Ugh, finances. Did you just think of a guy in a suit and spreadsheets galore, talking about interest rates, savings accounts, and market volatility? If you read through that whole sentence without yawning or getting distracted, I applaud you.
Ever since I decided to start my own business, finances have become a huge, ever present force in my life. Because my entire working life wasn’t dictated by a biweekly direct deposit anymore, I really had to make sure I could cover all of my bills, run my business profitably, and save something for the future me that wants to live well into her 90s (good family track record for that so you have to plan!)
The COVID lockdown gave me a lot of time to really delve into every facet of my financial life, and I dove in head first – with a little prayer and some great guides by my side. If you’re looking to change your financial habits, whether that means saving where you can, earning more, or being more knowledgeable about investing, keep reading. I am by no means an expert or advisor, but I do want to share what resources and action steps have worked for me in the last few months.
1. Find finance books and online resources and actually use them!
I know the internet is full of so much information, but finances are such a critical tool for you to leverage throughout your entire life to build the present and future you want. Reading about it or following someone who is more invested in learning and sharing about finances is definitely worth the time and effort! I recommend Ramit Sethi’s book I Will Teach You to Be Rich for a great comprehensive look at multiple areas of your life where more knowledge will go a long way. If you haven’t heard of him, that title might sound like a scam, but I would never recommend anything that didn’t provide real life value, and my accounts are my proof! Chapter 5 was a game changer for me – I’ll discuss more about it later on, but I highly recommend the physical book (for my fellow note-takers) and the audio version to listen to on a walk or in the car (he’s very entertaining!)
Speaking of entertaining, Berna Anat of @heyberna fame is also someone I follow as a fellow first generation, millennial Filipina American. She is breaking up the traditional “hella male, hella pale” finance world and curating conversations with women from all kinds of backgrounds to have realistic, practical, and fun discussions on a variety of finance topics. I just joined her Hella Helpful membership, and there’s already such candid discussion about SOOOO many different topics – money wins, accountability threads, financial injustice, budgeting, and tips and tricks from all members trying to get everybody on a better trajectory! Find yourself a community of finance minded people – end of story.
2. Check your annual mileage number on your car insurance policy.
Do you get your 6 month renewal letter from your insurance company in the mail and skip over the letter to go straight to the bill, just to make sure your numbers are good? I did that for the longest time, but when this last letter came in, I noticed that the letter listed “13,000 miles” as my current term and renewal term mileage for the year.
I only paused because the COVID lockdown has drastically reduced my driving and I wondered…how much am I actually driving throughout the year in general? I called my mechanic and got mileage readings from the last two times I visited, and went outside to check my current mileage. I took my current mileage (18,586) and subtracted my odometer reading from a year ago (10,789) to get 7,797 miles/year. It can change every year, yet the previous year was very similar. BUT I’m paying for a policy that’s covering 13,000 miles/year?? NO THANK YOU.
I gave my insurance company a quick call (answered emails while they played the wait music), and they forwarded this estimate to the powers that be. It took about two weeks to get everything changed, and I saved $120 off my annual bill! This is an easy win, but often overlooked because you probably just applied the standard policy and forgot about it like I did. But if you’re planning to have your car for 12 years or more like I did for my last one, that’s $1,440 you’re not spending on extra miles you’re not using!
Apply this to anything on your statements – is there something I’m paying for that I don’t actually need or don’t have to pay that much for? Credit card interest, subscriptions, a phone plan? I was able to extend my last phone’s deal to my current phone with a call saying I would be switching to T-Mobile after 10 years with them if they couldn’t honor the same price. You don’t get what you don’t ask for (politely but firmly)! It may not work every time, but it’s worked for me every time so far.
3. Set up automatic transfers to emergency savings and a retirement account.
This is where that Chapter 5 comes in! I had always resisted automatic transfers because it didn’t feel safe to trust a computer with my money, but I was definitely missing out! I hate admitting that I wasn’t militant about saving in my twenties, but it’s true. It ended up happening when I remembered to move some funds over into emergency savings, but there was definitely no system to it.
On Ramit’s recommendation (and four other independent recommendations from trusted mentors and financial advisor friends), I looked into Ally Bank for online savings. I love that I can break one single savings account into “buckets” for very specific savings goals like emergency savings or a new camera body, and I set up automatic weekly transfers into certain buckets. I can change the amount at any time, but I get emailed weekly, two days before the transfer starts. If you never really see that money, you really don’t miss it, and you learn to operate and budget without it very quickly.
The same principle is true for retirement accounts. Figure out what you can put aside and set that up to be automatically transferred on a set schedule.
4. Open a new checking account for fun funds.
I could never get used to the system of carrying cash in specified envelopes to pay for specific categories. Since I operate so much online, I decided to open a separate new checking account/card where my fun money would live every month, and once it reached $0, that was it.
That first month is a really sobering experience, so I warn you now! If you run out of money in a week, I did that too – you will survive. This practice is really about paying attention to how money is leaving your wallet, and deciding whether you really love whatever it is you’re spending money on, or if you could easily cut it out because it’s a circumstantial purchase. The lockdown has helped clarify a lot of that too since we’re not able to be out all the time spending money like there’s no tomorrow.
5. Expand your services as a small business or freelance on the side.
A lot of the tips above focus on saving, but earning more is just as critical to changing your financial situation. Ramit goes into great detail about this in the book, but I can share what I have been able to do over the last few months to combat not being able to shoot clients as frequently.
My clients are business owners with very different businesses and trajectories. As we all are trying to navigate how to operate in the world right now, small businesses are having to pivot and shift very quickly. I was finding that a lot of my clients were now forced into homeschooling with barely any time to shower, let alone work more to make up for not being able to be around anyone for months.
So, without any formal announcement or change to the website, I started working with business owners who had to quickly move online for the first time or up their online presence with on-brand design elements like webinar presentations, Pinterest graphics, YouTube thumbnails, checklists and templates, just to name a few.
I don’t foresee us falling back and away from how much we’ve been online these past few months. The one thing this experience has forced is the non-negotiable need for online visibility, access, and resources when physical presence is not possible. That opens up so much in terms of freelancing opportunities, and there are plenty of people who need help.
Now I ask you – what skill can you bring to the table right now? Saving will only get you so far, but utilizing a skill that comes naturally to you could be an opportunity to offset lost income and help someone else be better.
Whew what a post! If you stuck around up to this point, thank you! I hope these tips get you thinking and taking action in your finances – your future self will be very happy. If nothing else, start following Ramit and Berna to fill your feed with more finance related topics – it really does start with knowledge!
It’s time to have real talk about how to financially take care of yourself, and I will always share my own experience! I am not a financial advisor, so please take all of this information with a grain of salt – always do your own research! If you want more details or candid money conversations, you can email me at firstname.lastname@example.org or slide into the DMs on my Instagram.