Tips to Spend Smarter
Tips to Spend Smarter
11. Tips to Spend Smarter
Importance of Creating Financial Habits37:42 2
Your Snapshot: Where Are You Today?28:21 3
Creating Goals that Really Work27:43 4
Dealing with Debt26:45 5
How to Work with Your Debt22:26 6
Credit: Lifeblood to the Future24:35 7
How to Raise Your Credit Score24:32
Spending Smarter Plans (Budgets)33:13 9
How to Create a Spending Plan That Works26:31 10
Create a Weekly Spending Plan22:28 11
Tips to Spend Smarter22:51 12
Love & Money41:54 13
Make Your Savings Automatic36:44 14
Taxes: Don't be Afraid27:24 15
Which Retirement Plan is Best for You?42:26 16
Start Today - Where to Invest?28:03 17
Retirement Forecast - How Much to Save?33:59 18
How Much Should You Charge?13:35 19
Mutual Funds, Investments, ETFs44:55 20
Food Groups of Investments38:01 21
Diving Into Mutual Funds and Investments25:55 22
Deeper Dive Into 4 Food Groups of Mutual Funds25:17 23
Diversify Diversify Diversify32:04 24
Retirement Forecasting25:15 25
Funds: Back to Basics36:00 26
Your Financial Checklist: Life Insurance27:53 27
Long Term Care, Disability Insurance, & Wills29:32 28
Estate Planning & Home FInancing21:09 29
Kids & College28:47 30
Take Charge with 30 Minutes A Week38:13
Tips to Spend Smarter
So let's talk a little bit more about when you do have your weekly amount as little as it might be what can you do with it so javier airs I mention with you earlier is go to the atm once a week cash or credit not both so this is a good seg way and to talking about using a credit card so if you don't have debt or if you really are able to pay off your debt and you've got a plan and you want to use your credit card again come up with the weekly amount so if your weekly amount is one seventy five but you want to use your credit card then you don't take cash out and put that one seventy five on your credit card every week because it's not one seventy five for cash plus the credit or not one of seventy five for credit plus extra cash it's both so if you're doing two hundred dollars a week maybe you take fifty dollars a week in cash and then do one fifty in the credit card so that's usually what I do for me I don't like to carry a lot of cash I might do one hundred a week so if my weekly amo...
unt of seven hundred I'll take one hundred for cash and the six hundred put on my credit card no surprises when the credit card bill comes in I know what that weekly amount iss I know what it's gonna be you ever opened the bill? You're like yes, we've all been there I know you're not going to believe that, but if you start doing this, you're going to have weeks that you have extra money yeah it's true might be twenty bucks might be ten dollars put an envelope and put in your sock drawer I do that all the time I have an extra ten dollars like you can let it go into the next week, but now I just put it away I save it for that rainy day when I want to go out, I want to buy something or I just want to do something and I feel like, well, I wish I could I'm like, oh, I've got that hundred dollars I've got two hundred I forgot about or I savor fication like extra spending money on your vacation, but it's it's, you will have extra it's hard to believe that when you're walking through these numbers especially the sweet girls doing this she will start to have extra because she's looking at this being like I kind of make more money again that is the sum of her next tour but what is clear about this as she is valuing herself by paying these numbers and there isn't a lot to work with but she'll make more I have no doubt about that she will don't just leave the money in your checking account you won't save it you won't do anything with it I guarantee it you're just going to let it sit in there and you're just gonna keep spending the way you're spending you get paid right away what's going o fixed expense what am I putting into my different savings accounts start giving it up do it every week once a week it'll start to become a habit thirty minutes you know this this last one make your wallet as beautiful as possible of course this was I was working with this designer this beautiful when she really she did gorgeous like printing press design cards and stationary and she took her wallet out to pay me and it was in beautiful shape it was a gorgeous old vintage wallet I just remember thinking god it's gorgeous she's taking such pride in her money on a daily basis didn't think much about it and then a week later another client paid me the receipts were sticking out of every pocket the dollars were folded up she opened it coins fell all over the place she was iraq, she was a mess and I thought this is just an interesting comparison here are two people one is really valuing how they're treating their money the other person isn't so again you're listening to me you're all working so hard you're showing up to this course thank you you're also showing up to your clients were trying to make a cz much money and do something that you love treat your money the same way not saying go out and buy gucci wallet or an expensive wallet I'm saying we need about it take respect, take pride in it by a beautiful wallet it you know hmm are vintage and it doesn't have to be a lot but how you use your money every day really treated with respect so that was just a real lesson. And just when I saw literally these two clients comparison one god, I felt like she was so like not in control where the other was like oh yes how much would you like me to pay you? I feel like these budgets are really great and they worked really? Wait great when you break it down into a monthly amount but for example, two months ago there was no work for me absolutely for two months, zero work and then last month it was like a ten thousand dollars how do I create? Yeah, okay, I could have saved that better myself if I had tried to go in there. Yeah, so because that's my biggest thing that's, my biggest lutely no, no and it's funny