Personal Finance

  • 6 Most Profitable Digital Products To Sell Online

    I love selling digital products and I’m glad I finally started selling digital products in 2019 after years of dragging my feet. It has been an incredible and profitable income source in my online business!

    Selling Digital Products

    Selling digital products is a highly profitable way to earn money online while also helping your customers solve a problem and improve their lives. It’s truly a win for everyone.

    Selling digital products is actually my favorite way to make money online (here are the ways I make money online). I sell digital products that make me hundreds of dollars every month and sometimes even thousands in passive income. I love making products once that I can then sell thousands of times.  

    Whether you are a blogger, YouTuber, or online business owner, selling digital products is a great way to earn money online in 2020 and beyond.

    Even if it is not your main revenue it can become a great side income that helps you earn money to pay for items you need.

    Why Should I Sell Digital Products?

    Maybe you are wondering if you should even sell digital products or why digital products are such a great way to earn money online. 

    There are a ton of reasons why you might want to start selling digital products. Here are a few:

    • Passive income – create products once and sell an infinite number
    • No physical inventory to worry about – everything is done online
    • Low start up costs – you can create digital products with free programs
    • Easy to create products – time to create digital products can be low
    • Easy to sell – plenty of avenues to sell your products 
    • Easy to create products for multiple niches & interests

    These are very compelling reasons for why every person wanting to create an income online should be making and selling digital products. It is a fantastic opportunity to create passive income for yourself while also creating useful products for others. 

    How to Sell Digital Products Online

    There are many different ways to sell digital products online and each have their pros and cons. 

    You can sell on sites like Etsy where you don’t own your platform but can reach a huge amount of customers quickly. 

    You can sell on your own website as well which takes more work to setup but you keep more of the money and have more control over your products. 

    First, you will need your own website or at least a domain for selling on your own website. See how to start a website or blog here. 

    Next you will want an e-commerce platform that will allow you to both take payments and deliver your digital products to your customers. There are many different e-commerce platforms that make this possible so let’s look at the best ones for selling digital products specifically.

    Etsy – I love selling on Etsy because you don’t have to find people to buy your digital products – they are already on the platform and Etsy is bringing them to you! It’s easy for beginners to start and Etsy shop and you can get 40 free listings through this link.

    Podia –  Podia is a more robust platform that will allow you to not only sell digital downloads but also offer memberships and online courses. If you have plans to grow a full online business it’s the ideal platform to use to keep everything in one place. Get a 14 day free trial of Podia here

    SendOwl – This platform is specifically designed for selling digital products. You upload the digital products and start selling immediately. This platform is just $9 per month with no additional fees taken our from sales you make. Get a free trial of SendOwl here.   

    Woocommerce – WooCommerce integrates easily with existing WordPress websites to sell digital downloads. WooCommerce is not specifically for digital downloads but they have made the process super simple for sellers and do not take additional fees from sales. I currently use WooCommerce to sell my digital downloads on my website. Get started with WooCommerce.

    How To Determine Profitable Digital Products

    There are tons of digital products you can sell online but if you are looking for maximum profitability from your efforts then you need to think about your end customer.

    If you are aiming for a market of people who don’t have much money then you can’t price your items that high. If you are looking to sell to a group of people that won’t get anything besides personal satisfaction from your product that drops the level of profit for you as well. The customer you are targeting will determine how profitable your item will be.

    You want to look for markets where your future customer is going to gain high rewards from your products therefore they will be willing to spend more which increases your profit.

    The most profitable items help someone earn money or achieve a goal especially if it financially benefits them more. An example of this is selling editable marketing materials to real estate agents. These products are profitable because you can charge more for them because the customer is willing to spend more to save time in creating these materials and will make money in their business from them.

    Next let’s look at some of the most profitable product ideas and examples of each.  

    6 Most Profitable Digital Products To Sell Online

    If you are planning to add digital product sales to your online income streams, then you likely want to make sure you choose the most profitable digital products to sell so your time is used wisely.

    Below are my top picks for the best digital products to sell in 2020 and beyond. 

    1. Ebook templates
    2. Marketing templates
    3. Swipe files
    4. Spreadsheets templates
    5. Online courses
    6. Elements for creators 

    These are incredibly profitable areas of digital products because they are things that help other people make money. Generally people with money or making money are the ones who are willing to spend more. 

    There are dozens if not hundreds of other digital product ideas for things you could sell online, in fact I’ve shared more than 60 digital product ideas you can sell online!

    Regardless of which digital product you decide to sell, your profits for creating a digital product will always be higher than a traditional product because you are creating a product once you can sell again and again.

    Growing A Digital Product Business On Etsy

    Etsy has downsides but it’s also an amazing place to build a business and earn an income.

    If you want to grow a business selling digital downloads on Etsy I recommend my friend Sharon’s Etsy Entrepreneur course where she walks you through the process of setting up an Etsy shop and growing it to make $1,000 a month or more. She grew her Etsy store of digital downloads to more than $1,000 a month and has inspired many people to do the same.

    Remember that your business growth will depend on being consistent and growing over time adding valuable products. For most of us we begin with one product and grow over time building on what works.

    Over time you will learn tips and tricks to grow your digital products shop and find that success can be far beyond you expected when you focus on profitable digital products.

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  • Trying New Budgeting Styles | April Paycheck Budget

    Our April paycheck budget has a ton of new changes because our lives are different now and it felt like a good time to change up the budget as well! We are now trying out a pay yourself first method which we will soon combine with a percentage based style like 80/20 or 50/30/20. I’ll be sharing more about these as we try new stuff out!

    While our lives are so different as we navigate the current financial crisis and global pandemic we’ve adjusted our goals for the year and it felt like a good time to change up how we budget because everything else is different too!

    Our main focus for paying ourselves first is our savings for our emergency fund and building up 3 months of expenses because $1,000 is not an emergency fund.

    Budget With Me!

    In the video you can budget along with me as we cover the budget necessities: bills, fixed expenses, variable expenses, debt payments, and sinking funds.

    This is the first time we have implemented the pay yourself first method where we put all of our goals first and make sure those are covered before anything else. That means savings, investing, and debt repayment comes first in our budget before bills of expenses like food and fun.

    If you are new to watching our budgets, here’s a little run down of our situation! We both work full time, I do freelance work and earn income from my YouTube channel and this is our take home income that I am budgeting. I cover bills, variable spending expenses, sinking funds and the goals for the month. This month we are super focused on increasing our emergency fund which we are trying to cover 3 months of expenses and eventually even more.

    April Paycheck Budget Setup

    During this paycheck our main goal was to continue building our emergency fund.

    April monthly goals:

    • Save $2,000 for our emergency fund
    • Don’t do unnecessary online shopping

    Goals for this paycheck for me were:

    • starting a new type of budget
    • setting up business payments biweekly
    • emergency fund growth

    With that in mind we broke down our April 2020 monthly budget into a more specific way for this paycheck budget.

    April 2020 Monthly Budget

    Here’s the breakdown of the paycheck budget for the first half of April 2020.

    Salary$2,599
    Extra Income$26
    Pennies Not Perfection$400
    Total Income$3,259

    With $3,259 in planned income for the month we broke it down this way.

    Pay Yourself First:

    Emergency Fund$1,130
    Student Loan$220
    Roth IRA$50
    Robinhood$10
    Ellevest$10

    Fixed Expenses:

    Mortgage$600
    Therapy$130
    Netflix$15

    Sinking Funds:

    Phone$50
    Life Insurance$35
    Car Insurance$75
    Car Repairs$50
    House$25
    Christmas$25
    Emergency Fund Extra$45

    Variable Expenses:

    Food$350
    Gas$50
    Medication$30
    Birthday$50
    J Personal$100
    M Personal$50
    Giving$100
    Misc$50
    Buffer in Acct$9

    Paying Yourself First

    Paying ourselves first is super exciting! Let’s be real, it’s fun to save money and invest money once you realize what that money can do for your in the future.

