housing transportation, utilities and groceries this is what it takes till like just keep it going right so half of what you make should go there and then twenty percent we're not doing fifty thirty twenty because the twenty percent is your financial priorities and those should come if we're thinking about it priority wise after what your essential things are so for prioritizing twenty percent of our income into the financial things that are important the types of things that that can go to our things l...

ike an emergency fund paying off your debt saving saving for retirement that kind of thing and then the rest of it is lifestyle so we're talking about the things that we often smushed into the essentials category we're talking about cell phones were talking about cable we're talking about haircuts we're talking about everything else that's out there um cable charitable giving personal care all of the other things that are non essential and non financial priorities so just for fun let's start talking about our buckets and so I would like for you guys to go to the part in your worksheet and I would like for those guys of you at out in the world who don't have the materials with you to just work along with us you won't have the whole work sheet but fifty twenty thirty so this first one is just an example so let's start basic let's start with the doable one so young person molly makes thirty five thousand dollars a year and so what that ends up being is twenty two fifty a month net and so we're taking we're also taking out the the taxes and stuff we're taking about twenty assuming about twenty five percent is roughing rough so out of that money she makes you get to spend and bucket eyes bucket eyes which is a new word it's like smudge it and bucket ties were making up a whole new financial glossary of words here um she ends up her budget ends up making just about fifty percent and so she's spending seven hundred fifty on rent seventy five bucks on transportation said seventy five on utilities in two hundred for groceries um she might be somebody who lives in an urban area and she doesn't, you know go out to eat a lot her savings is going to student loans her roth ira and so that's coming out of her check. We're assuming that some of that money that's pulled out of the twenty five percent is also perhaps, ah work fund as well. And she's saving fifty bucks a month to travel, um, and her lifestyle. What that ends up being is six hundred seventy five dollars, for eating out whatever else she wants to have. So if you take it to the next one, yes, something is sort of missing from here, right? Insurance insurance. Right. Well, so that is that has to find that's a financial priority. Yeah, so I would say I would just call it out. Yeah. Excellent. Yes. So that's something that has to fit into into your financial part. And so when we're actually talking about, um, debt earlier, a lot of reasons why people find it hard to save or hard to buy the insurance they want is because twenty percent of their income is already going to debt or near twenty percent of their income is already going to debt. So this comes to the part where this look in a lot of information and a lot of priorities. And so the trick is to baby steps and not get overwhelmed by it, but know that while you want to pay down your debt, there are also some other planning things that you want to keep in mind, too, so debt has got the stranglehold on all of your choices and your options and limiting you from saving you want to be ableto get rid of that so you can start saving and or taking care of the insurance needs that you that you need so and this is one model not everybody is going to fit into exactly fifty, twenty and thirty, but if we're talking about some guard rails to maybe throw up around us and start making priorities, we want to start moving ourselves perhaps more closer to these bubbles and how big they are and how much room they took up in our life. So thinking big picture is super super important, but we're starting somewhere. We're taking baby steps, it's slow and steady and there's nothing to fear besides staying exactly in the spot that you're in right now that you already aren't happy with. So all we're doing is moving the needle a little bit more towards awesomeness and a little bit less towards where you are and where you I don't want to stay, so this is an example. That I have in the workbook of somebody who makes seventy five thousand dollars a year um it's kind of similar to the rough scenario of somebody who made the other money from our insurance thing and then the other one is you so let's just take the number of what you make your gross annual salary and privately um write it down it could be a made up one um if you don't want to write it down, cameras aren't gonna aren't going to get it but what you make and so this is just an exercise starting with if we're gonna bucket are our money towards in this way? How much does that mean and what does that look like? Just for fun? And so if you make, say, seventy five thousand dollars a year you as your gross your net of that would end up being about fifty six thousand five hundred twenty dollars so that's taking out the twenty five percent um and with essentials and financial priorities and lifestyle that ends up being you know you have after you take care of your essentials, what you have is about nine hundred forty two dollars left over for emergency fund debt, other things and you have about one thousand four hundred thirteen dollars set aside for your lifestyle, things and that's after you take away the essentials, so we're just removing that so just going into that it depends category and already since all of us are pretty much freelancers here it depend that net part is going to be a lot different because you start off with so much more tax that you're responsible for right right front so twenty five percent is pretty low from four different people and exactly it depends so what you want to figure out if twenty five percent isn't your net you want to figure out what yours is yeah and maybe that's a quarterly budget depending on what money you pay ahead of time to your taxes as a freelancer or if you are one of those people that I intend to pay ahead each quarter but never do would you settle up at the end of the year way even also you khun take this by month by quarter or by year but the goal is to figure out what you have to spend cut that in half and that's about what your essentials should cost and that about twenty five percent twenty percent of that roughly is where you want your financial priorities to go so there's a phrase called pay yourself first and so what you want to do is pay yourself first before you start paying other people and those that's a great way in this smudge it to get your buckets automatically going into those categories so if you pay yourself first and you don't even see it that you pretty quickly adjust to it not being there it's amazing how quickly we can readjust to stuff yeah like not buying lunch out not driving to work or paying for parking and taking public transportation there's simple ways that if you cut out some of the things that air convenient and or enjoyable and this one area because you want that two hundred or two hundred fifty dollars a month to go towards something else we want to have this something else so not getting a crappy sandwich from the deli across across the street