because definitely my photographer clients get paid more like this, so you know I have some months maybe I make three thousand may make four thousand next month I make seven thousand eight thousand like they're just throwing numbers other it a point to show is like I usually make money every month, but it varies whereas I've some kinds that get paid nothing and then they get a check for ten thousand thirty thousand dollars I get it that's why? First of all the first exercise knowing your monthly amount it's so important and using percentages so if you have variable income for those of you that really get paid on a project basis or every other month and I'll grant you it's hard starting this budget process when you're not making a lot because you're going to have to dig into reserves a little bit so I love it if like you're getting paid now and you can start this because it's a little it is easier but it takes a while it takes a cycle it takes a few months to get this going, but if you use that as an excuse not to get started you're never gonna get started so just get started so the idea is again money comes in I have a plan around right away what is my tax bracket? Ask your c p a so the idea is that you get a check right away what is your tax bracket this is another benefit of being a freelancer you can write off a lot so if you are working for a corporation, you have absolutely no say over your deductions I mean, you can deduct very little you have to own a home that's probably the only way to do it I mean, you could have a lot of medical, spence is you couldn't write him off, so it is a benefit to be a freelancer and again, having a good accountant or sepa is somebody the brake said to me what's the c p a s o that's a certified public accountant. Um, so ask your tax bracket x ask your accountant excuse me and if you don't make a lot, you're not going to spend a lot, so start by taking ten, fifteen, twenty percent away and putting that into your tax savings account, which I'll talk about tomorrow but right away that money isn't yours taxes as soon as you get it, it's when you mean your tax bracket like through out the year like where you are, you're in the thank you sixty sixty to one hundred it's a percentage. So in this example you gotta check your twenty five per cent tax bracket you immediately take twenty five percent and you put that into a separate savings account you've attacked I have a separate savings account a capital one three sixty just for taxes and every quarter when it's estimated tax time and I my accountant sends me an email says you owe this much it's already saved no surprises, and she tells me that based on what I've earned so it's not less or more but it's about twenty five percent maybe I've a client pays ten percent cause she writes off so much she really she works out of her home, everything is out of her home, which we'll talk about tomorrow. I promise I don't want to jump ahead, but the idea is that you've a tax bracket so in this example, you gotta check for fifteen thousand right away you took taxes out, you had eleven thousand left, you take two months out that's where you need to have the total monthly number so this monthly number that I had that they earned and they so you know what? Your monthly numbers and put it in your weekly amount there, you still have to have the weekly him out, but, you know, in this case and I did a little bit higher it's forty five hundred dollars so in this case, you need you put two months because you're like, you know what? I'm probably not gonna get paid for another two months and that I will leave in my checking account because you are going to live on that for the next two months again if you spend mme or you're not gonna have it so it's an incentive and then right away I took some money. I transferred it to myself, ira, I put the rest in short term savings basically, like the next three months accounting? Yeah, you still have to pay your bills every week stopped of your weekly cash every week, but you're right away have taken three months worth and you just divided up. So you've got to know this. So those first exercises, you know, you'd asked him so much family about thie they are they complimentary? Absolutely. You have to know what your weak your monthly nut is on that's. Why, when we talk about insurance and things like that, I do like to boil it down to a monthly number because, you know, you could put it into savings or you could just leave it in your checking account. And when the insurance bill comes, you've got the money in there, so just being prepared a little bit. So just on a big picture basis is you've got your percentages, your tax bracket, your total dollar amount and then the percentages after that go to retirement in short term savings and then you can put more in here, you complaint well here we had debt so the nine thousand from the forty five hundred might include paying off the debt like that's part of that monthly numbers really putting in that monthly number so have a monthly number it's so important um okay why don't we go through some numbers before we go back to texas? All right, I love it this is so much time with so melissa g says here are my numbers forty five k before taxes thirty six k after I'm already seeing tear so thirty six k aft your taxes that's easy that's three thousand fixed expenses eleven fifty per month eleven fifty okay approximately twelve k in debt she says I'm the one that just got married and bought a house okay so she's got twelve k and debt okay but haven't paid anything towards my estimated quarterly taxes this year she has not she has not and making sure she has enough for april would be priority number one well and in april shall have okay yeah so that's what she needs to really say for that okay and she is earning so right off the bad she can she said she's some sorry saving how much what is your income before taxes? Forty five k thirty seven fifty minutes