    Paying yourself first isn’t hard it just means prioritizing things like saving, investing, and paying off high interest debt. Paying yourself by doing these things before anything else in your budget is a great way to hit goals.

    We plan to continue trying this style of budgeting and see how it helps us better hit all our many goals!

    Our Emergency Fund Savings

    Because we aren’t playing many different expenses like daycare or going out to eat or going to events or throwing parties (the list goes on) we are able to save a lot more money in our emergency fund!

    We recently determined what we need for our emergency fund to equal 3-6 months of expenses.

    Looking at our monthly expenses and cutting out many things for an emergency situation means we need roughly $3,000 a month for our expenses. This means for a 3 month emergency fund we will need $9,000 saved. For a 6 month emergency fund we will want to stock up $18,000.

    We have a plan for our emergency fund and hopefully things go well and we can save it up with our extra income coming in and big paychecks from the government.

    Now with planning to save $2,000 a month we will also be adding a lot of our regular income to our emergency fund. This means we will be able to save up to $9,000 much quicker than I originally expected.

    This paycheck we were able to save over $1,000 to the emergency fund which moves us even closer to our goals.

    Investing To Hit Goals

    While we are prioritizing savings during this time due to potential job security, we are also continuing to invest small amounts into the market and dollar cost average our investments.

    One of my goals this year is to max out my Roth IRA and because I haven’t started on that goal yet it felt like a good time to get going on that goal.

    I’ve been investing for a long time now and I love investing when markets are going up and when markets are going down. In fact, my shortest time frame investments are for at least 15-16 years from now when I want to use the dividends to help my daughter.

    Because I am not investing money for the short term I don’t worry much about the markets year to year ups and downs because I know that in a long time frame that money will continue to grow. That’s why I’m still investing small amounts even when I have bigger goals to achieve, because I know small amounts I won’t miss now will add up to huge amounts later.

    I’ve talked a bit about the investing platforms I use for different purposes and here are the ones I plan to use this month:

    Because all of thee accounts have different goals and allow me to try out the more popular investing platforms I’m able to try different things and also work toward multiple goals in the far off future.

    Trying New Budgeting Styles

    I don’t call myself a budgeting expert and probably never will because there are too many styles of budgeting. What works for me for a while doesn’t work for me at another time. What works for me may never work for you.

    The thing is that creating a budget and following it during times of uncertainty and times of stability both helps you create a sense of calm and control. And if budgeting doesn’t feel like it’s working for you? Try a different method!

    Some people love budgeting by paycheck. Some people love Dave Ramsey’s method. Some people adore YNAB. Some people do 50/30/20 percentage based budgeting. There really are many styles of budgeting and one size does not fit all!

    I plant to go through a few more styles of budgeting to see if we can improve on what already works for us. I think it is great to take the best bits of advice from various sources and make them work for you. Best practices from others can improve your life very quickly and that includes with budgeting!

    No matter what your goals are, continue with budgeting and using your money wisely and consistently to hit your goals. You don’t have to be perfect with your money but you do need to be consistent!

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  • Is $1,000 Enough For An Emergency Fund?

    Certain financial experts suggest you start bettering your financial life with saving up $1,000, and while that is a good start, most people have expenses far beyond $1,000. But is $1,000 enough for an emergency fund?

    While a starter emergency fund of $1,000 can help many people get started, it’s important to consider whether or not $1,000 is enough for an emergency fund.

    Why do you need an emergency fund?

    Why exactly do you need to keep money in savings for an emergency? Generally when things are going well and income is flowing in most people do not prioritize an emergency fund (myself included!). However, ignoring an emergency fund only ends up hurting you when you finally encounter an emergency.

    An emergency fund is absolutely critical for anyone who wants to be prepared for handling the ups and downs of life. Life is filled with unplanned events and an emergency fund allows you to walk through things that pop up with lots of peace.

    What type of events might be considered an emergency? These are things that come up during a month that you weren’t expecting but are a normal part of life. That includes many things like the following that run close to over over $1,000.

    • Emergency: a dental office visit that ends up costing hundreds up dollars or even up to $1,200 or more for an emergency
    • Emergency: flat tires where you end up needing to replace 1 or even 4 tires that can costs from $400 – $1,000
    • Emergency: medical event where you have to visit the ER which could cost $500 with your deductible and more for ambulance services or follow up appointments

    There are a number of different types of emergencies but many of them cost hundreds of dollars that you likely don’t have included in your current budget. Having one of these expenses pop up could destroy your budget and send you into debt if you do not have an emergency fund.

    If you can’t pay for the emergency expense with your income during the month then you might turn to credit cards or borrowing from friends and family. Either situation increases debt and makes your life harder in the long run. Being able to cover an emergency expense with your emergency fund makes things easier and less stressful.

    An unfortunate fact of life is that “emergencies” do happen and they will happen to you. That is why having an emergency fund is something you must do if you want to maintain your quality of life and go through life without being stressed by each new emergency.

    How Would You Pay For $1,000 Emergency Expense?

    Let’s start at the beginning… Can you afford an emergency expense that is $1,000? As I shared before, many common emergency expenses can be $1,000 or even more. Sadly according to many studies and polls, almost half of American can afford a $1,000 emergency expense but unfortunately that means half can’t cover that unexpected bill.

    Most people who responded to the poll linked above would pay for a $1,000 expense like a cap repair by dipping into savings like an emergency fund.

    Others responded to say they would pay for an emergency expense by using a credit card, taking out a personal loan, or asking family for help to cover the unexpected expense.

    The Federal Reserve has backed up this type of response with survey results that said 61% of Americans said they would pay for an unexpected $400 expense with cash, savings or a credit card. In their poll only 12% said they would not be able to cover it.

    Between savings, credit, and help from family most people at least have an idea of how they would want to cover an unexpected expense.

    Is $1,000 Enough For An Emergency Fund?

    In most cases, $1,000 is not enough for an emergency for most people.

    On average a general emergency for people is more than $1,000 and Bankrate found that the average unexpected expense for survey respondents was about $3,500.

    So what happens when you’ve only saved up $1,000 for emergencies and then you encounter the typical $3,500 emergency? Unfortunately that means you have $2,500 you need to find a way to pay for and many people then turn toward credit cards or worse, payday loans. Those options can be a very high cost solution since the average credit card rate is 17%.

    One thing to remember when thinking about emergencies: they will eventually happen. In any given year probably a quarter or the people you know will need to find a way to pay for a financial emergency.

    So if we know emergencies will happen, those emergencies on average are $3,500, and any given year it might be us that has an emergency, what do we do with this information? We plan to save more than $1,000 in an emergency fund so that we will not have to turn toward high cost solutions to cover emergency expenses.

    When $1,000 Isn’t Enough

    You might want to know some specific situations where $1,000 is enough for you and when it is not.

    When $1,000 is enough for your emergency fund:

    • you are a student and live with family and have very limited expenses
    • you have a very stable income that is guaranteed and multiple sources of that income

    In some cases where you have very low or no expenses or if you have multiple sources of guaranteed income then you may be able to get by with just $1,000 in savings.

