Are you ready to take control of your finances but feel overwhelmed? Tiffany Aliche‘s book, “Get Good with Money,” is a fantastic resource for beginners looking to improve their financial situations. It offers easy-to-understand advice and practical tips without diving into complex strategies. Tiffany’s approach focuses on empowering you to manage your money more effectively. Let’s explore some key ideas from the book together!
Key Idea No. 1: Develop a Positive Money Mindset
In today’s world, life can throw unexpected challenges our way. Have you ever thought about what would happen if you lost your job or faced a sudden drop in income? The recent pandemic has made it clear that we need to be prepared for the unexpected. By changing how we think about money, we can build a secure financial future and stop worrying about unforeseen events.
Financial security is not just for the wealthy – it’s achievable for everyone. Getting started is simpler than you might think. But before we dive into the details, let’s talk about mindset. Many of us feel anxious or embarrassed when it comes to money, but that can change with a few exercises.
Having a positive attitude toward money is key to financial success. It’s important to understand the factors shaping your relationship with money. Your upbringing and societal influences have shaped your views, but you can break free from negative patterns by being honest with yourself about your financial habits. To get good with money, take a moment to write them down, think about where they come from, how they affect you, and how they might be keeping you from your financial goals.
Once you’ve identified your patterns, it’s time to take control and establish a strong financial mindset. Picture yourself as someone who is smart with money and takes charge. Instead of working hard for money, focus on making your money work for you.
Lastly, remember that you have the power to create financial abundance. Your current situation is just the beginning, not the end. With a positive mindset about money, you can achieve financial success no matter where you start.
Key Idea No. 2: Build Your Budget Foundation
Creating a solid budget is the first step towards achieving financial freedom. By taking control of your finances and tracking your income and expenses, you can fulfil your dreams, whether it’s a tropical vacation or going back to school.
To get started, grab a pen and paper and make a list of all your income sources, no matter how big or small. Then, list out your expenses and try to be as specific as possible. Track both your fixed and variable expenses, and don’t judge yourself or your spending habits, just be honest.
Now it’s time to crunch some numbers. Subtract your total monthly expenses from your monthly income to determine your beginning monthly savings. Next, assign control categories to your expenses. Label each one as, “B” for bills, “UB” for utility bills, or “C” for cash expenses like groceries or haircuts. If you find that your, “B” and “UB” expenses are costing you the most, you may not be earning enough. If your “C” expenses are the biggest drain on your budget, you may have a spending problem.
To tackle overspending, start by reducing your “C” expenses. Skip online shopping for a week or cancel any unused subscriptions. You’ll also need to look for ways to increase your income, but we’ll get to that later.
To make budgeting even easier, consider setting up two checking accounts – one for cash expenses and one for bills; and two savings accounts – one for emergencies and one for long-term goals. Automating your deposits and payments will save you time and energy and remove the possibility of human error.
Remember, budgeting is not meant to be restrictive – it’s actually quite the opposite. By setting a budget and sticking to it, you’re creating a better financial future for yourself.
Key Idea No. 3: Mindful Saving & Elevating Your Earnings.
Once you’ve got a handle on where your money is going, it’s time to start building wealth. Let’s take a cue from those savvy squirrels who stash away acorns for the future. While we humans tend to spend freely in good times and stress about money when times are tough, adopting a squirrel-like mindset can help you save more and worry less.
Start by changing how you view saving. Instead of saving to spend, save to invest or create a financial safety net. Start by setting up separate accounts for emergencies and personal goals. Aim to cover at least three months’ worth of expenses in your emergency fund. Then, figure out how much you can stash away each month for your goals, like investing.
Ask yourself, “What’s the smallest amount I can survive on monthly?” This is your noodle budget, and it will help you see where you can cut back and save more. Before making any purchase, ask yourself these four questions.
- Do I truly need it?
- Do I love it?
- Do I really like it?
- And, do I actually want it?
This will help you make mindful spending choices and shift your focus from likes and wants; to saving for needs and loves.
Now, let’s talk about boosting your income. You don’t have to work round the clock to make more money. By strategically approaching your current job and considering a side hustle, you can increase your earnings without overworking yourself.
If you haven’t negotiated a raise recently, it’s time to make your case. Keep track of your contributions to the company and update any skills that could make you more valuable. If your current employer isn’t willing to increase your salary, explore other job opportunities or consider a side hustle. Identify your strengths and brainstorm ideas for a profitable side gig. Even a few hundred extra dollars per month can significantly impact your finances.
Key Idea No. 4: Crush Debt, and Boost Credit
Managing debt and improving your credit score are also essential steps if want to get good with money. Start by listing all your debts, how much you owe and when it’s due. This will give you a clear picture of what you’re dealing with. There are two main strategies to tackle debt: the snowball and the avalanche. The snowball method involves paying off your smallest debts first, while the avalanche method focuses on debts with the highest interest rates. Whichever method you choose, consider setting up automatic payments to avoid missing deadlines.
Alongside reducing debt, it’s essential to work on improving your credit score. A good credit score can lead to better interest rates, loans, and credit card offers. To boost your score, prioritize paying bills on time and keeping your credit utilization below 30%. This means only using up to 30% of your credit limit and paying off the balance in full each month.
As you reduce debt and improve your credit score, you’ll have more financial resources to invest in your future. Continue to build your emergency fund and work towards long term financial goals, such as retirement savings.
Key Idea No. 5: Invest, Insure, and Engage
Investing can seem overwhelming, but it’s super important to secure your financial future. Basically, the goal of investing is to save and grow your money for retirement. To do this, it’s crucial to diversify your portfolio with a mix of stocks and bonds and consistently contribute. Remember to never withdraw more than 4% per year to maintain your retirement fund.
Once you’ve started investing for retirement, you can move on to investing for wealth building. Think about how much you can afford to contribute monthly after managing your expenses, savings, debt, and retirement. Do you want to be an active or passive investor? That will help you decide whether to invest in individual stocks or Exchange-Traded Funds (ETFs). If you’re feeling overwhelmed, start small, but don’t avoid investing altogether. Set investing goals and automate your contributions. Then sit back and watch your wealth grow. With time and commitment, investing can help secure your financial future and even leave a legacy for generations to come.
Insurance is another important part of becoming financially independent, and it can increase your net worth in the long run. Health insurance is a must-have, whether it’s provided by your employer or through healthcare.gov. Life insurance is also essential if you have a spouse, children, or major debt. Make sure you’re insured for at least ten times your income. Disability insurance is worth considering too, as it covers you if you can’t work due to an unexpected event.
Finally, engaging financial professionals can be a great way to achieve your financial goals. Creating a team of financial professionals and accountability partners can keep you on track. Having a money team ensures that you’re in control of your life and legacy.
Last but not least, let’s talk about estate planning. It might feel uncomfortable to think about planning for a time after you’ve died, but it’s important no matter what your bank account looks like. Start by identifying your beneficiaries and deciding who will receive your estate and take on your debts. If you have kids under the age of 18, make sure you have a care plan in place. You’ll also need to write a will and deal with your advance directives like a living will and durable power of attorney. Finally, document your long term care plan in case you ever need help with activities like eating or bathing. By achieving financial wholeness, you can make sure your money works for you and your loved ones, even after death.
In conclusion, “Get Good with Money” is a comprehensive guide to achieving financial wholeness through practical, actionable advice. It covers budgeting, increasing income, eliminating debt, and building a legacy in a simple and effective manner.
If you’re ready to take control of your financial future and live a fulfilling life, click here to grab your copy of “Get Good with Money” today.
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