How To Manage Money While Building Wealth

How To Manage Money While Building Wealth

what’s up legacy builders I’m Rob I’m
Reshawn and this is learn hustle grow learn hustle grow is all about creating
a legacy we’re here sharing our passions for money marriage and travel with other
legacy builders like you we live in a world of instant gratification we don’t
have to wait for anything in the United States of America credit cards make it
possible to have whatever we want right now unfortunately those banks want their
money back most of us become interested in personal
finance once we realize there’s no money left at the end of the month for some of
us it reaches the point where we don’t even want to open our mail we know that
those envelopes contain bills that we cannot pay how does it get that bad any
of this sound familiar when I signed up for that credit card I got a great
discount man I really needed those kicks when I checked my account the money was
there I had to fly home for the reunion I haven’t seen those folks in years you
only live once I didn’t plan on getting sick I can’t afford health insurance we
deserved an opportunity to get away it was our anniversary
then there are bills that must be paid like rent car note and food but the rest
of it will have to wait maybe you’re thinking I should see a financial
advisor well that depends do you have a surplus of funds financial advisors work
for people who have money to invest if you are watching this you are likely in
one of two camps you make good money and don’t know where it’s going or you don’t
make enough money to accommodate your lifestyle would it surprise you to know
that there are people with MBAs in finance who struggle to manage their own
money if a degree doesn’t make you an expert how do you begin to understand
money you can do this start by looking at what you’re spending that’s right
you have to you’re spending there’s no way around it
the good thing is that it’s really easy to do you can use either your bank or
credit card spending report feature you can also use a third-party app like mint
or personal capital both are free apps that allow you to connect all of your
accounts they’re very useful if you have multiple credit cards and checking
accounts spending reports present the data and numbers and nice pie charts
take a look at where you’re spending the most what surprises you
if you eat out you might be surprised at what you’re spending on restaurant food
you might also be surprised by the miscellaneous and uncatted eyes expenses
if you go to the ATM often the amount of cash you withdraw could be a real
shocker there are some people who think withdrawing cash is a way to save money
this is only the case if you are not using credit cards or debit cards there
are two savings accounts that are essential at every stage of building
wealth your 401k and your emergency savings we know that there are those who
say you should stop saving for retirement until you are debt-free we
disagree with this statement paying off your debt can take years you are losing
the benefits of market performance and employer match you are not getting any
younger you cannot finance your retirement for
that reason you have to pay yourself first save 5% of your salary in a 401k
or employer equivalent put $1,000 into an emergency savings account the
emergency savings is just that this $1,000 will take the place of your
credit card getting your finances in order will take some serious adulting
you have to define your emergency that means getting clear on the difference
between a need and a want it also means being able to tell yourself no remember
not now does not mean never don’t get derailed by a medical emergency health
insurance is critical at every stage of life make sure you’re covered
may your 401k savings using your employers online portal in addition to
saving for retirement a 401k also reduces your tax burden the remaining
95% will be used to pay off debt and cover your living expenses next evaluate
your top three expenses in most households its housing transportation
and food can you reduce these costs here are a few ideas housing could you move
into a less expensive apartment or a neighborhood when is the last time you
got a quote on your homeowners insurance could you get a roommate maybe – hmm how
about moving in with family transportation if you move closer to
work that you can save money on gas tolls and time also when was the last
time you got our auto insurance quote if you are focused on building wealth a car
note can impede your progress sell the car and get a reliable cash vehicle food
is an area where we can have a big impact how much you eating out can you
cut that in half no time to make lunch meal prep enough for at least three days
to reduce lunch spending too tired to cook dinner start the crock-pot before
you leave for work hard to cook for one share or swap meals with a friend or a
neighbor need a social life take turns hosting a monthly potluck with friends
there’s no easy way to say this you have to stop spending you have to
change your old habits what you have in your closet has to be enough no new
clothes shoes or electronics all travel must be put on hold if you are looking
for more ideas on ways to save money check out our videos this is only
temporary you are in the process of building wealth you can do this we know
it’s hard not to spend anything if you’re a spender then this might seem
impossible you’re spending must be reduced to a
monthly allowance the decision to implement an allowance was a
game-changer for us prior to getting married
we both had grown accustomed to managing our money the way we saw fit knowing we
had spending money made it easier to work together we applied the bulk of our
funds toward necessities savings investing and giving so how much do you
get for your allowance set aside 5% of your monthly income for non essentials
before you say oh my god there’s no way this is enough remember this is the
exact amount you are saving in your 401k ask yourself does it really make sense
to spend more on anything else other than your future if you can spend less
than 5% even better the time has come to take a closer look at your lifestyle we
have a tendency to spend more when we earn more this is called lifestyle creep
before we know it once become needs stop trading up your phone monthly cell phone
bills for a family have increased from $100 to over $500 get yourself a pay-for
device dining out entertainment and gifts are limited to your allowance give
family and close friends a heads-up regarding your desire to be debt-free
even if they aren’t on board they need to respect your decision personal care
and hobbies must also be covered by your allowance for example haircut for me
pedicure for my wife you’re putting your spending on whole until you can pay off
your debt the more focused and disciplined you are the faster you will
reach your goal you have cut your expenses and reduced your spending
somehow you still don’t make enough to achieve your goals sometimes you just
need more money we understand and we have a few suggestions start with
earning more money on your primary job we have an entire video on the topic of
career hacking this video covers the topics of getting
a raise and career advancement start selling most Americans have more than
enough stuff thankfully the Internet makes it easy to sell anything it’s time
to purge your home if you have a storage facility everything must go side hustles
what skills do you have can you start our online business neat ideas explore
YouTube and the podcast app on your phone
there are podcasts for just about anything that interests you there are
quite a few on the topic of side hustles let’s talk about dead
we’ve already suggested selling the car if you can’t sell it for whatever reason
you have to include it in your debt pay down you’ve increased your income and
sold miscellaneous items apply all of your increase towards high interest debt
choose the method that works best for you if you are motivated by quick wins
choose the debt snowball method pay the minimum balance on all debts and
anything extra goes on the smallest debt motivated by paying less interest choose
the avalanche method pay the minimum balance on all of that anything extra
goes towards the debt with the highest interest rate we paid off our student
loans according to the lender schedule if you’re overwhelmed by student loan
debt you can use the debt snowball or avalanche method on those too so when do
you get to invest outside of your retirement accounts yes if you’re going
to build wealth your money has to work for you we invest in both real estate
and the stock market both options involve some risk we are comfortable
with those risks because we have taken the time required to educate ourselves
with that in mind your first investment should be in yourself invest in your own
education read books listen to podcasts take online classes we are working on
our first ebook and online course watch for announcements on all forms of social
media can you invest with debt sure you can do
you have an income surplus or savings that will cover your expenses in case of
a loss if not an investment gone wrong can land you in deeper debt and filled
with regret those are our recommendations on how to manage money
while building wealth are you paying off debt have you increased your income in
the process do you have an allowance did we miss
anything if you have questions now’s the time to ask we want to hear from you
leave comments below see you in the next video

1 Comment

  1. Nappystorm says:

    Here I am back again, commenting and ish. UberEats take all my little money. I started saving 10% of my income thanks to one of your older videos. Taxes were eating me up so I increased my 401k withholdings so they take out less taxes

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