three thousand okay so at least for the next four months she'll save an extra seven fifty and taxes but she'll get a head start there so that's number one um eight so she's got eighteen fifty left so two hundred times for eight hundred let's do so I'm giving her one seventy five a week to live on which she just got married she's with a couple maybe they khun live on that maybe they can I'd like her to even live on a little bit less just because she's got a big tax bill coming up and she's got her debt to so that gives her eighteen fifty minus seven hundred yeah that gives her eleven fifty a month so I say again fifty dollars a month open that ira what is her minimum on her debt do you know uh I don't no it isn't okay so I'm going to do two hundred towards savings she might need to empty that out for taxes because she hasn't saved anything for taxes and I think her tax but won't be is high she thinks because she'll be able to really save the next few months but still you know she doesn't want to play catch up so fifty plus two hundred two fifty's eleven fifteen is also saying she's not sure what text breaks you might get from getting married and buying a house, right? Right no no no that's why I think she might not know as much but she really has nine hundred extra month and so what I would say for now until she knows her tax bill is I would do for fifty of debt and then four fifty of like taxes savings? You know, that way she can really beef up her savings until april. So and then, once she knows what the tax bill is, she kind of pay down the debt. You know, this for fifty could eventually go to pay down the debt or go back into savings. But we're kind of saving in an extra four. Fifty a month for back taxes, which, again, she might not need that much. So then she can really jammed down that debt. But at least we're starting this. This this goes without saying the fifty, the two hundred until the debt's paid off fifty, ira, two hundred emergency savings. So, first of all, congratulations that she's got the house she's earning money. She's focused on paying off the debt. She's got a great income. So kudos to her stood a great job. Great. Great job. Okay, go to the mme. Get a fancy wallet. Don't leave money in your checking account, find a money, buddy. And I so I have a great story of I taught a twelve week class, and I had just some lot of people signed up for it, it was a wonderful twelve, we kind of like a weight watchers for money and when I saw there were there were a bunch of women who signed up and they signed up with a friend I had a mother daughter I had two cousins was really kind of fun to see and the women who came and this happened available only women the women who came I'm with a friend had more success in that twelve weeks they had motivators they had something oh god I'm feeling brand no you did great this week remember deborah like you know you just saw that camaraderie you saw that togetherness so if you're feeling stuck with your money find a money buddy I mean I've had clients say okay I called a friend said let's do money competition who can save one hundred dollars let's do our budgets let's take this cost together like you know there's lots of things you can do with your money so the money buddy so maybe you're taking this class sign up for with a buddy and say let's do the homework together let's watch is together and I see the success it's kind of like if you're going to do training you're going to do better with a personal trainer or with a coach or with a group we don't necessarily work great alone and especially as freelancers were alone all the time so look at your money that way so get the help get the support that's okay food and snacks create a plan I cannot stress that enough in terms of just really looking at, like, where food kind of gives us that extra pocket, like in terms of whether we spend there's a hole in the pocket, you know? So I have lots of tips around that, um, I'll start with snacks like, if you know you're going to be out all day packed the snacks in the morning, packing in little bags because snacks khun b you know, whether you buy them at starbucks or you buy them at the grocery store, you buy them at the kiosk or the just the delhi, you know, that's two dollars here, three dollars here, bottled water again, this's is maybe you don't want to save the money there, but it can be an area that you're really really spending money that you don't care about that's not important to you lunches I started packing lunch, I'll be honest with you when I had kids because I was packing lunch for them at night. Wait, I'm spending an hour packing their lunch. Why am I not packing mine? And again, if it was a social occasion where I'm having lunch with a friend that I haven't seen in months different, I'll spend the twenty dollars fifteen dollars with pleasure. But if it's most the time where I'm just at my desk or in between clients or I'm on my way to a seminar really happy eating my leftover food a lot healthier actually, but I save so much money and then saying with the meals if you don't like to cook and a lot of people are busy or if you're working freelancer working all hours take sunday that was a big thing for me to so you have the money day as it did a little bit of a food day on the whole I don't work sundays and my family knows I get up early and I usually get up and I kind of make like either a big pot of stew or I make a big super make lasagna or make a big salad or I just spent two hours cooking in the morning I just get food ready for like a slow cooker and I'm not a chef by the way, I'm really kind of like I'm a great like open this salad bag and here's the salad dressing and there's dinner it's not a priority for me in that sense right now, so but at the end of the day I don't want to spend money on that where I feel like I'm wasting money, so create a plan around food and snacks and maybe it's taking two hours and cooking on the