crop woman counting money at modern office table

How to Budget Your Way to Financial Freedom

Posted Leave a commentPosted in Budgeting, Finances
crop woman counting money at modern office table
Photo by Karolina Grabowska on Pexels.com

Reaching financial freedom is a dream shared by many people. You can achieve financial freedom by having enough investments, savings, or even sufficient cash in your pocket so that you can afford necessities for your family and maintain your lifestyle. Even if you retire, you still have enough money coming in, often from investments or passive income. The goal is often peace of mind in your life and ditching the stress of living from paycheck to paycheck. 

Unfortunately, many people cannot easily attain financial freedom because of different factors that hinder their way of living. People are often burdened by credit card debt or loans with high interest rates and no plan to pay them off. They also have difficulties that arise from financial emergencies, increasing debts due to a lack of preparedness. Others plainly have a poor time managing their money in an efficient way.

To successfully budget your finances and pursue financial freedom in a way that you don’t feel that you need money, there are many general tips you can follow, such as:

  • Create a financial plan and stick to it
  • Plan for all expenses in your household, including fixed monthly and variable costs
  • Make sure that your expenses do not exceed your allocated budget
  • Prepare an allocation for emergency purposes
  • Reconsider unnecessary purchases
  • Avoid taking out loans with high interest rates

If you can create a smart budget and stick to it, then financial freedom is right around the corner.

Why Create a Budget?

Creating a budget is essential to getting control of your finances and pursuing financial freedom. However, some people overlook this crucial step because they don’t like feeling restricted in how they spend their money. In reality, a budget gives you the flexibility to spend your money on what’s important to you because you’re planning ahead for those expenses.

After you establish your financial priorities, you can avoid overspending in certain categories. For example, if you need to cut back on eating out to put more money in your emergency fund, you’ll know when you’ve reached your limit for the month to stay on track with your goals. Conversely, you may decide to reduce some entertainment spending so you can afford more expensive groceries.

Here are some of the reasons why you need to create a budget at home:

  • Avoid overspending on things that are not needed most. If you spend money without carefully thinking about where it all goes, then the time comes when you don’t have enough for the things that really matter.
  • Reach your goals faster. Budgeting helps you to prioritize the things that you can’t go without. If you have done proper budgeting, you can focus your money on your house’s essential things. This might be saving more money, working on starting your business, or getting out of debt. The budget that you have created will serve as your plan to track your expenses if you’re spending wisely while pursuing your goals.
  • Save money for emergency purposes. It is a fact that the people who do proper budgeting can save more money than those who do not. If you want to save more money and be more prepared for unexpected events, then you need to prepare a budget plan.
  • Stop worrying about money and provide for the things that make life enjoyable. Although money can’t buy happiness, proper budgeting provides you peace of mind since you don’t need to think about payments or finances. You can let your budget do the work for you. Just allocate your money based on your spending categories and their designated amounts.
  • Become more flexible. You may have to shift financial priorities on short notice. You may have to modify your budget, but you’ll be able to visualize where your money is going and where you can make adjustments. This could be helpful for you, especially if you only have a limited budget at home. It would also help you identify some issues and priorities in life to still have money going into savings at the end of the month.
  • Gain control over your money. If you create and follow a budget, then you can control your money and prevent spending too much. You will spend based on the categories and budget plan that you have created. Thus, you will have an easier time spending your money wisely and appropriately.

These are just some of the reasons why you need to create a budget for you and your household. Developing a budget and following a financial plan helps you reach your financial and life goals and prepare for unexpected expenses and events.

What Is a Zero-Based Budget?

Zero-based budgeting is a type of budgeting strategy wherein every dollar of income is assigned to a category. Your income minus your expenses and savings should equal zero. Typically, this begins from scratch, assessing all of your necessary expenses and then determining how much can go toward various savings and other categories. Zero-based budgeting allows you to be more strategic in approaching money management and ensuring every dollar is hard at work.

Why Use a Zero-Based Budget?

Using a zero-based budget is arguably better than the traditional way of budgeting. In fact, it provides great benefits and advantages to everyone, especially in making decisions for how to distribute your income. It also provides you great control over your finances. You will always know where your money should be going and have greater ease staying aligned with your goals.