    When $1,000 is not enough for your emergency fund:

    • if you have children and are the sole provider for them
    • if you own a home and need to cover any unexpected repairs
    • if you are self-employed or have commission based inconsistent income
    • if you work in an industry prone to layoff
    • if you have chronic health problems and will likely have medical expenses
    • if you have multiple pets especially if older or unhealthy

    As you can see, there are many life situations where there could be a need for more than $1,000 in an emergency fund. If you are more likely to encounter “unexpected” expenses regularly, then you should work to build a larger emergency fund.

    How much should I have in my emergency fund?

    Since we clearly know $1,000 is not enough for an adequate emergency fund, how much do you need to save?

    This exact number of savings you need will vary from person to person and will depend on a few factors.

    Your emergency fund will depend on:

    • your monthly income
    • your monthly expenses
    • the stability of your income
    • your risk tolerance

    You will need to take into account all of those factors to determine how much you want to save up for your emergency fund.

    Let’s say you earn $3,000 a month but your expenses per month are only $2,000. You have a stable job but you are a single person so if you lose your income you will not have a backup plan besides unemployment.

    In this case you would want to save up 6 months of expenses, so 6 x $2,000, or $12,000 would be your emergency fund number.

    If you have a spouse and you both work then you might air on the side of saving up just 3 months of expenses.

    The more unstable your income is the more your will want to save up. If you are a business owner or work on commission then you might want to save up 6 months of expenses or even more in order to feel secure.

    For us we both work so we decided to save up 3 months of expenses. That meant we needed 3 months of $3,000 in expenses, or $9,000. We plan to save up even more eventually but having $9,000 means we feel secure enough to weather most emergencies that come along.

    You will have to look at all of the factors in your unique situation and then decide what makes the most sense for you and what gives you the most peace. Finding the peace of mind number for your situation will depend on both the numbers and how you feel about the numbers. Remember that this is a very personally choice and won’t necessarily match the numbers of other people who may have different factors involved!

    Tips For Saving An Emergency Fund

    Savings can be challenging when you are trying to juggle debt repayment, mortgages or high rents, and lower paying wages than previous generations. However, despite the circumstances we need to be more focused than ever because we know that $1,000 is not enough to cover emergencies.

    If you have struggled to save in the past then saving for emergencies might be something you need to try multiple tactics to achieve. Here are a few ways people have found success in saving consistently to build an emergency fund:

    You can try one or more of these tactics in order to start saving and keep building your emergency fund savings accounts.

    Where To Save Your Emergency Fund

    Where should you save your emergency fund? What’s the best place to keep your savings?

    I personally use and recommend an online savings account with a high interest rate. There are many online bank accounts you can open at placed like Capital One, Ally, or SoFi where you get a high interest on your savings with no fees.

    Reasons I like these types of accounts for your emergency fund:

    • You don’t have account minimums so you can start your emergency fund from the very beginning with just $1 or $5 or whatever you can spare. If you watch my Transfer Tuesday videos then you know $5 of consistent action adds up!
    • They are easy to open and generally very user friendly. These banks are not complicated and they make the process very easy and also don’t charge fees that traditional banks may charge.
    • Online only banks make it more inconvenient to withdraw the whole amount in your emergency fund which means you will be more likely to only use it in a real emergency.
    • You can keep your savings account separate from your regular checking account. If you want you can open an account at one of these banks you don’t normally use so your money is safe and not immediately accessible to put into your checking account.

    Online bank savings accounts are my personal favorite way to save but you can also save in any other savings account. Just make sure there is not a minimum balance requirement in case you need to use all the money and that there are no fees.

    Most savings accounts, even the ones with the highest return will not give you much return for your money. That is totally ok because you are not looking to make this money “work for you” as an investment.

    Your emergency fund is not meant to be an investment. It is meant to be an insurance policy so that it is there when you need it. You should not invest your emergency fund in the stock market since there is no guarantee the money will be there when you need it.

    Remember that whether you are starting with $5 or $500, keep saving your money!

    You may only be able to saving $5 a week but being consistent over time adds up and that consistency is more important than perfection!

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  • How To Spend Your $1,200 Stimulus Check

    Stimulus checks for Americans are set to arrive starting April 9 and coming in waves over the next few weeks. The stimulus update for April 9 is that money should be arriving for people starting today Thursday April 9 or tomorrow Friday April 10 and the coming weeks.

    We are likely getting stimulus checks next week based on what government officials have said in the last couple of days so let’s talk about it! Today I’m going over some of the ways you could and should spend your stimulus money in order to use it wisely as well as share what we are doing with our stimulus money.

    Why Are We Getting Stimulus Checks & Who Gets Them?

    Let’s start with bad news – unemployment numbers are so very bad right now. I know people have been commenting on my videos about being laid off and I’ve been scared I would be as well, but now 10% of the American labor force has filed for unemployment with today’s numbers added in. That’s insane and more than any time in history for initial claims in a short period. 

    A lot of this is situational and hopefully most of these jobs come back and when stuff calms down people go back to work.

    Unfortunately combining this with the fact that most of us in the USA don’t have enough to cover $1,000 emergencies… we are in trouble. But the government is here to the rescue… in a way by hoping to get people through this temporary rough spot and get them spending as well to stimulate the economy.

    they are going to send every adult $1,200 if you made under $75,000 on your most recent tax return from 2019 or 2018. They will be looking at the most recent tax returns from these years. Married couples making under $150,000 will get $2,400.  You also get $500 per child on dependents. 

    So for us as a two income household with one child making under $150,000 we will get $2,900.

    If you qualify for these stimulus checks the government has now said they will start hitting direct deposit accounts starting next week. Considering I filed our taxes this year and got our refund in under two weeks… I believe they will hit our account next week. Things are moving fast and furious because they know we need the money out here.

    How To Spend It, If You Need It

    Since the money is coming soon, today I’m going to talk about ways to spend your stimulus check and share what we plan to do with ours because at a time of high unemployment and lots of uncertainty we need to make sure the money we are getting doesn’t go to waste. 

    Pay to cover your immediate needs. First, if you’ve lost your job and need the money for every day living then definitely pay for the essential necessities in your life. Pay for your food. Buy your medications. Pay for the things you need to actually survive right now. That’s what the money is for and using it for this is smart. Make sure you are healthy and well to get through this. 

    Pay your bills. Again, if you’ve lost your job and don’t know how to pay your rent then you should use this money for bills after you’ve covered the necessities for living. If the money won’t stretch far enough then cover the most essential bills until you get unemployment or a new job income coming in. This is again, for essential bills like covering your rent or utility bill, not paying for your subscriptions or other non necessary bills.

    Save the money. Open a high interest savings account if you don’t already have one and just save it. You can use Capital One, Ally, of SoFi. Open the account and put the money in this account and just let it sit there short term until you need it. If you’ve already started saving, then use the money to build your 3-6 months emergency fund and be more cautious right now. This is personally what we are doing because I do still have job uncertainty if this lasts longer than expected. 

    How To Spend It, If You Don’t Need It

    If you already have your essentials covered and an emergency fund and your job is very secure and this is “bonus” money for you, then congrats! You have a couple options for what to do with it.

    1) Invest in the market. The market is pretty volatile lately and doesn’t necessarily correspond to normal cues but you could go ahead and invest the money. Personally we use index funds and dollar cost averaging for the majority of our investing so I’d go with that method maybe in a Roth IRA but if you are doing this be cautious because none of us know how long this will last or what the market results will be.

    2) Invest in yourself. Spend the money to buy an online course you want to learn. Or spend the money on a certification you have been wanting to get and finally have time to do. If you have 

    3) Give it away. Give the money to a charity you care about. Or heck to people you know need it more than you. Venmo or cash app people money because you know they need it and you care about them. Be a blessing to others.

