Wednesday night I had the pleasure of guest speaking at a Wellness For Women In Real Estate event in Boston (WWIRE). The organization was created as an alternative to traditional networking, which is typically centered around food and booze. They host fitness-based networking events as well as some co-ed events throughout the year that all focus on one thing – wellness.
The organizers of the event understand how much of a role our personal finances play in our overall well-being; so they thought what better way to network than over a few heart to heart money conversations. So when the WWIRE reached out and asked if I would be interested in speaking, I couldn’t have said “YES” fast enough.
I have to admit, a few years ago I would have never imagined myself talking about my personal finances on a blog let alone to a large audience. Back in the day, money was my number one stressor. Outwardly I was doing well and thriving but inwardly I was drowning in debt with no one to talk to. It wasn’t until I discovered this whole sub-culture and community online of people trying to get out of debt, retire early, and seek financial independence that I knew transforming my situation was possible.
The theme of the presentation was all about being proactive with your finances rather than reactive in order to manage your stress around finances better.
The incredible space I got to present in- Red Thread at the Boston Seaport.
As I was putting together the presentation, I came across some pretty interesting statistics:
- According to a 2017 GoBankingRates survey, 57% of Americans have less $1,000 in their savings accounts.
- CareerBuilder released a report in 2017 claiming as many as 78% of American full-time workers are living from paycheck-to-paycheck.
- A 2015 survey by the American Psychological Association found that money is the leading cause of stress among Americans.
- Average US Household debt consists of 4 things: credit cards, auto loans, student loans, and mortgages. Average American household carries $137,063 in debt.
Just the first two stats alone can make your head spin! The statistics put into perspective the immense amount of stress most working Americans are under at any given moment. In the book I’m currently reading called “Your life or your money,” the author, Vicki Robin says the last taboo topic left in America today is talking about personal finances and I couldn’t agree more.
Nice healthy spread before we dove into the presentation!
We live in an era where it is easier to be basically butt-naked on social media than for us to tell our partners our credit scores. Americans will list everything on their Facebook profile but have a hard time talking to their friends about where they are at financially.
Thankfully though, there are ways to manage the stress that comes with money and it’s all about being proactive with our finances rather than reactive.
Wondering how you can be proactive about your money?
1.) Get on a written budget, regardless if you have $5 to $500,000 in the bank. You need to develop a spending plan (budget) for your money before it hits your account. You do this by:
- Listing out all of your expenses from highest to lowest priority (Housing, Food, Electricity, Car, Entertainment, dining out, etc.).
- Giving every dollar of your paycheck a name by assigning your money to every item on your priority list (your expenses/budget) before your money comes in.
- Sticking with a system that works for you. If you are new to budgeting, this can be kind of tough to figure out what works best and will keep you engaged. Please don’t get discouraged if your budget isn’t working out the first, second, or even twentieth time, it will eventually work itself out.
- Always be looking for ways to fine-tune your budget throughout the month and stay engaged with your money.
If you can do all of the above and stick with a budget long enough, you will eventually break the cycle of living paycheck to paycheck sooner rather than later. The key to being proactive when it comes to your budget is to do it BEFORE the money comes through the door so you can tell it exactly where it needs to go.
2.) Establishing an emergency fund and saving money. You do this by:
- Making saving a PRIORITY and paying yourself first. In my own personal budget, the first line item I take money out for is for saving and then whatever is left over, that is where my budget starts.
- Separating your checking and savings account to make accessing your savings inconvenient. The easier it is to access, the easier and more tempting it will be for you to want to withdrawal. Be proactive by setting up an online account and transferring your money to a place that is hard to get to. Online accounts generally take 2-3 business days to process a request to transfer money from your savings to your checking account.
- Start creating sinking funds for things you know will transpire throughout the year like car maintenance, medical co-pays, holidays, etc. Saving in advance for these events and being proactive about your money will help alleviate your stress.
If you can be proactive about creating a safety net for yourself rather than waiting until a stressful situation happens, you will eventually get to the point where you will not blink an eye at a 1,000 dollar emergency. Strive to break out of the comfort zone you’ve been in, the one where you are just normalizing stressful situation after stressful situation. Life does not have to be lived in a consistent state of stress.
The fabulous organizers and ladies behind WWIRE – Victoria from Fort Point and Katie from Red Thread
3.) Saving for retirement. You do this by:
- Looking into the retirement accounts (401k, 403(b), etc) sponsored by your employer and seeking help from HR when you don’t understand something.
- Once you’re on a written budget and have built up an emergency fund of 3-6 months of expenses, strive to put 15% of your income towards retirement.
- Make saving money a priority and at the top of your list of budget priorities.
4.) Plan for life events before they come. You do this by:
- If you have a family that relies on your income maybe you should consider looking into getting a life insurance policy.
- If you are nearing retirement maybe you should consider long-term care insurance.
- If you have young children and want to help them with college, consider setting up a college savings fund for them now.
- If you have a lot of assets you would like to protect, maybe you should consider putting a will together or looking into a trust.
Being proactive when it comes to life events can literally make or break your family financially. Instead of just striving to get a little ahead, why not be proactive about the tough stuff in order to completely transform your situation instead of settling for good enough?
I closed my presentation with this quote:
“You are always one decision away from a totally different life”
So my question for you – what’s the one decision you’ve been putting off?
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Steph says
Congrats on your speaking engagement! It looks like you ROCKED it!
All these tips are so important. They seem hard at first, but it does really get easier to save, budget, and plan for big events. I’m so glad you’re out there showing other’s how to rock their finances!
Carmen says
Thank you Steph! It was so much fun and you’re right. At first, all of these super simple and basic steps seem incredibly hard but they help alleviate stress over time.