  • It gives you proper planning in your money, especially with the leftover money. Using a traditional budgeting method doesn’t leave room to determine what you will do with the extra cash. If you have extra cash left in your budget, you may decide whether to purchase something outside of your priorities. The concept of zero-based budgeting helps you to build your financial objectives into your budget.
  • It helps you not to overspend. This strategy would help you to overcome overspending. If you think that something is not that important, then you probably don’t need to invest in that product. You will think that it’s not worth buying it since you stick to your budget plan.
  • It breaks the cycle on living paycheck-to-paycheck. This kind of budgeting approach is according to the money that you have earned. Since your income minus expenses will always equal zero, you won’t have to worry about not having enough money to pay your bills. It will also ensure that the money you have leftover is being utilized wisely.

How to Create and Use a Zero-Based Budget?

Creating a zero-based budget is as simple as identifying your monthly income and splitting it up into expenses and savings.

  1. Identify the average amount you earn each month. (Consider adding a side hustle or doing under the table jobs to boost your income.)
  2. Determine your fixed monthly expenses and savings.
  3. Distribute any leftover money to additional spending or savings categories based on your individual financial goals.

If you find that you have additional money that’s not assigned to a category at the end of the month, you can determine a specific priority to which all leftover funds will be distributed. Alternatively, if you find yourself short on money, then it would be best to adjust your zero-based budget to reflect that month’s income, so you’re never lacking.

Budgeting Is the Key to Financial Freedom

To become financially stable and achieve financial freedom, it is necessary to prepare a budget plan and follow it every month. Budgeting will be the basis of your financial plan that allows you to identify your goals and actively pursue them. Before you know it, you will be free of money stress and confident in your path to financial freedom.

Samantha Hawrylack
Samantha Hawrylack

Samantha Hawrylack uses her BS in Finance and MBA to help others control their finances through budgeting, saving, investing, side hustles, and travel hacking. Due to following the FIRE Movement’s principles, she was able to quit her high-stress job in the financial services industry in July 2019 to pursue her side hustles. She is now a full-time entrepreneur, freelancing coach, and blogger.

man couple people woman

How to Talk About Money with Your Partner

Posted Leave a commentPosted in Budgeting, Finances
Discussing Finances with Partner
Photo by Mikhail Nilov on Pexels.com

Is there a right way to talk about money with your partner? There certainly is. After all, you don’t want to end up arguing over money. If you can approach the topic of money in the right way, it should be much easier to talk about!

It’s well known that money problems are one of the leading causes of divorce. To help you avoid becoming part of these statistics these tips will help you to find it easier to talk about money with your partner.

Tips For Talking About Money With Your Partner

These tips are easy enough for anyone to follow. Remember, the goal is to build trust with your partner and have honest communication with them about money.

Learn To Compromise

Everyone has their own values when it comes to money. Some people love to spend, spend, spend! Others like to save as much as they can for a rainy day.

If you and your partner share the same values that’s fantastic and will make life more harmonious.

However, problems can arise when your opinions differ. Maybe one day you want to make a large purchase using credit, but your partner is dead set against it as they don’t like taking on more debt. Here is where learning to compromise will make it easier.

There will be times when one of you might have to agree to disagree. Alternatively, you may need to compromise by agreeing to a solution in the middle. For example, you may agree you will use credit for purchases, but only up to an agreed amount. 

Understanding each other’s values and learning to compromise is a great way to build trust with each other around finances.

Don’t Dwell On Stuff

Money is something we all must learn to manage. When we are combining finances with a partner it’s best to discuss how we feel about money openly and honestly.

Sometimes people fail to do this which means over time resentment builds up. Your partner may spend too much, save too little, or just not care about making sure bills are paid on time.

Whatever the problem is if you don’t say anything it will never get better!

Don’t dwell on things until it explodes into an argument. Discuss money daily to make sure you are both in agreement with how it’s being managed.

Be A Team

When you’re in a partnership it means you need to be on the same page when it comes to money and hopefully everything else. One great way to be a successful team is by playing to each other’s strengths.