    I would say that it’s worth playing it safe with this stimulus check. Having more money on hand is the best bet. 

    There may be more rounds of layoffs, there may be more rounds of stimulus checks. Or there may not be. None of us really know yet and anyone saying they know something for sure is just talking with false confidence. Use this money for the best use for your family in whatever way makes the most sense for you. 

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  • How to Build an Emergency Fund

    Having an emergency fund is incredibly important and the roller coaster of this year has proven it to many of us. Currently my number one financial goal is saving up a 3 to 6 months emergency fund.

    We can’t control everything in the world despite our internal desire for control and certainly. Life happens and it can be very unpredictable. The face that people can feel secure and then end up laid off the next week proved that the unexpected can happen. Beyond just job loss, cars will need repairs, medical costs can occur, and any number of unexpected things can happen.

    Having an emergency fund helps you weather those unexpected storms so your financial life does not spiral out of control. When you are facing unexpected expenses you are able to tap into your emergency fund instead of taking on new debt.

    Even if you are already in debt then an emergency fund can be the stepping stone you need to get out of debt because this system prevents you from adding more debt. Emergency funds are important because even if you are living near the end of your means you will have money set aside if things get even worse financially.

    We are still paying off debt but we are prioritizing an emergency fund for just this reason – having money set aside for unexpected events means you won’t have to ever go into debt again.

    So how do you build up an emergency fund?

    Set Your Savings Goal

    If you don’t know how much money you need for your emergency fund then it will be impossible to know when you can feel more secure with your savings.

    Unfortunately the question of “How much should I have in my savings account?” will vary between all of us because an emergency fund needs to be tailored to your individual situation. There is no right answer to the question of “how much should I have in my emergency fund.”

    In general there are a few milestones and goal amounts most of us can use as our individual goals.

    For just beginning you can start with a goal of $1,000. This is often the experts recommendation for a minimum savings and often referred to as a started emergency fund. It is a great place to start when you have never saved before.

    For a more secure emergency fund you should start thinking in terms of “months of expenses” and aim for between 3 to 6 months worth of your expenses.

    Set Savings Milestones To Hit

    For our situation we determined that one month of expenses roughly equalled $3,000 when we cut back all of our extra categories. That meant a 3 month emergency fund for us was $9,000 and a 6 month emergency fund was $18,000.

    These types of numbers can be very daunting when you start saving your emergency fund. It’s easy to feel intimidated by those numbers so I recommend after saving $1,000 you then aim for 1 month of expenses saved first. This is actually the amount I recommend in a “beginner emergency fund” and it is the amount many budgeting systems recommend so you can get one month ahead of your spending.

    After saving up one month of expenses you can then work on adding another and another until you have 3 months of emergency fund savings. Three months of expenses is a great amount to achieve and can make most of us feel much more comfortable.

    Beyond that you can work on moving up to 6 months of expenses saved or even 1 year’s worth of expenses depending on your situation and risk tolerance. You can continue adding amounts to your emergency fund each paycheck until you are at your desired number. Remember that you should always base your numbers on your exact situation!

    Along the way you can track your progress with a visual emergency fund tracker. Once you hit these milestones or mini milestones you set for saving you can give yourself a little bit of a reward!

    If you are just starting out this can all feel daunting, but remember that consistent savings over time will put you in a much more secure position.

    Pick Your Savings Account

    You may wonder what type of savings account you should use for your emergency fund. Some people even ask if they should invest their emergency fund (short answer: no!).

    I personally use and recommend an online savings account with a high interest rate. There are many online bank accounts you can open at placed like Capital One, Ally, or SoFi where you get a high interest on your savings with no fees.

    Reasons I like these types of accounts for your emergency fund:

    • You don’t have account minimums so you can start your emergency fund from the very beginning with just $1 or $5 or whatever you can spare. If you watch my Transfer Tuesday videos then you know $5 of consistent action adds up!
    • They are easy to open and generally very user friendly. These banks are not complicated and they make the process very easy and also don’t charge fees that traditional banks may charge.
    • Online only banks make it more inconvenient to withdraw the whole amount in your emergency fund which means you will be more likely to only use it in a real emergency.
    • You can keep your savings account separate from your regular checking account. If you want you can open an account at one of these banks you don’t normally use so your money is safe and not immediately accessible to put into your checking account.

    Online bank savings accounts are my personal favorite way to save but you can also save in any other savings account. Just make sure there is not a minimum balance requirement in case you need to use all the money and that there are no fees.

    Most savings accounts, even the ones with the highest return will not give you much return for your money. That is totally ok because you are not looking to make this money “work for you” as an investment.

    Your emergency fund is not meant to be an investment. It is meant to be an insurance policy so that it is there when you need it. You should not invest your emergency fund in the stock market since there is no guarantee the money will be there when you need it.

    Add Money Every Paycheck

    Once you’ve got your account setup it’s time to add money! Take a look at your budget and see what money you can set aside for emergency fund savings.

    You can do this a number of ways. Many people like to automate their savings by either setting up an automatic withdrawal from their account or even having your paycheck deposit a certain percentage directly into that savings account. Both of these methods can help you consistently save without ever thinking about it.

    You can also manually move the money every time you get paid. This method can work well for people as well if you enjoy feeling like you’ve done something and made progress.

    So how much should you be saving every paycheck for your emergency fund? That number is totally up to you and what your budget can allow!

    Remember that even if you can only save $5 or $25 that those amounts will add up over time. Your savings amounts can be small but when they are consistent they will add up. Taking action toward your goals consistently will matter more than the amount you choose to start and you can always increase it over time.

    Add Extra Money

    Besides the consistent paycheck savings you’ll contribute to your emergency fund you can also add any extra money you come across.

    So where do you find extra money for emergency fund savings?

    This would include things like bonuses, tax refunds, and any sort of windfall. You can contribute at least a big percentage of any big amount of money to growing your emergency fund.

    It will also include weekly amounts you find within your budget from cutting back or spending less in certain areas. For example some weeks I’ve spent less than my grocery budget by $5 or $8. Instead of rolling that money over, I put it in my emergency fund. I started doing a thing called Transfer Tuesday where every week I moved money over on a Tuesday so I’d have certainty that at least some extra money was going toward my goals each week.

    You can also put any extra money you earn from side hustles into your emergency fund. This “extra” money you earn beyond your normal salary.

    In this step of savings you can also systematically increase the amount you were originally saving from your paycheck. You can increase your savings per paycheck from $25 to $30 for an example.

    Remember that savings can feel like it’s taking forever but the more money you can throw toward your emergency fund the quicker it will go. Stay consistent and over time that money will definitely grow!

    Keep Preparing For Emergencies

    Like I mentioned earlier, unexpected things will happen. So we all need to expect the unexpected to eventually occur. All we can do is to continue preaparing for future emergencies.

    One way of doing this is continuing to save until we have a fully funded six month emergency fund saved up. We never know when uncertain times will hit so saving during good times will provide during hard times.

    Another way of doing this is building a stockpile of important supplies and preparing in physical ways for emergencies that may come along like a natural disaster.

    We can also make a plan for how we will handle emergencies like losing a job. Knowing what to do when you lose your job can make the whole experience less emotional and more of a practical experience where you walk through certain action steps.

    It is impossible to prepare and save for every potential emergency that may come along, but being financially prepared will help you work through emergencies and focus on what matters instead of worrying about your bank account and how you will buy groceries or make your payments.

    If you haven’t already begun saving in your emergency fund, I highly recommend you do so!

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  • What Are Dave Ramsey’s Baby Steps?

