How To Get Rich & Manage Your Money

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All images captured and edited by Jessi Rabe. You can find more of her work HERE

Hi Loves, 

“Money, money, money

 Must be funny

 In the rich man’s world.” – ABBA 

For many years, we have watched our parents, celebrities on TV, and friends handle their money. We have had opportunities to even dabble with controlling our own spending from part-time jobs. After college and landing that first “big” job, managing our incomes suddenly becomes overwhelming and stressful.  I’m writing this piece because I was able to save close to $10,000 in a year and three months on a less than average income. Yes, people, it is possible — thanks to the knowledge my Dad taught me and the example he led. Here’s what I learned and how to apply it. 

Every single one of us views money differently, but yet no one talks about it. A recent conversation with friends sparked me to write this blog because so many of us are just now starting to figure out how important it is to manage our money. We are all going through our struggles financially and learning by trial and error.

The financial expert in my life is my Dad. We jokingly call him Dave Ramsey because he frequently listens to his talk radio show and approaches money management using his theories. My Dad is always someone who I have looked up to for money guidance. Without his advice, I don’t think I would feel as financially stable as I do now.  I will share his biggest tips for “twenty somethings” and things he wishes he would have done at a younger age.

 First, there are a few different types of mentalities people believe when managing their money. The ones that I am going to focus on are:

  1. The Dave Ramsey Method 
    1. Save, save, save
    2. Don’t purchase unless you have the money
    3. Pay in Cash
  2. Robert T. Kiyosaki method author of “Rich Dad, Poor Dad
    1. Cash Flow = Monopoly
    2. You have to go in debt to make money
    3. Have a Rich Mindset

Each of these concepts have been proven extremely successful.  Personally, I flow between both of the theories.  I was 100% raised off of the Dave Ramsey Financial Peace University concept. 

My Dad instilled in me from a very young age that you have to work to make money, and when you have money, you save it.  No questions asked.  Thus, why I have a nest egg saved. I need a new car. I have had mine since I turned sixteen.  Will I use that nest egg to purchase a new car? Absolutely not! I started a second saving for that car so I won’t have to borrow much to buy what I want and I still will have that savings for the security I need.  My Dad taught me this.  Things you want are worth waiting for, especially cars that depreciate the minute they are driven off the lot.  

I save a large portion of my income from each paycheck. I pay myself first when transferring funds. The rule of thumb that my dad suggested was 15% of my income in my savings, or divided so some goes in savings and some goes into a company 401K. 

Dave Ramsey preaches that if you do not have the money to spend on something, you don’t buy until you do. I live off of this ideation 100% even if it is a purchase that will help build credit/put you in livable debt. My Invisalign purchase was the first time I had ever been “in debt” but I wouldn’t have moved forward with it unless I knew I could pay it off in full. I had the money in savings. My goal is to never touch my savings.

A lot of people jump easily into “debt” purchases. I’m talking about not paying for your new phone in full and doing the monthly payouts.  A trendier thing to do right now is Afterpay on your online purchases. This payment method will withdraw money from your checking account every two weeks until the debt is paid off… It makes some purchases not seem as intimidating.  I find these scary because so many are using this as their preferred way of paying. It’s providing a false sense of reality because you are not seeing the full price ticket item, just the incremental payments. After a few purchases build up, you start to lose track of how much money you are actually spending each month.

The second concept I wanted to highlight in today’s post is fairly new among the millennial age. Robert T. Kiyosaki is the author of “Rich Dad, Poor Dad” (HIGHLY, HIGHLY recommend his book or just watching his videos on YouTube). This is a book my parents read together back in the day when they were trying to figure out how to manage their money. 

My mind was actually blown once I started reading about his concept. 

Making money is like a monopoly game. You invest into different assets (green houses) until you can build something huge (red hotel). This simple game, is how the rich become rich. 

Now this probably doesn’t mean anything to you, but how about this?

“The moment you take a paycheck, you are poor.”

I had to really take a second to think about this. Once you start to work to earn money, your mindset becomes poor.  You start to say things like, “I can’t afford that” and “I have to wait for my next paycheck.” Or people believe that the more money they have, the more money they can spend. Assets are what make you rich, not money.

It’s funny how we go to school to learn to be an employee, to be specialized in a certain career, but never do we truly learn about money and how to manage it. That’s why so many of us struggle with our taxes, our money management, investing, etc. We were never taught how to do those things. 

Money is about mindset. 

So many people focus their time saying I want a career, and then I’m going to work my way to the top of it. Or they say, “I want to do what I LOVE.”

Newsflash, if you ONLY do what you love, you will achieve nothing because truthfully, the biggest achievements in life are doing things that you absolutely hate. Stop trying to just fill your passion, and actually fill your PURPOSE. Once you can say your purpose is starting to feel fulfilled, your passion will step into place.

I thought it would be fun to interview my dad for this post. Here’s his tips. He is not a financial guru. He is an individual who has taught himself and his children the value of money. I hope his advice might help guide you.

What are your 5 best money tips for a 20 something?

  1. Create a budget and stick to it.  There are apps to help with this.  My dad sat down with me and we figured all my expenses to help me understand what I could save. 
  2. At a minimum, maximize your 401K match before starting other investments. 
  3. Have multiple savings or money market accounts.
  4. Only spend what you have — use a debit card over a credit card.  If you use a credit card, make sure it’s paid off by the end of the month.  Know your expenses so you don’t over-spend in the month.
  5. Pay yourself first.  Rule of thumb 15%!  Once you pay yourself, don’t spend it.  It’s your security.

What is one thing you wish you would have done differently with your finances?

  • Be more aggressive in my investing.  I would have invested in more mutual funds at a younger age.

Most important piece of advice you have ever received on money management.

  • Don’t spend more than you have – live within your means.

What is a good money saving trick — especially for those in college?

  • Look at starting a “rainy day” fund. 

I hope this blog post helps you know where you are in life. I’m far from an expert, and I do make financial mistakes.  However, I think it is an important topic to talk about. Money is something we are never taught in school how to deal with.  Thank your for taking the time to read my post. If you would like me to go into greater depth on how we save buying groceries, dealing with cable bills, and having new clothes, please let me know. I feel like I have a good grip on budgeting, and I’m happy to share how to really pinch a penny.

Until next time, spread kindness.

HW

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