One of you might be super organized which means they are better at planning the budget and tracking spending. The other partner might be awesome at saving and living frugally. Giving responsibility for each task to the right person is a great way to be a successful team.

This doesn’t mean you aren’t both involved. Make sure you still make decisions together and talk about all options. It’s important you both know what the other is doing!

Don’t Be A Financial Cheater

Financial Cheating
Photo by Anete Lusina on Pexels.com

There may be times you think keeping a purchase a secret is a good idea. Perhaps you think your partner will be angry and you want to avoid an argument.

Recent studies show that more than half of Americans have committed financial infidelity. Financial infidelity includes things like secret spending, hiding debts, and not declaring savings.

You may think you’ve got a good reason to hide the truth from your partner. However, when they find out the truth the relationship could be ended. Even when small amounts are involved that loss of trust can be hard to win back. 

The good news is that if you are following the other steps and regularly talking about money, you shouldn’t need to lie!

How To Talk About Money

Whether your relationship is new or decades-long you may be struggling to bring up the topic of money. It can be difficult if it’s something you’ve argued about in the past.

To start with it’s best to bring up the topic of money when you are both willing to talk about it. Simply ask the question, ‘Hey, would you mind if we chat about money for a bit?’

By putting this simple question out there first your partner should hopefully feel at ease to discuss the topic. This makes things much easier instead of just diving into tough questions without warning. Sometimes your partner may say no – that’s OK. Just let them know it’s a topic you need to talk about soon. 

Of course, if they keep avoiding it, then you may need to decide if that’s a deal-breaker for you and consider ending the relationship.

It’s also advisable to talk about the easy things first. Start by talking about long-term goals. Leave things like tackling debt for when you are both more comfortable.

Finally, some people feel very vulnerable when discussing their finances. It can be especially hard for people that have struggled with debt, mental health, or maybe financial abuse from parents or a previous partner.

Keep this in mind and don’t be judgmental about their past behavior. You are now a team and should be building trust in each other. This means whatever problems there are you will tackle them together going forward. Judging will only upset your partner and possibly cause a relationship break down!

Two Ways To Improve Your Finances

OK, you and your partner now know some awesome ways to better talk about money. If you are struggling with money here a couple of suggestions that might help you improve your situation.

Be Frugal

To live frugally doesn’t mean never spending any money. It simply means you are extremely careful about every cent you spend. Living frugally is a great way to become better off financially, get out of debt, or just live a simpler life.

Frugal living tips include budgeting every cent, saving as much as you can, and using cashback sites to earn some money back. When shopping, always hunt for bargains and try switching to cheaper brands. Many cheaper options are just as good as the big brands!

Don’t forget as part of creating a frugal budget to negotiate all bills and cut out all unnecessary spending. 

Start A Side Hustle

A great way to improve your financial situation is by starting a side hustle. How can you make an extra $1000 a month? The great news is there are lots of ways to make extra money. $1000 extra month is doable with a little effort.

With that extra money, you could pay off debt quicker, build an emergency fund, or simply use it as spending money. Remember, you and your partner should agree about what you are doing with the money!

Blogging, freelancing, driving for Uber, and selling handmade goods on Etsy are just some of the hundreds of things you could do to earn extra money. Have a think about your skills and see if you can use them to start a side hustle.

Maybe you could even do something together!

Next Steps

Now that you’ve read these tips, I hope you feel better about discussing money with your partner. You should be able to talk about money without it turning into an argument if you stick to this advice. 

Chris Panteli
Chris Panteli

Hey, I’m Chris. I have a degree in Business Economics from the University of Liverpool, own a small fast food business and run LifeUpswing.com. I will help you to make money, save money, and think about money in a way that will give you back your freedom.

Financial planning for 2021 – 5 Practical Tips to Protect Your Money

Posted Leave a commentPosted in Budgeting, Finances

The New Year is the perfect time to think about how you can bring positive changes to your financial life. It is time to sit with your family and create a financial map to reach your money goals for 2021.

In this post, we will discuss 5 tips that can help you to protect and improve your financial life.

5 Tips to Improve Your Finances in 2021

After a disastrous 2020, it is time to take care of your financial life.

Here are a few tips to help you improve your finances in 2021.