    If you’ve ever looked up how to get out of debt then you’ve come Dave Ramsey. He is the author of countless books on personal finance and focuses much of his advice on how to get out of debt fast in order to live a better life. Live like no one else so you can live like no one else, as he often says on his popular radio show.

    I’ve been listening to Dave Ramsey’s radio show podcast every day for months and I’ve even taken his Financial Peace University class with my husband! Along the way we picked up a lot of good advice including learning about the baby steps.

    The Baby Steps To Financial Peace

    So what are the baby steps in Dave Ramsey’s program? Why do they work? Watch the video below for a summary or keep reading!

    There are 7 baby steps to financial freedom in Dave Ramsey’s program. The steps are designed to help you get out of debt forever, save for emergencies, and build wealth.

    Baby Step 1

    Save $1,000 for your starter emergency fund.

    This step is designed to get you off of the roller coaster of using credit in order to float any unexpected expenses that come up in your life.

    Baby Step 2

    Pay off all of your debt using the debt snowball.

    The debt snowball method of paying off debt is where you pay off all your debts from smallest balance to largest balance. It’s designed to help you get wins quickly by eliminating some small debts very quickly.

    Baby Step 3

    Save 3-6 months of expenses in a fully funded emergency fund.

    Saving up an emergency fund is critical to living life without debt. Saving up a funded emergency fund prepares you to handle any emergencies of financial crisis situations that come along like a job loss.

    Baby Step 4

    Invest 15% of your household income into retirement.

    Once you are debt free and prepared for emergencies then it is time to start investing for retirement. This baby step is to help you provide for your future needs in retirement.

    Baby Step 5

    Save for your children’s college fund.

    In baby step 5 you save for your children’s college expenses in the future. Because you will never take on debt again in the future you will need to save to pay for college.

    Baby Step 6

    Pay off your home early.

    Baby Step 6 is all about paying off your home early and living a mortgage free life. Once you pay off your home you free up a lot of your income to use for the final baby step.

    Baby Step 7

    Build wealth and give generously.

    The final baby step is one that will continue for your entire life. You continue saving and building wealth. You also give generously in this step as you earn and build wealth for yourself.

    Those are the 7 baby steps in Dave Ramsey’s program and for many millions of people they have led them out of debt and into a stable and even wealthy position.

    Good & Bad Advice From Dave Ramsey

    Dave Ramsey is a polarizing figure in the personal finance community. People either love him or hate him … or get sued by him.

    Personally I think he has both good and bad advice depending on people’s situations. He is wrong in his opinions just as much as the rest of us are wrong, but his advice has helped more people get out of debt than anyone else.

    Here’s some of the good advice he gives:

    • Paying off all your debt. Being debt free brings peace of mind and getting rid of high interest debt saves you a lot of money.
    • Building up an emergency fund. Having savings for an emergency gives you the chance to survive any number of unexpected events and is a great idea for all people.
    • He encourages a written budget every month. Obviously as a budgeter I love this advice because giving your money a job to do will help you be able to save up and achieve all sorts of financial goals.

    Here are a few of the pieces of advice that aren’t as good that I don’t personally follow:

    • He says stop your retirement contributions until you are out of debt even if you get a 401k match. Personally skipping a 401k match seems insane since you are generally getting that money with no risk and it’s part of your overall compensation package at your job.
    • He says stop using credit cards even if you’re able to use them responsibly. The goal of having no credit is noble but it often makes people struggle with getting a mortgage or even certain jobs. Keeping our cards open and using them sparingly has earned us rewards and kept our credit scores high.
    • He still encourages a $1,000 emergency fund which isn’t enough for most basic emergencies and this number has not changes in decades. At minimum I think a starter fund should at least have $1k per person in the household.
    • He says you should never ever go on a vacation if you are in debt. I disagree as life is short and none of us know what will happen tomorrow. While we have the chance we plan to live our best life while still paying off debt. We also do all of our vacations in cash so we don’t add to our debt.

    It seems like I listen to Dave Ramsey but don’t actually implement all of his advice, just some of it. In fact I often go out of my way to do the opposite of what he teaches because it makes more sense mathematically and for my life.

    Unfortunately because we generally follow his guidelines instead of exactly following them, he would insult us. He’s go on a rant and call us stupid and that’s one thing I really disagree with regarding his style. He routinely insults and is rude to people who don’t follow his advice exactly even if they are successful. This turns a lot of people off his advice and his show, but hopefully they find ways to take the good without the bad.

    Who Is Dave Ramsey?

    dave ramsey personal finance

    Dave Ramsey is a Christian personal finance expert, radio show host, and author. He is the author of the New York Times bestselling books Financial Peace and The Total Money Makeover.

    His radio program, The Dave Ramsey Show, is heard on more than 450 radio stations throughout the U.S. and transmits Ramsey’s inimitable financial advice to millions of listeners each week.

    Overall he has helped millions of people get out of debt and build wealth through his radio show, live events and personal finance books.

    What Is Dave Ramsey Good For?

    Dave Ramsey is great for motivation.

    I listen to Dave Ramsey because he is a great motivator. He has spent years learning how psychology and how to motivate others to take action.

    Listening to his show keeps me committed to accomplishing my financial goals. I might not be paying off debt and saving in the same way he teaches but I am paying off debt and saving. We don’t have to agree on the details on everything to agree on the big things. His show keeps me motivated on the big things like getting rid of debt and building wealth.

    I truly love listening to debt free callers to his show. I love hearing how they’ve paid off so much debt and the ways they have cut down their lifestyles and made sacrifices in order to achieve a big goal. Often they had paid off way more than I’ve paid off! I re-listened to his special show where people who had paid off everything including the house called in and that was super inspirational to me. I want to pay off my house one day.

    Ultimately I love Dave Ramsey’s motivation because I do want to live without any bills. I want that freedom. I want to life life without having debt hanging over me. With no debt comes no risk. When things get bad you don’t have to worry about that debt.

    In conclusion, Dave Ramsey is good for inspiration. And perhaps the occasional idea. At least that’s what he is good for to me!

    Get Inspired By Dave Ramsey

    You can get inspired, motivated, and fired up by Dave Ramsey and his advice in many ways.

     I recommend doing one or all of the following:

    rave ramsey total money makeover

    Whichever way you decide to listen, enjoy! He offers a ton of great info for free on his daily radio show and youtube channel so you never had to pay for the financial advice and motivation if you don’t want to do so.

    Dave Ramsey will definitely inspire you and motivate you to take action to improve your personal finances and your entire life.

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  • 8 Money Moves To Make In Your 20s

    Your 20s are a fantastic decade full of discovery, growth, mistakes, and successes. It’s a wonderful time to explore all that life has to offer but it’s also the best time to build a financial foundation that will set you up for decades to come.

    There are thousands of blog posts and YouTube videos about there about personal finance moves and money musts in your 20s. Most share the same common advice and I agree that it’s generally good advice! I’ve read hundreds of these posts over my decade of being in my 20s so today I am sharing what I think are the best personal finance moves to make by age 30.

    In your 20s you likely are constantly comparing yourself to your peers to see how you stack up. Its the reason why we all love to see lists about what your net worth should be at a certain age or what goals you should hit by 30. While these are just suggestions it’s important to remember that your pace is ok no matter when you hit certain goals. Instead it is best to aim to do the best things you can for yourself during your 20s.

    Create an emergency fund

    Creating an emergency fund sounds like a very adult thing to do and it’s one of the first things you should start working on in your 20s when you are employed.

    Having an emergency fund will allow you to weather potential storms like a layoff or car repair while you handle other financial goals like paying off debt or saving for big expenses.

    You can start with $1,000 in savings and then work toward having 3 to 6 months of expenses saved.

