5 Tips to Financial Freedom
How’s your relationship with money lately?
There’s so much going on with the pandemic that it probably has your finances a bit more hard to manage than usual.
Today, I want to share a few things that I hope help you with your finances.
Hey, I’m Darcie, and I’m a financial wellness coach over at Green Bites Project™. I work with women every day on transforming their finances from stressful, not planned, frustrated to feeling in control, spending confidently without guilt, and hitting their biggest financial goals.
Finances are such an essential part of self-care because properly taking care of your money reduces your stress, clears your mind, and yeah, improves your net worth.
We love having money, but then, like a lot of women I work with, it can be frustrating, lead to guilt, be stressful. Or maybe we feel uncertain about what to do. So we procrastinate and get more stressed.
It’s no wonder that our relationship with money is….complicated.
Today, I want a share a few tips on how to approach money in a simple way that will save you time, add to your net worth, and have you feeling better about it.
Tip 1: Mindset for your money
No conversation about money can happen without first chatting about our overall emotions and mindset with money. This is a complex topic.
But here are a few things to encourage you to start wherever you are:
- Approach learning financial literacy in the same way you would if you were learning any other skill and leave the expectation or “shoulds” at the door
- Work on small financial changes at a time to really make them stick
- Your confidence in your finances will grow as you see even the tiniest of wins happen. Keep a list of your financial gains for those days when you feel like you have a setback
What I’d also love for you to know is that the biggest transformations that I’ve seen with the women I work with evolved over time as they mastered budgeting, got more confident, and further educated themselves on the topic of investing. So it’s almost like a caterpillar-to-butterfly process of trial-and-error to figuring out budgeting, seeing debt balances go down, and getting comfortable with savings in order to build wealth.
The result? You find finances fun, you look forward to working on them, you have alignment, and it just changes everything about your mindset.
Tip 2: Get a plan
Forget monthly budgets. Instead, make sure you have a plan for your money each time you get paid. Know how much is going to bills, how much “fun” money you plan to spend until you get paid next (yes, even the fun stuff like dining out, candles, and gifts for your friends), and then try to set a bit aside for savings and unanticipated expenses.
If you have debt, pay minimums on your debts and consider throwing any extra money you have towards your smallest debt just to give yourself a quick win as it will be easiest to pay that off first.
Here’s what happens when you get a plan….you give yourself permission to manage your current expenses, manage your past, yet get yourself on a path for your future.
Remember: the point of budgeting is not to budget, but rather to help you build wealth and optimize the money that you do have.
Tip 3: Today is the best day to start investing
There are so many ways to get started investing. Before I learned about it, it felt like investing was inaccessible or that I needed a ton of money to get started (and then I never started). The truth is that it’s never been easier - even getting in on your employers’ 401k/403b is an amazing way to get started and takes almost no effort.
There are probably many questions that come up when you think of investing, like what to invest in, where to invest, and how to invest. One of my most favorite resources is “The Simple Path to Wealth” by JL Collins. Many of my creative-minded clients loved listening to this audiobook, and he explains in straightforward terms all about types of accounts, what to look for, and good benchmarks, etc. Trust me, this book will help you feel so much more informed with investing.
Tip 4: Get the employer match at work
If you’re eligible for an employer match at work, please make sure you are getting it. Usually, that can mean an extra 2-10% of your income that your employer is putting into your account...totally free!
I know that even 2% of 3% or so of your income as an employer match does not sound enticing.
But think about it this way; if you’re making $50,000 right now, a 2% employer match is $1,000 a year of free money. However, did you know that $1,000 a year will grow to $94k after 30 years, assuming 7% average annual growth….with virtually no work from you! The small stuff does add up.
Already getting the match, or are you a solo business owner? Set an automated reminder in your calendar to bump up your contributions to your retirement plan by one percentage point every 90 days or 180 days. This little trick will likely add hundreds of thousands to your investment portfolio over your lifetime.
For example, so slowly increasing your contributions from 4% to 8% over a couple years, which bumps up your contributions from $2,000 to $4,000 on a $50,000 salary,, this little thing adds an extra $203k to your retirement, assuming 7% growth. If you have more income, the numbers grow exponentially. A percentage increase a year makes a huge difference, ok?
Just remember, start where you can and focus on your progress when it comes to gradually upping your retirement contributions.
Tip 5: Action is the best way to build wealth
The bottom line about finances: action is everything. Make your system of saving + budgeting as easy as possible so it is happening without any hardly any effort from you. Make the phone calls, create a plan, give yourself grace as you figure it out, enroll in that retirement plan….it will all do wonders for getting you to the next level with your finances.
Thank you so much to My Girl Wellness for allowing me to guest blog today! I hope these tips were helpful. Remember that your work on your finances - even something seemingly small - adds up big time. Your financial efforts compound and it’s something your future self will love you for. <3 Darcie at Green Bites Project