1. Set your financial goals for 2021: The first tip is to set up specific, achievable, and realistic financial goals for yourself.

Be specific about what you want. For example, your financial goal can be to stop making useless expenses and save money.

But is this specific? No.

What is a specific financial goal?

A specific financial goal is something like this. “I will save a thousand dollars every month.”

When you are determined to save a thousand dollars every month, you know exactly what you have to do. It is a specific, realistic, and attainable goal.

Another example of a realistic and attainable financial goal is contributing $100 to retirement savings accounts every month.

Have you noticed that in both examples, there is a time factor? You are contributing $100 to your retirement savings plans every month. This means that you will have to gather money for the contribution within 30 days.

Do not set vague financial goals as it is hard to devise a plan for achieving them.

2. Create a budget that you can follow: Do you know what the foundation of a healthy financial life is? It is the household budget.

A household budget helps you to track your expenses. It helps you to understand where you are spending money and where you should not spend money. It shows you the areas where you can potentially save money. If you do not know how to create a budget, then you can download a budgeting app on your smartphone.

Read reviews of budgeting apps online and download any one of them to stay on top of your finances.

Make sure you create a simple and realistic budget that you can follow. Avoid making a shoe-string budget that doesn’t give you any breathing space.

3. Pay off as much of your debts as you can: 2020 is gone. You have to think about 2021 now. Last year, you skipped payments on your debts without any trouble. But 2021 is different. You have to think about the best way to reduce credit card debt.

Ways to reduce credit card debt in 2021

You can settle your debts to pay less than what you owe.

You can consolidate your debt to pay back your creditors in easy monthly payment plans.

You can file for bankruptcy if you don’t have enough financial resources to pay off your debts.

4. Build an emergency fund for unforeseen expenses: Several people suffered from a cash crunch in 2020 due to various factors like job loss and pay cuts. Most of them didn’t have an emergency fund. As such, they couldn’t do anything to protect their financial life.

Do not make this mistake in 2020. Save money to build your emergency fund. It will help you to tackle emergency expenses. Usually, financial experts recommend saving 3 to 6 months’ worth of living expenses. However, in the present circumstances, when everything is uncertain, it is best to save 9 to 12 months’ worth of living expenses.

If you do not have an emergency fund, make sure to create one in 2021. Reduce your expenses wherever you can and do side-hustles to generate enough cash to build your emergency fund.

5. Invest to grow your money and secure your future: Forget what happened in 2020. 2021 is a new year, and you should start it fresh. 2020 was financially challenging for everyone. If you received a pay cut in 2020, then you might not have invested your money anywhere. Think about how much you can invest, and where this year will be. Smart investments help you grow your money over time.

If you want to invest in the stock market, find out the companies that are likely to grow in the long run.

Make sure you invest your money in retirement savings plans, especially when you have not made a contribution in 2020. You need to build your nest-egg to secure your financial future.

Final note

Let’s kick-start 2021 with a fresh resolve to build a healthy financial life. Let us avoid making expensive money mistakes and follow the five tips mentioned in this article. If you can do this throughout the year, you can improve your finances and achieve all your goals in 2021.

Best of luck!!!

Aiden White
Aiden White

Aiden White is a financial writer who lives in Dudley, Massachusetts. She started her financial journey in 2016 and has been associated with consolidatecreditcard.org for the last 2 years. Through her writing, she has inspired people to overcome their credit card debt problems and solve their personal finance based queries. Being a debt fighter in her personal life, her goal is to share innovative thoughts and knowledge in the debt communities.

crop man counting dollar banknotes

Second Stimulus Round 15…

Posted Leave a commentPosted in Budgeting, Finances, Investing, Real Estate, Stock Market
crop man counting dollar banknotes
Photo by Karolina Grabowska on Pexels.com

So here we go again… round 15… Yes, being a bit dramatic about it but this entire process took entirely too long. This next round of stimulus checks might not be enough to put a dent into the debt some people may have racked up during the past 8-9 months…

The last stimulus bill was passed March 27th 2020. With the CARES Act expiring at the end of the month, this small amount may be helpful for some. However, as I said in the beginning, this isn’t much help at all.

