Do you feel like you’re running the financial month-to-month marathon? If so, did you know most of your peers are in the same situation (I know it doesn’t feel any better, but you’re not alone)! According to a CNBC article finding more than 49% of people are living paycheck to paycheck. Almost half of all people fall in this category!
We’re an honest company and this article will not provide “golden advice” or provide you Aladdin’s genie’ x/y coordinates, but reasonable tips that will save cash, and restore your financial confidence for when diaster strikes.
The best financial advice I’ve ever read – “All decisions you make should help you move from being a laborer to being a capitalist.(1)” To better emphasize this point I’ll copy the section verbatim. “As a laborer, you are paid a wage for your services. It does not matter if you are police officer, factory worker, doctor, lawyer, or clerk. You are paid a wage for doing some form of work. You are exchanging work for money. As a capitalist, you are paid not for the value of your labor, but for the use of your money. This comes in interest, dividends, or price appreciation, but in one way you are being paid to allow others to use your money. (pg. 11 of Your Money Ratios for Financial Security).
Ok, so how’s this help? Well, first we need to figure out why we’re working in the first place and ultimately what we’re trying to achieve with our earnings. If you’re like the 49% of American’s your in survival or stay afloat mode, but this sentence (1) could help you re-identify how you’re spending, saving, or using our resources we work hard for.
So here’s our 4 financial tips :
1.(INVEST) Create an Acorn account. This site links to your debit or credit account and round’s up your change to a separate investment account (you pick your portfolio type). It’s definitely a millennial thing, but there’s other advantages as well such as: set-up monthly transfers, incurs interest through investments, and rid’s the old coin jar underneath your bed (which is losing value to inflation!)
- Theory: $25 a month/$6.25 a week -$15 monthly transfer with change roundup
2. (SAVE) Create an Ally.com account. Create an online savings account (yield’s currently at 1.45%) and give it a nickname – emergency fund, Kyle’s college, or new roofing system. The charges are low and some accounts don’t even have them. This online banking company keep’s your hard-earn money out of sight, while planning for your next expense and start small 5$ a month.
- Theory: $5 a month/$1.25 a week – $5 monthly transfer
3. (DEBT) Trade your monthly car payment in for a reliable vehicle vehicle and preferably a gas saver. According to an article on the financial website Motley Fool over 40% of American’s have a car loan. The average monthly car payment was $503 a month (2016)! $503 a month is almost 75% of the average monthly grocery bill for a family of 4!
- Theory: $503 a month/$125.75 a week – No car payment so you’re making $
4.(RETIRE) Common misconception “I can’t survive the month, let alone think about when I’m 70!” OPEN A ROTH IRA ACCOUNT!!!! IF YOU DON’T, PLEASE LET ME USE IT! This allows you to save up to $5,500 a year and invest it in the stock market! It’s all post-tax dollars, so when you withdraw when you enter in retirement and you don’t have to pay interest on the appreciation or dividends
- Theory: Reallocate 50% ($251.50) of the car loan to a Roth account & rest in emergency account ($251.50)
Here’s a recap of your 2018-2019 year with these tips
Invest Segment – $300.00 – Acorn.com
Saving Segment – $60.00 – Ally.com
Retirement Segment – $3,018.00 – Roth IRA Account
Emergency Repairs/sitaution – $3,018.00 – Savings account (2nd Ally. com Account)
Yearly breakdown = $6,396 in potential saving’s (excludes interest, dividends, investment decisions.