is actually better because I'm really excited to save for that vacation next summer attacks what's that called the coffee tax poppy yeah you know they call coffee tax yeah, right well yeah a little bit a little bit little bit little bit so as little bits add up also little bits we do can really quickly retune ardiles to get him to those those buckets that we like over a couple of years you could have a down payment for a house right or your emergency fund built up yeah exactly what do you think you're now? What else should we dio so the other thing is the emergency fund and I just want to share with you. I mean, we talked a little bit about disability being one thing to replace income um if you're disabled life insurance being something to replace income if something catastrophic happens having an emergency fund is another way to replace income if something happens and it's, you know, and god willing and bless the fact that it's not a disability or a death, that you have options and flexible priorities, where if you lose your job, if you need to move, if you wantto take a working sabbatical, if something happens, you can kind of ride that storm out because you have a safety net and it's a safety net that may or may not be your choice, but it's a safety net that you have where these other things that you may or may not have purchased to cover you, they don't apply. So to build that emergency fund, um, you want to start early chase like you are saying, if you put just a little bit of money and each month you can start building your emergency savings and in a few years have that built up over time so you can have that six or more months. Sometimes the debt is the thing that's that's kind of literally like holding like there's, a little bit of debt that's like a cold, uncomfortable splash of water in the face each month and then there's the debt that is like holding your head under water and making you feel like, um not just, but honestly, that you're that you're stuck that you have to stay working in this job that you don't like that you can't afford this one thing anymore, because now you have that so on the one hand it's it's not good in general, but it also can make us feel paralyzed and in our situation and not give us the flexibility that we want to move forward. Um, and some other general advice is check on some insurance, get some to cover your vulnerable spots just in case, right? And of course, this is going to end up being all about you and what you need and what those are. Um and then so I've got one more little worksheet for us. One is called planning for the long term and so there's some questions here we're not gonna be able to get through all of them. But how are you with money kind of knowing knowing who you are, where you know, are you a german? I know. Are you a libra? You know what I mean? Um are you super intensive and organized? Or are you money? It's a gray, their moral come soon. So just knowing who you are and how you are is helpful. I'm thinking about how your money is matching or not matching your priorities is also really helpful um, write down a big list of everything that's on your list you know sky's the limit like have you always, always, always wanted to go on safari, then write it down? Have you always, always, always wanted to go back to school or have a studio or work part time while your kids were young or there's all of these things that we want, so knowing the big list of hopes and dreams around money large and small is nice, so you can see them all. And then once you see that big landscape, which of those ladder up to the priorities that you have, so you've always, always, always, always, always wanted to have a giant, enormous yacht and sail around the world. Awesome, if if that may or may not match what you wrote down in the line before, about what your, what your values are and what your priorities are, if your value is making sure that you always have flexibility because something if your value is you want to make sure you never get in a financial situation where you can't, uh, do something that's, it that's something else. So trip around the world awesome saving for college also awesome and so, because it's so personal, matching your hopes and dreams and wishes and stuff with really your priorities and your values is really your own, uh through line in a way it is your own divine ing rod that's going to frankly lead you and lead you to a water you know, for your own budgets and so then we're not going to be able to get through it now because money we could talk about money forever first of all but a couple of things that I want you to think about and this is going to be your homework um the lass a page or two on the worksheet is really thinking about not just what your priorities are and how and how you spend your money and how we can get those to be your chocolate in my peanut butter you know two great tastes that go great together your money and your values but how is your spending impacting you and your life so think so I'm gonna ask you I'm going to ask everyone to think about how you've spent your money in the past that's positively or negatively impacted you and how when you look at that list of your you know your reese's peanut butter cup of of of spending and priorities how you've been imagine that positively or negatively impacting you in the future so the decisions that you make now if you kind of close your eyes and think about how that's going to make you feel ten or twenty years later is this a decision that is coming out of want on. But you'll feel bad about. Or is this something coming out of something that is going to lead to more positivity in your life later, and so that's, really what we're doing. If we're getting out of the negative space, we're making some small, positive baby steps. Now. The goal is to take you to an even bigger, better place with money later on.

Class Description

Big decisions like preparing a will or making estate plans can feel scary or overwhelming, but those tasks are much less daunting if you’re prepared. Join Chanel Reynolds for an overview of the financial, legal, and emotional planning skills necessary to ensuring a lasting legacy.

During this two-day course, you’ll learn how to proactively initiate conversations with your loved ones about end-of-life plans — without causing them (or yourself) undue worry or stress. You’ll learn how to create your legacy with the digital and physical record of the narrative you’ll leave behind.

In this workshop, Chanel will give you concrete action items and tools for estate and long-term financial planning. You’ll learn about both living and normal wills, as well as the methods of creating them, including working with a lawyer, using online templates, and even drafting your own.

Chanel will also cover how intentional financial planning is a best practice for ensuring that you and your loved ones can live your best lives. You’ll explore preparing an emergency fund, identifying where you’re most vulnerable financially, and getting insured for long-term disability or illness. You’ll also determine which types of insurance are the best form of risk management for the curveballs that life might throw your way.

By the end of this course, you’ll have the practical skills and peace of mind you need to approach life’s biggest decisions and help your loved ones do the same.

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