Related: Will the Stimulus Help
Related: CARES Act – Forbearance or Deferment

So, with all of that said, this post is mostly geared towards those that are still afloat during the pandemic and not behind on bills. It’s unfortunate, but a large majority of Americans will have to dump their entire stimulus check into back owed rent or other debts that have accrued over the last 8-9 months. I do empathize with you all that are still struggling… I am really hopeful that with the COVID-19 vaccine making it’s rounds; we can return to some type of normalcy within a few months…

What should I do?

For those of you that meet the criteria to receive stimulus checks that are up to date on your mortgages, rent, and payments what will you do? You are about to get $600 for yourself and each dependent 17 and under within your household. It’s not much, but for some of you, this may be a good opportunity to start investing. If you are debt free, this might be the right time. If you are not sure if the time is right for you to invest yet, check out my article on the 7 Steps to Financial Freedom or listen to the podcast episode here.

Don’t go crazy and dump everything into penny stocks hoping to hit it big. Be mindful of how you employ this money to work for you. “Free Money” most definitely comes with a price. The more stimulus payments that get issued and bailouts for corporations that happen, the more potential we have for some serious inflation. This is a good time to try and turn that $600 into something a little more.

Maybe look at investing in some REITs, index funds, or ETFs. This can be your opportunity to start building a passive income with dividend payments. It takes a lot of money to be invested before dividends start looking nice, but this can be your start.

If you have been looking to start your own business but didn’t want to cough up a few hundred dollars to start one, maybe this is the beginning. If you are able to invest this money in yourself or your business, then that works too. Maybe it’s a side hustle you’ve been thinking about. Maybe you wanted to open an Etsy shop but didn’t have the materials to do it; now you can buy those materials and get started.

Conclusion

The main takeaway of this post is to NOT use this money to go buy another PS5 or laptop, but to invest it into something that can help you build your wealth. Use this as your initial push rolling into 2021 to make this next year your best one yet. We all know this year was pretty much a wash… However, just because there is craziness in the world, it’s no excuse to not set goals and crush them. I started a podcast this year and it’s been awesome! Let’s roll into 2021 goal oriented and ready to attack it.

Mike Cavaggioni
Mike Cavaggioni

Mike Cavaggioni is an Active Duty Officer in the U.S. Navy, REALTOR-ASSOCIATE®, Real Estate Investor, and Finance Coach located in Honolulu, HI. He is the founder of Average Joe Finances and host of the Average Joe Finances Podcast. Mike is building a community for people to come together to learn and build their wealth.

Debt Consolidation

Posted 1 CommentPosted in Budgeting, Finances, Investing

Debt Consolidation

This is a shorter article, but can hopefully be a very helpful one for those of you seeking out a way to consolidate all your debt. While debt consolidation is not something we would necessarily recommend, we understand that some people can benefit from it. As we have explained in previous posts, our favorite way to get out of debt is by doing the “debt snowball” method. I have personally explained how sometimes I am not the best disciplined when it comes to budgeting, which is why I leave myself some wiggle room. By consolidating your debt into one payment, this can make paying your debt off easier if you do not want to follow a budget. Let’s break it down.

Related: 7 Steps to Financial Freedom
Watch: Average Joe Finances Episode 2

Credit Cards…

If you have several credit cards and loans and can’t seem to get on top of them, a debt consolidation loan might be a good move for you. Many lenders are offering low APR loans to help consolidate debt. I know I kept getting letters in the mail from SoFi. I just kept throwing them out, but one day, decided to open one and see what they had going on.

They were offering me a loan up to $100k with a 6% interest rate. That’s pretty darn good if you ask me. I considered taking it and using it to buy more real estate, but I didn’t. I didn’t want to take on another loan as I was still paying off the most recent kitchen and bathroom remodel (ouch).

Though, it made me think. If I had a lot of debt and didn’t know where to start, this would be a great option. Think about it.  Most credit cards are between 12-22% APR, right? By put all of that debt into the loan, you would save 6-18% of your interest. Of course, there is still some strong discipline required to use this option. If you take out a loan and consolidate all of your credit card debt, you need to have the discipline to NOT TO SWIPE THAT CARD!

