Announcement!
I am hosting another personal finance workshop and I would love for you to come!
This one again will focus on interactive activities and create a comfortable space to talk about personal finance. That said, this workshop will look different such as crash coursing specific tools that can make your finance journey easier. And there will of course be snacks as well!
If that sounds interesting to you register here.
See you there!
Live: The $400 Emergency Problem
According to the Federal Reserve, nearly 40% of Americans can’t afford a $400 emergency without borrowing money. While this may not be worrisome if you have parents to lean on, if/when you have to rely on yourself these types of emergencies can really throw off your groove.
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Because anything can happen. Always. Your laptop combusts, a medical issue arises, or a light pole ran into your car (right?), you need to be able to afford the unexpected without turning to a credit card. Especially considering credit card interest rates are so high, so they can make your debt grow... fast.
What helps is having an emergency fund. But putting one together requires budgeting. Budgeting can be tough though, so today let's focus on...
Learn: How to Actually Stick to a Budget
Building a budget is the first step, but maintaining it is a whole other process. So how can you make sure your budget isn’t just some numbers in an abandoned spreadsheet?
This is going to assume that you have already set up some sort of allocating system, preferably transferring money to different accounts for different purposes. If you haven't done this yet, or would like to learn more about that, respond to this email and let me know!
How to Maintain your Budget
There are a few ways to stay on top of your budget. Here are some basic methods, but these are not all of them!
The Daily Check-In – Make it a habit to check your spending every day, even if it’s just for a minute. This helps you actually understand how much is going out, and to what. If you are conscious of your spending, you will be more likely to maintain it.
Evaluate if your spending is on track to meet your goals. Also evaluate if your overarching budget is actually working for you, and adjust it if necessary.
Weekly Check-in - This is what I do. Every Sunday I'll review what I spent for the week and evaluate if I did a good job or (more often) need to cut back.
Monthly Check-In - This is a bit less hands on, which I think leads to being less on top of your money. But if this works for you then you should go for it. Do the same as the previous methods, but on a monthly basis. Just make sure you are able to ensure your spending doesn't get out of hand between check-ins!
Tips and Hacks
Stay Conscious - The best way to maintain your spending is to be conscious of it. Instead of mindlessly tapping or swiping, write down, track, and make sure you see what is going out.
Adjust as Necessary - Sometimes your budget isn't working. Personally, I have adjusted my budget at least 3 times in the last two months in anticipation of some life changes. So if your budget isn't working, make sure that it is realistic, and adjust it, so long as it continues to cover necessary expenses, and build towards your goals! That said, irresponsible spending is not reason to adjust your budget.
Use the 24-Hour Rule – Before making a larger, non-essential purchase give yourself a day to think about it. Half the time you’ll realize you don’t actually need that $70 collectible Barney costume.
Automation is Your Friend – Apps like RocketMoney, YNAB, or Monarch Money can track spending, alert you to subscriptions you forgot about, and even help you set limits. The less you have to manually track, the easier your budgeting experience can be!
Launch!
Pick one budget habit and commit to it. Don't revamp your whole system, but find something small to commit to for the long term.
This can be writing down in a note whenever you spend, on whatever you spend it on. Or downloading RocketMoney and reviewing it on a weekly basis. Or reviewing your credit card statement on a weekly basis to see where your money is going.
Work towards being more conscious of your spending.
When we do this, we gain more control over our money, rather than letting it control us. ;)
—Ben Brosnahan
