An Honest Conversation
Lean in. Come a little closer. Now, tell me do you have a healthy relationship with money? Do you manage it, or does it manage you? Your mindset surrounding money is deep-rooted? Oh, so you thought the only thing you got from your parents was their eye color and fingers. No, no no honey the way you think about money is passed down too. Did you grow up with a mother that was a spendthrift because she had to “look the part”. How about never having enough growing up and feeling ashamed because of it? Before you even realize it, you start perpetuating a cycle. The good thing about a cycle is that it can be broken, and it starts with you! praise break. Once you have this heart to heart with you, you can set yourself up to do better. Remember as a man thinketh…
Start Budgeting
Let me admit, budgeting has not really been my thing over the years. The thought of sitting down with receipts estimating my spending for the coming month was just daunting and boring. So, what I did was to simply allocate my money like this: 10% tithe(first), 20% or more savings and bills, and then treat the rest as my “do whatever” money. That’s not entirely bad, but I realized I wasn’t getting a true picture of what my money was doing. How many times a month did you really buy iced coffee? Girl, you have coffee and ice at home. How much was I really spending monthly? I had a rough estimate. It wasn’t until I sat and recorded all my spending that I realized how off I was. You see, a budget really gives you a snapshot of your money and puts you in a better position to reallocate or even cut certain things so you can stay on track financially. If you’re an Excel person, they have great budgeting templates you can use or you can download one of the myriads of Budgeting apps. The goal is to give every dollar a job and reorganize as necessary. Give it a try.
Create Multiple Streams
So, after I sat down and “penciled” my budget I realized that this 9-5 paycheck alone was not going to cut it. My mom and I have a baking business, but we weren’t really being proactive in getting sales. Looking at my budget provided the swift kick in the hind region I needed to “snap out of it”. So, what’s in your hands? What talent or idea are you sitting on that could be making you some extra money? If the pandemic has taught us anything it’s that one stream of income cannot cut it. Not sure what you’re talented at or what you should focus on? Start by looking at your pain points or any gaps you see in the market. It could be as simple as offering a tutoring service or as big as building an app so I can find good workmen who come highly recommended. I’d pay a premium to access an app like that because man I have some stories…
Build your Emergency Fund
Ideally, your emergency fund should be 3-6 months of living expenses. See how important that budget is now? Your emergency fund should be liquid enough so you can access it immediately or at least within 24 hrs., but not so easily accessible that you’re able to touch it when you have a shoe “emergency”. Say it with me, an emergency is anything that you did not foresee NOT those things that you can plan for. That means shoes are not included.
Start Investing Now
Investing is one of those words that sounds intimidating. Sure, there are risks attached, but you can invest around your risk tolerance. So, if you are completely risk-averse (i.e. can’t manage the thought of seeing a dip in value on your initial investment) then maybe putting most of your money in stocks is not right for you. You may want to look at an instrument that protects your money like a money market fund. However, if you are more risk-seeking because you understand that higher risk is often associated with a higher return and you can invest over the longer term then more risky assets like stocks may be for you. Also, it doesn’t require a ton of money to start. The most important thing is to do your research. Not only about the product you’ll be investing in, but about the broker you’ll be using. Those fees will hit you where it hurts if you’re not careful…again I have stories, but that is a conversation for another time.
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