What else do they offer?

While looking into SoFi’s loan options, I was able to see the other options they offer. You can open a brokerage account with them to get started investing just like Robinhood and Webull. The interface is pretty easy to use. The offer fractional investing so you can own a piece of Amazon with as little as $5. Pretty neat. If you want to check out investing with SoFi, you can join here.

Related: Our Recommended Products

Bottom line, if you are going to take out a debt consolidation loan, consider all of your options first. Our first recommendation would be to snowball your debt as we talk about here. If you can’t do that, make sure you can secure a loan with a lower interest rate than your debt. This will help you pay it off quicker and save a little more in interest over time.

Check out what SoFi has to offer!

Mike Cavaggioni
Mike Cavaggioni

Mike Cavaggioni is an Active Duty Officer in the U.S. Navy, REALTOR-ASSOCIATE®, Real Estate Investor, and Finance Coach located in Honolulu, HI. He is the founder of Average Joe Finances and host of the Average Joe Finances Podcast. Mike is building a community for people to come together to learn and build their wealth.

Want Financial Freedom? 24 Reasons Why You Need a Financial Coach

Posted 2 CommentsPosted in Budgeting, Finances

Imagine being the boss of your life.
Imagine having no limit on how much money you can make.
Imagine feeling delighted when discussing your finances, instead of feeling sad and depressed.
A financial coach can help you achieve financial freedom.
Just as a doctor improves your physical health, a financial coach can boost your financial health.
In this guide, we’ll discuss the 24 reasons why having a financial coach can be beneficial for you.
But first, we’re going to briefly answer these questions:

  • What is a financial coach?
  • When should you work with a financial coach?
  • What is the difference between a financial coach and a financial advisor?

What is a Financial Coach?

A financial coach improves the money management skills of their clients.
Here is a brief outline of what a financial coach can do for you:

1) Study your spending habits
2) Discuss your financial goals with you
3) Develop a financial plan to accomplish your goals
4) Provide you with the tools and motivation you need to stay consistent
5) Help you work through your emotional money traumas so you can heal from them

Above all, a financial coach’s mission is to teach clients how to have a healthy relationship with money—so that money does not control their lives.
P.T. Barnum once said that “money is a terrible master but an excellent servant.”
After studying your finances, a financial coach will show you how to turn money into your servant.

When Should You Work with a Financial Coach?

Contrary to what some may believe, you don’t need to have millions of dollars to work with a financial coach.
In fact, some of my clients have debts, little to no savings, and imperfect spending habits.
If you’re in debt, a financial coach can help you develop a smart budgeting plan.
Also, if you make a high salary, a financial coach can help you allocate money for savings, investing, and your emergency fund. That way, you and your coach can develop a plan to boost your passive income.
No matter your situation, a financial coach can help.

However, the best time to work with a financial coach is before you need one.
But keep in mind, it’s never too late to hire a financial coach.

What is the Difference Between a Financial Coach and a Financial Advisor?

In general, a financial coach helps clients build a good relationship with money, deals with the emotions and money mindset so they can reach their financial goals effectively while a financial advisor helps clients with investing and wealth building. 
Typically, a financial advisor determines their fees based on a percentage of their client’s assets. While a financial coach usually charges a flat retainer fee or package rates.
Often, a financial advisor won’t work with you if you don’t meet their wealth requirement, while a financial coach will work with you even if you have little to no assets.
A financial coach isn’t licensed to advise you on investing, unlike a financial advisor. But what a coach can provide is the foundation you need to become an investor. Before you consider investing, you must have a healthy relationship with money.
Another major difference between a financial coach and a financial advisor is that a financial coach will not have an ongoing relationship with you. Of course, you can always contact your coach if you have questions or need advice.
But a financial coach’s main objective is to teach you how to become financially literate so you can better handle your finances.
When you hire a financial coach, she will show you how to fish so you can fish for yourself.
Do I want you to pay me to fish for you? Nope!
I’m all about empowering you to become your own financial expert.
So, are you ready to discuss the 24 reasons why you need a financial coach?
Great! Let’s begin. 😊

1) Understand How Emotions Affect Your Relationship with Money

Emotions control much of our behavior.
Often, we make buying decisions based on our feelings.
And the sneaky part is that we’re not even aware of this.
Furthermore, we tend to have an emotional connection to big brands like Mercedes-Benz.
And as you already know, big brand products can hurt your wallet—especially if you’re on a small budget.
That Gucci purse may look stylish, but it can set you back financially.
That Rolex watch may look flashy on your wrist, but it can prevent financial freedom.  
A financial coach can clarify how emotions are affecting your buying patterns.
I can explain to you the dangers of impulse purchasing.