    Read more: How to build an emergency fund

    Create a budget that works

    Giving your money a plan by creating a budget is one of the best moves you can make in your 20s. When you have money coming in you need to direct it toward your goals and expenses in order to continually move ahead.

    Creating a budget allows you to best utilize your income for big goals while still allowing yourself to have a life including guilt free spending (because it’s in your budget to buy those shoes!).

    Finding the right budgeting style for you might take trial and error but don’t throw out all of budgeting just because one style didn’t work for you. Test out one of the most common methods and keep trying til you find what works for you.

    Read more: How to create your first budget

    Plan for big expensive life goals

    During your 20s you will like hit a lot of big but very expensive milestones like planning a wedding, buying your first home, getting a pet, or starting a family.

    There are many expensive lifestyle adjustments that will occur during this because you you’ll want to plan ahead for them. This means creating rough budget estimates and beginning to save in advance so you’ll be able to afford these big things without going into debt.

    Read more: First time home buyer tips

    Save for your retirement

    Yes retiring in 40 years sounds very far away and like there is plenty of time to save. However, the earlier you start saving for retirement the less you have to save overall because of compound interest. You should begin by saving with your 401k at work especially if you get an employer match. Always contribute enough to get the employer match. If you do not have access to a 401k then you should start investing in a Roth IRA. Starting to invest and investing throughout your 20s will significantly set you up for a better future.

    Read: Tips for beginner investors

    Pay off high interest debt

    If you’ve got debt from college then your 20s is the time to pay it back/ If you’ve got other debt like high interest credit cards then you should pay that debt off aggressively. Prioritizing your high interest debt and paying off all debt besides a mortgage can help you setup your next decades for less stress and less payments so your income is able to be used for other things.

    Read more: How to setup a debt snowball

    Increase your credit score

    While some financial experts suggest you don’t have a credit score at all, your score is actually a very important tool for buying a home and even getting certain jobs. If you have student loans then you will have a credit score until it’s paid off so you should work on increasing your credit score in other ways. A higher credit score will allow you to get better interest rates of big debts you’ll need to take on like a future mortgage.

    Resource: Use Credit Karma to check your score for free

    Invest in yourself

    One of the very best investments you can make in your 20s is to invest in yourself. If you have extra discretionary income consider using it to invest in yourself rather than just spending it all.

    Investing in yourself means doing things like continuing education in your career field, taking a course to learn a new skill, or starting a side hustle.

    Investing in yourself will pay off in the long run better than many other things you can do in your 20s. These types of investments can increase your long term earning potential and generally give you a better life.

    Read more: Side hustle ideas for moms

    Learn about personal finance

    Maybe you learned about how to handle money from your parents or a class in high school or maybe you still feel clueless. In either situation you still likely have more to learn about personal finance topics and educating yourself in your 20s is a must do. Whether you listen to fun money minded podcasts, subscribe to budgeting YouTube channels, or read personal finance books like Your Money or Your Life ($9) and Total Money Makeover ($15), it is important to learn about the best ways to handle money.

    Read more: 25 Frugal Tips I’ve Learned From The Debt Fee Community

    Use Your 20s To Build A Foundation

    Those are a few of the best things you can do during your 20s to better your current financial life and set yourself up for an even better future. Your future self will thank you for taking your finances seriously and getting things on the right track before you turned 30.

    Your 20s is a a great time to save and build a strong foundation for the rest of your life. It’s the perfect time to take advantage of a low expense living situation, ability to work a lot, and the power of compounding interest.

    In my opinion the best personal finance move you can make before 30 is to educate yourself about money. Don’t let someone else handle your money without understanding your money and why they are doing the things they are doing. The more you understand and take control of your personal finances, the better your life will be. Education and empowerment in personal finance will completely change your life…. so do it before 30!

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  • April 2020 Monthly Budget

    Our April monthly budget has a ton of new changes because our lives are different now! With trying to navigate the current financial crisis and global pandemic we’ve adjusted our goals for the year and our budget is going to reflects that change.

    Our main focus is savings for our emergency fund and building up 3 months of expenses. We are also planning to celebrate birthdays and investing small amounts for future goals.

    Budget With Me!

    In the video you can budget along with me as we cover the budget necessities: bills, fixed expenses, variable expenses, debt payments, and sinking funds.

    As always I’m planning in my happy planner with the budgeting printables from my Etsy shop.

    If you are new to watching our budgets, here’s a little run down of our situation! We both work full time, I do freelance work and earn income from my YouTube channel and this is our take home income that I am budgeting. I cover bills, variable spending expenses, sinking funds and the goals for the month. This month we are super focused on increasing our emergency fund which we are trying to cover 3 months of expenses and eventually even more.

    April 2020 Monthly Budget Setup

    During this month’s budget preplanning I set our monthly goals and covered the important one time expenses for the month.

    April monthly goals:

    • Save $2,000 for our emergency fund
    • Don’t do unnecessary online shopping

    April one time expenses:

    • Birthdays for all of us: $300
    • Car insurance increase: $122 (sinking fund)
    • Filing for new car tags: $145

    Thankfully we are able to plan for all of these one time expenses and still save for our main goal of the emergency fund because we aren’t paying typical expenses like daycare and fun activities.

    As far as our monthly to do items, we are trying to increase the savings even more by tailoring the to do list to this goal:

    • Earn more money through YouTube and Etsy and freelance work
    • Find free activities to keep my toddler entertained
    • Start potty training to cut diaper spending out

    Hopefully we can at least achieve a few of these to do items!

    April 2020 Monthly Budget

    Here’s the breakdown of the actual budget for April 2020.

    Salary$5,000
    Extra Income$200
    Pennies Not Perfection$800
    Total Income$6,000

    With $6,000 in planned income for the month we broke it down this way:

    Mortgage$1,200
    Utilities$200
    Therapy$260
    Gym$150
    Netflix$15
    529 Plan$25
    Security System$25
    Ellevest$10
    Robinhood$10
    M1 Finance$10
    Roth Ira$10
    New Car Tags$145
    AES Loan Payment$220
    Food$500
    Gas$100
    Jason$200
    Mary$100
    Birthdays$300
    Misc. Spending$50
    Phone Sinking Fund (Mint Mobile)$50
    Car Insurance Sinking Fund$75
    Life Insurance Sinking Fund$35
    Subscribe & Save Sinking Fund$50
    Emergency Fund Sinking Fund$2,260

    Our Emergency Fund Savings

    Because we aren’t playing many different expenses like daycare or going out to eat or going to events or throwing parties (the list goes on) we are able to save a lot more money in our emergency fund!

    We recently determined what we need for our emergency fund to equal 3-6 months of expenses.

    Looking at our monthly expenses and cutting out many things for an emergency situation means we need roughly $3,000 a month for our expenses. This means for a 3 month emergency fund we will need $9,000 saved. For a 6 month emergency fund we will want to stock up $18,000.

    We have a plan for our emergency fund and hopefully things go well and we can save it up with our extra income coming in and big paychecks from the government.

    Now with planning to save $2,000 a month we will also be adding a lot of our regular income to our emergency fund. This means we will be able to save up to $9,000 much quicker than I originally expected.

    Investing Small Amounts

    While we are prioritizing savings during this crazy time, we are also continuing to invest small amounts into the market and dollar cost average our investments.

    I’ve been investing for a long time now and I love investing when markets are going up and when markets are going down. In fact, my shortest time frame investments are for at least 15-16 years from now when I want to use the dividends to help my daughter.