weekend so if you guys have your own plans, let me know um if times air tight and scars and I did actually a tv interview during the recession because a lot of people have gotten severance is in new york and they're like, what should I do with that money? So I didn't interview and this was the thing the greatest thing that came around from it is that times are tight, you know, there's a lot of you that don't have a lot of money as we saw, give yourself a treat just put a dollar amount on it and be really specific and that was a big message that came across during the recession, so maybe that treatise fifty dollars a month that you go out and have beers with your friends that night and have fun have a blast or maybe it's like once a month you get a petty manny and you feel great about it and that's you're treating the rest of the month you're really like cooking your meals at home or but give yourself that treat even ifit's little's fifty dollars a month or maybe it's a hundred dollars a week whatever you can afford your budget but do give yourself that because you are working really hard the rather exercise this where it is again oh so here's the picture of the house keep the weekly spending and you will have more money and that's what I do see, I absolutely see that that if you have a weekly amount and it's fluid that's temporary it's going to change, but what you're going to see is a freelancer is that when it comes time to pay bills, you're not what's in my account what's in my bank account what's online what's in my checking account because you've been living on a weekly amount it's like you step on that scale in the numbers a little lower eyes a lifelong weight watcher so keep the weekly amount and you will have more money I mean, I really I cannot stress that enough I couldn't imagine living without it I love that I have it and some weak side I don't keep it and I'm not gonna lie you have a weak core, you don't feel like it or you're so busy that you forget to do your wonder your money day it's okay looking back on it next week, it's all right more pleasure from where you are spending because you know you've done the work to sort of earned that pleasure so you kind of get more bang for your buck they're well and you know, the point that I think is here is that why are we freelancers? I mean, some of us air feel answers because we have to be we got laid off, we lost her job, but a lot of people are freelancers because they want to be they love it. They want to work in a creative passion field. They wanna have a non traditional lifestyle like I know for me, I've got a family and I've got a a career and I wanted to do both and so being freelancer, for me, it was a really big motivation, and I love what I do and I work really hard to get paid for what I d'oh so let me enjoy it is my point, so I'm not telling you to stay home and not do anything I'm just telling you, I really like value that you've worked your butt off for it and so treat that money the same way. So we talked a little bit about variable income for those of you that are really getting paid on a project basis. So over the break, take a deep breath, believe it or not, I think this is the hardest part. I mean, tomorrow we're going to talk about investments and mutual funds and that's going to be really scary for you because most of you haven't learned it, which is just so normal I mean, it's not what we're taught in school, so there's gonna be a lot of fear around it. So you're going to know I don't know it, and I'm going to learn about and I'm freaking out, but you're gonna learn pretty quickly and I think it's pretty exciting. This is scary, though, because there's a lot of fear around it, and it is part of our daily life terms of what we're spending and what we're doing with it. Look at it as opportunity look at your spending plan as a chance for you to make more money, because when you get very clear like this, this woman who made fifteen thousand, which, by the way, that could be a great salary for what she's making or a great income but by really going through her numbers and I hate to use there is an example because maybe she doesn't want to be. But the idea with this is maybe she's really looking at this and saying, okay, I need another thousand dollars a month I have got to find a way to make that, and she well, I have no doubt she will, so this is a way for you to start charging more into figuring out. Because it's not just about how can I meet my fixed expenses or my food, which is what a lot of us think, but you'll notice in every example I said, okay, what are you putting away for retirement but he putting away for a rainy day? How are you paying off debt? How you're taking care of taxes are you doing down payment money and so right away you're thinking I've gotta earn more money so I did sort of forced you to do it within what you're making, but now we've got a little bit more so your homework is look at your fax shakespeare fixed expenses what is your weekly cash amount again I say cash, but maybe it's your weekly amount and by the way, another tip is you can use one of those apse that I'd mentioned the very beginning pennies and envelopes just put in your weekly amount there so you could do it on a weekly basis. Where were you paying yourself so that's? Probably the most important thing that I've put here is most of us don't think about paying ourselves so where you putting that in and then calculate your percentages so have year? Do you know your tax bracket? Uh I don't know for this year actually don't know, you know, for last year uh I have to I have to actually go look at it because it's. Probably not that different, but no, that number that's. Where? Having a good c p a that I can email right away and say, what was my tax bracket? And they say, go ahead and look it up in your tax referencing. Now, give me my percentage. What? My percentage.
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