​I can help you see the risks of neglecting your nest egg.
After speaking to you, a financial coach can detail what’s driving your behavior. Because often, it’s hard for us to be unbiased when analyzing ourselves. 

2) Develop the Right Mindset for Financial Growth

In her book Mindset: The New Psychology of Success, Carol Dweck introduced these two concepts: fixed mindset and growth mindset.
A fixed-mindset individual doubts that she’s capable of growth or change, whereas a growth-mindset individual believes she can improve her abilities through hard work and discipline.
Here’s an example showing the difference between the fixed mindset and growth mindset:
A fixed-minded person would say: “I will never be able to control my finances. I’m always going to be broke and in debt.”
A growth-minded person would say: “I may have some debt, but I just need to find a way to control my spending and increase my income. If I can’t figure this out on my own, the smartest thing to do is consult with a financial coach.” 😉
As a financial coach, I would explain why the growth mindset is crucial to your financial success. I would study your situation, learn more about you, and show you how you can benefit from a change of mindset.
Some of the things we would discuss are your spending habits and overall relationship with money.
The key is having the right mindset.
If you’re missing the right mindset, your chances of financial growth are slim.
Without the right mindset, you become your own worst enemy.
As a financial coach, I will teach you how to become your own best ally.

Related: 7 Steps to Financial Freedom

3) Receive Consistent Motivation to Control Your Finances

You may feel that conquering your financial burden is like climbing Mount Everest barefoot.
But a supportive financial coach can motivate you to keep climbing.
How?
By explaining to you that it’s all about taking one step at a time.
Think of it this way:
Boxers need a cornerman (or cornerwoman 😉) to encourage them to keep fighting and let them know they can win. 
Similarly, a financial coach will inspire you to knockout debt and become a financial champion.

4) Develop a Strong Financial Plan for Building Wealth

“When you fail to prepare, you’re preparing to fail.”
Basketball coach John Wooden is one of the many people credited with saying a variation of this quote.
Nonetheless, it’s powerful!
Because when you fail to prepare a solid financial plan, you’re preparing to fail.
A financial coach will help you develop an effective financial plan so you can start building wealth.
Imagine building your dream home.
To save yourself time, you would hire an architect to deliver your vision. An architect would know what’s required to make your dream home stable.
Well, it’s the same process with your financial dreams.
Thus, a financial coach is like an architect for financial planning.

5) Consistent Accountability for Consistent Results

Consistency brings results.
Want to know what the formula for success is?
Read this quote by Jeffrey Fry:
“The formula for success is 2% talent, 8% luck, and 90% of showing up every day.”
The more you show up, the better you naturally get.
And as you consistently show up, you gradually build your abilities.
Therefore, the best financial coaches hold you accountable for showing up. We make sure you’re prioritizing your financial plan.

6) Fix the Root of Financial Problems for Lasting Change

A certified financial coach will help you treat the causes of your money problems.  
When you only treat the symptoms, you’re ignoring the root cause of the condition.
An experienced financial coach will do the following:

  • Analyze your finances
  • Study your mentality
  • Develop a financial plan for you based on analysis

In addition, a savvy financial coach will educate you on the hidden fees that are costing you money—money that you could save or invest.

As a financial coach, I prioritize helping you reach financial freedom. But the first stage is fixing the root causes of your financial problems.
Once we treat the cause, we’ll produce lasting change.