    Because I am not investing money for the short term I don’t worry about the markets year to year ups and downs. I simply add money which will continue to grow. That’s why I’m still investing small amounts even when I have bigger goals to achieve, because I know small amounts I won’t miss now will add up to huge amounts later.

    I’ve talked a bit about the investing platforms I use for different purposes and here are the ones I plan to use this month:

    Because all of thee accounts have different goals and allow me to try out the more popular investing platforms I’m able to try different things and also work toward multiple goals in the far off future.

    Keep On Budgeting

    In times of stress and changes a lot of people think throwing out budgeting is the right choice. In reality, creating a budget and following it during times of uncertainty helps you create a sense of calm and control. You might not be able to control much of the outside world, but you can control your budget!

    Now is the right time to hunker down and do the best things you can for yourself and your specific situation. For us that means saving a lot of our income for our new emergency fund.

    If you’ve lost your job then that might mean making big budget changes and filing for unemployment so you can cover your budget priorities – the four walls of survival.

    If you’re still working and have a secure income then maybe you can increase your investments to fund your future or even find ways to help those around you and use your money to spread joy in a time where it is much needed.

    No matter what your goals are, continue with budgeting and using your money wisely and consistently to hit your goals. You don’t have to be perfect with your money but you do need to be consistent!

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  • How To Create Your First Budget

    Budgeting can feel a lot like guessing and failing in the beginning. 

    You can save yourself time by using worksheets or an app that guides you through the process but the basics of creating your first budget are actually easy. You need to figure out how much money you are bringing in and how much money you are spending.

    For most people you are going to budget your after tax post deduction income. Basically you want to give the money you bring home an assignment so you can better optimize your budget to achieve all of your financial goals.

    So let’s get started creating your first budget.

    Gather Your Budgeting Supplies

    First, gather up all the supplies you’ll need to determine your current expenses and spending. To start your first budget you will need a few different things in order to get organized.

    The supplies you will need to create your first budget includes:

    These are the basic supplies you will need to gather up in order to understand your current spending habits so that you will be able to start your first budget and get on the path to financial success.

    Write Out All Your Monthly Bills

    For the first step, write out all your bills. You can start by brainstorming a list and writing down everything you remember. This list should include everything you pay every month that is a set price like your rent or mortgage, utility bills,

    On first glance relying on memory you may forget some bills. It is very easy to forget about bills that are on autopay or subscription plan. Next you’ll want to give your statements a look and add anything you’ve forgotten, which includes things like subscriptions.

    Next to each bill write the due date or the date you pay it every month. This will help you for the next steps where you are going to plot out your expenses based on when things must be paid.

    Order Your Bills By Calendar & Paycheck

    Now, write out all of those bills in order or on a calendar view. This step is optional but it is very, very helpful especially if you feel like you’ve been living paycheck to paycheck and struggling to find any money during certain times of the month.

    Laying out your bills in a visual format can help you see areas where you can improve. Maybe all of your bills are due at one time of the month so it’s obvious why you are struggling to have anything left over during that paycheck.

    Look at the month and add in where you get paid so you can see where bills are actually falling. The two biggest things you can do with your bill due dates in order to stop living paycheck to paycheck are to change your due dates and to split bigger bills between paychecks. 

    • If all of your bills fall within one paycheck period, call and move some of your bill due dates. This is easy to do with a lot of companies and they will move when your payment is due to earlier or later in the month. Spreading our your bills throughout the month and splitting them between paycheck cycles can be very helpful.
    • Split your big bills between multiple paychecks if possible. For most people your biggest monthly payment is your rent or mortgage. You can split this between two paychecks in order to make it easier to pay and leave you more disposable money one each paycheck. In our case, we were paying our $1,200 mortgage payment all at once but that took up the entirety of one of our paychecks. So we contacted our mortgage company and switched to biweekly payments so now we pay $600 every other week. This is much easier to do and eased a lot of the burden on our budget. You can do this with big bills like rent by putting aside half of the bill payment in savings until the paycheck when it’s ready to be paid. So every paycheck you’ll be saving something toward that bill instead of having to pay it all at once. 

    Categorize Your Previous Spending 

    Once you have gathered up all of your budgeting supplies, it is time to take a look at what you have already been spending every month. This process will be eye opening if you have never done it before. Most people are shocked by how much they spend in certain categories – but it is critical that you take a look at the spending you’ve already been doing!

    For this step you will review your spending over the last three months and group spending into categories. This can take a little bit of time but is absolutely critical knowledge to have.

    The easiest way to do it is to go through your statements and assign each type of spending a highlighter color. Then when you are done highlighting a month into categories, add up all the spending in that category. Doing this for three months gives you a better idea of what you actually spend than just doing it for a month.

    Set Reasonable Goals For Spending

    Now that you know what you were already spending, it is time to add your variable spending to your budget plan. You will look at the categories of spending and set new budget amounts for each one based on reducing your previous spending in a reasonable way.

    Once you have your totals, be realistic about those categories for your first month of budgeting. Don’t try to cut them to the bare bones immediately – that is just a recipe for failing and giving up on budgeting in the first month!

    If you were spending $1,000 on food each month for the last three months, try reducing it by 10% the first month of budgeting and only plan to spend $900. If you spend less than that because you are more aware then great job! However, if you instead only gave yourself $200 for food for the month and ending up spending $500, it would feel like a failure.

    By starting to cut your spending by realistic amounts in the beginning, it will help you make progress instead of feeling like a failure and giving up immediately. Seeing the money you’ve saved from the very beginning will give you a satisfactory win during your first budget months.

    Plan Your Sinking Funds

    Finally, think about your sinking funds and irregular expenses. Everyone has some items they must pay for during the year but don’t happen every month. This includes things like car insurance, car maintenance, yearly vet visits for pets. You can set up sinking funds for a number of categories including these 13 popular sinking funds.

    To plan your sinking funds you will need to figure these out along with the amount you need for each irregular bill or an estimate of unexpected expenses. When you know the full number for an irregular bill you will divide this number by the amount of months or paychecks until you need to pay it.

    As an example, if you want to save $600 for Christmas, divide that by 12 and plan to save $50 a month. If you have to pay $300 in car insurance that is due every 6 months, but you are only 3 months away and get paid twice a month, then divide that $300 by 6 for a total of $50 you need to save each paycheck.

    Do this exercise for each expense you have and then create a sinking fund or separate savings account to store that money until the bill is due and needs to be paid. We do this in our Capital One banking account but there are many other banks that allow this and you can also create one account and keep a spreadsheet of the money you’ve got for each sinking fund.

    Monthly Budget Planner Printable

    Add All Your Expenses Up

    The final step of creating your budget is to list the dollar amount for all of your bills, your expected spending in each variable category and your savings amount for your sinking funds. Now add it all up! This is the amount you’ll need to have in income to cover your expenses.

    If your income exceeds this total number, then great! You’re done and can plan to add the leftover income amount to your financial goals like saving or paying down debt.

    If your income won’t cover this final number then you need to look back at all the numbers and find areas to cut the expenses and spending levels. While you don’t want to be drastic with your first budget, you do need to make cuts in order to cover everything you are going to spend. If you have been living above your means and spending too much each month then this process might be more painful.

    The number one rule of budgeting is to never ever ever ever spend more than you make. If your income is less than your planned expenses then you need to make more changes.

    Track Your Spending

    The last and most important part of budgeting is the one we all tend to gloss over but it is crucial – you must track your spending.

    If you don’t track your spending, how will you know if your budget worked or not? You won’t and being disorganized is what leads a lot of people into tricky debt situations.

    You can track your spending in a number of ways – write it down on pen and paper, keep a spending log, use an app that automatically pulls your bank transactions that you just have to categorize.

    There are many ways to do it but you need to pay attention and keep track of how much you are spending – especially in categories where you tend to overspend. For us that budget category where we overspend is eating out and groceries. These are categories where we have to carefully track what we spend and use cash envelopes to give ourselves a hard stop so we don’t go over budget.

    Create A Prioritized Spending Plan

    One thing to note is that not everyone can budget the same way and this is especially true if you have a variable income. If you have an income based on commission or is otherwise variable then you need to create both a prioritized spending plan and a savings account to even out your income.

    If your income is variable or inconsistent then you can create a priority list for all the things you’d like to do after your bills, expenses, and sinking funds are taken care of with your budget. With inconsistent income you need to cover the must haves first and then each month plan to do as much as you can with what you bring in.

    You should always plan to have your main expenses covered by your lowest / worst case income in a month. When you have a very good month you can cover more of your prioritized list and also add extra income to your savings account that will then be used on months with less income. This can help you adjust to having a roller coaster income and make months less volatile.

    Continue Making Cuts & Adjustments

    After your first budget is made and passes you can then review your budget to see how well you did. Many people don’t do a great job the first month or even the first 3 times or more!

    In fact, we were very bad at budgeting for a long time. It took us about a year to get our budget fine tuned and another year to cut out enough expenses so that our spending was covered by just one income.

    Adjusting your budget over time and continually making cuts to reduce your spending so you can increase savings is a normal part of budgeting. Work on finding ways to be more frugal and new ways to save money that you can implement each month and keep reducing your overall expenses!

    Keep On Budgeting!

    All of these steps will get easier and easier each time you do them. Eventually you will be budgeting without much thought and flying through your financial goals.

    Just remember that the first time you make a budget is the hardest but it’s also the first step to a better, happier, more secure financial life without stress and worry.

    Your future budgets will get better and sometimes even future budgets will be a mess. Budgeting is a continual process where you learn and change and adjust as you go. The two main rules are to always spend less than you make and track where your money goes! Everything else you can adjust to fit how you personally like to do those two things!

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  • Are Gym Memberships Worth The Money?

    For the past 8 months I’ve paid $150 for a gym membership. It’s the most I’ve ever paid for a gym membership and a number of times on my budget videos people have questions whether the gym membership was worth it or if I could get out of it. It’s made me wonder monthly if gym memberships are worth the cost in general.

    Why pay for a gym membership?

    Unfortunately, as most of us get older we start to gain a few pounds or find it’s harder to lose weight than it once was. Now that my friends and I are in our 30s we have to focus more on what we eat and how much we workout. Being active is important to not only our physical health but our mental health as well.

    While being active is very important many wonder why you need to pay for a gym membership when there are plenty of ways to workout for free. If you can do free workouts via YouTube, run through bodyweight exercise or go for a run outside, why would you spend money to achieve fitness?

    For many of us we struggle to workout at home and motivate ourself to be active. There is not an internal drive to be active especially when we view our homes as a sense of calm and relaxation. To achieve the level of fitness we need we must instead seek out an environment that encourages action – hence paying for a gym membership.

    Personally I’ve got to stay active to help with my mental health and dislike working from home. While I do go for walks often I struggle with running and find myself much more active in a group class environment or with a personal trainer at a gym. Since I know my personality and need to stay active this means I need to belong to a gym.

    I’ve had a lot of experience trying to decide if I want to keep my gym membership or let it go to help reduce budget expenses. Ultimately I’ve always decided that the gym membership has been worth it for me, whether I’m paying $10 a month or $150 a month by asking myself a set of questions regarding each membership.

    Questions to answer about the cost of gym membership:

    When trying to determine whether or not your gym membership is worth the cost, you should ask yourself the following questions:

    • How much does your gym membership cost?  Deciding whether or not a gym membership is worth the cost involves look at exactly how much it costs. There are a variety of gym types that cost different amounts. Your local 24/7 basic gym will cost less than a YMCA membership which will cost less than a Crossfit membership. My current gym costs $150 per month but previous gym memberships cost me $10-$25 per month. Whether or not your membership is worth it depends on both the amount it costs and if that cost fits in your budget or not.
    • How often do you use your gym membership? Gyms make money by selling memberships that are never used. This is a well known fact and they depend on it to stay afloat. For every one person in the gym they need to have memberships for 5 more people that never come in. It’s a strange business model but it works and keeps many gyms in business. If you want your membership to be worth the cost then you need to actually get in the gym and use what you pay for. I believe my gym memberships have been worth the cost because I utilize the gym anywhere from 3 to 6 times a week depending on my schedule. There has not been a week where I’ve used it less than 3 times and since I struggle making myself workout at home the gym membership solves my issues because I will actually use it.
    • How convenient is your gym membership? If you use your gym membership regularly then you need to also consider whether the gym is convenient enough for you. Is it close to work or home? Do you have to go out of your way to get there? Even if you use a gym a lot there may be a more convenient option for you that is cheaper. If you have a gym membership that is so convenient it seamlessly fits into your routine then it is likely worth the cost.
    • Do you have the money for a gym membership? This is the most important thing to consider when trying to determine if the cost is worth it. If your gym membership will make it hard for you to get by each month then it is not worth the cost. You shouldn’t have to choose between a gym membership and necessities like food or utilities. If you don’t have the money for luxuries and consider the gym a luxury then you should not have a gym membership. Getting into better shape does not have to cost any money at all. However if it is instead a necessity for you because it is the only way you will stay active then you should try to find a low cost membership that fits in your budget.
    • Will you be stuck in a contract for a long period? Unfortunately gym membership contracts are one of the downsides to joining a gym. You sign up for one year or more in many locations before you are certain that the gym will be the right fit long term. Remember to consider not only if you can afford the gym for the first month but 12 months down the road. Before signing up look into what options you have in case you change your mind or no longer feel the gym fits your needs.

    Those are the things that I think you should consider when trying to decide if a gym membership is worth the cost or not. It’s how I looked at the question and decided my gym membership was in fact worth the cost in most situations.

    Do you actually need a gym?

    So maybe you are considering a gym membership but you are on the fence. You don’t necessarily think you have to have one or you aren’t sure the perks are worth the cost. Do you have to actually belong to a gym to be fit?

    The answer of course, is no! You don’t need a gym membership to be fit at all! In fact, there are plenty of reasons to skip it altogether.

    Reasons why you might want to skip a gym membership:

    • Skipping a gym membership will save you money
    • You won’t have another monthly bill
    • Gyms can get boring over time
    • Working out at home can save time
    • There are a lot of germs in gyms and they aren’t always clean
    • There are many free or lower cost ways to workout without a gym membership

    Here are a few ways to get fit without belonging to a gym:

    • Do YouTube workouts that are put out there for free
    • Join a free local running club that meets weekly (or more) for accountability
    • Buy a bicycle and join a regular cycling meetup to get fit in a group or just bike along on streets or trails
    • Play loud music and dance around by yourself or with your family every day
    • Find ways to be more active naturally like walking more to complete errands
    • Buy a treadmill or elliptical for your home (even one for $2,000 will pay off after just a couple years)
    • Buy home gym equipment you can use to workout with daily

    Having a home gym or being able to workout regularly at home for free comes in handy especially during times when gyms may be closed. You will never lack for a workout during a holiday or when gyms are forced closed by natural disasters or health emergencies.

    Answering the question about whether gyms are worth the money really comes down to your personal situation (like most things in personal finance!). It depends on your situation, your health, your motivation, your budget.

    Whether or not a gym membership will be worth the cost to you is only a question you can answer because there is no right or wrong answer to the question!

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