Related: 3 Simple Money Saving Tips

7) Work with a Trusted Personal Confidant with Vast Experience

A financial coach is your personal confidant—someone who actually cares about you and your future. 
As your financial coach, I would create a comfortable environment for you to discuss your finances. A judgment-free environment.
Let me tell you a little about myself:
In 2012, I sold my condo in the Bay Area.
Sounds great, right?
But it wasn’t.
The problem was that it was a short sale.
Unfortunately, I lost out on a lot of equity on a property that’s now worth a lot of money.
When I recall that mistake, does it hurt?
A little.
But I learned from it.
That experience made me stronger, wiser.  
If I had a financial coach back then, I could have been saved from that mistake.
Fast forward years later, my goal is to prevent you from making similar mistakes.
I want to improve your relationship with money and assets.
That’s why I became a financial coach.
I’m on a mission to give you the tools you’ll need to become financially free.
And that’s the type of mentality your financial coach (aka trusted personal confidant) should have.

8) Achieve Greater Happiness from Seeing Results

When you start seeing results from our work, you’ll feel rejuvenated. And the more results you see, the more inspired you’ll become.
But you must always remember that it takes time to see results.
As you honor your financial plan, you’ll start to see your world change.

You’ll feel empowered knowing that you’ve taken control of your personal finances.
When you’re happy, it makes it easier to use the awesome power of positive energy. And with positive energy, you make the journey easier for yourself.
How so?
Because you’ll feel much more encouraged to conquer your financial plan.
But don’t worry, as your financial coach, I’d help you along the way.

9) Discover Creative Solutions for Money Problems

Sometimes a problem requires an outside-the-box solution. Specifically, the type of solution that involves creativity.
Michael Michalko wrote a wonderful article on creativity.
He said that being a genius is not about having a 1600 SAT score. It’s not about being able to speak eight languages before you can walk.
And it’s not about being able to play the piano blindfolded. 😊
It’s about the ability to construct creative ways to solve problems.
Generally, when we face a new problem, we look for solutions that we’ve used for similar problems. 
But that’s not what geniuses do.
They have a different reaction when they face a new problem.
Geniuses ask questions like:

  • “How many different ways can I analyze this problem?”
  • “How can I look at this problem from a different angle?”
  • “If I see this problem through different lenses, can I come up with solutions I would have never thought of?”
  • “How many different ways can I solve this problem?”

By asking these questions, a genius can produce unique solutions to challenging problems. 
 
And how are they able to do this?
 
They force themselves to tap into their creativity. 
 
So, any time you tap into your creativity, you’re tapping into your inner genius. 
 
As your financial coach, I can help you devise creative ways to solve your money problems. I can inspire you to become a financial genius. 

10) Improve Your Financial Habits

As human beings, we’re creatures of habit.
It’s so easy for us to revert back to old, hard-to-shake routines.
When it comes to money, you must have the right habits.
Because the dangerous thing about habits is that sometimes, you might not even know they exist.
A financial coach can point out your financial habits, and provide solutions so you can break the bad habits.
The truth is, we are our habits. We are what we do every day.
As your financial coach, my job is to make sure you develop the habits that lead to financial freedom.

11) Learn Why You Must Escape the Rat Race

The rat race is a suffocating trap.

The more time you spend stuck there, the easier it is to feel like it’s your destiny.
But it does not have to be!
Life is too short to be spending it in misery. You need to be enjoying life.
Before you can escape the rat race, someone needs to tell you it’s possible.
As your financial coach, I would not only tell you, but also show you how. 

Here’s a brief background on me:
At age 20, I immigrated to the United States from the Philippines.
New continent, new country.
It almost felt like a new world.
After being in the states for a few months, my aunt kicked me out of her apartment for not following a 10pm curfew.
I had to find a way to survive. Sink or swim.
To save money, I worked 20 to 40 hours of overtime.
But you know what working all of those hours allowed me to do?
Become a speed typer. A skill that helped me become more time-efficient.
Eventually, I continued my college education—while working full time.
Those were hard times.
I had absolutely no social life. It was work work work …
But I never gave up.
And my reward for not giving up was getting a nice job in the Data Analytics field.
Years later, I shifted to Corporate Finance.
From there, I made one of the best decisions of my life: I became a financial coach.
With hard work, I was able to start and grow my business as a financial coach.
Indeed, following my passion allowed me to quit my corporate job and become my own boss.
I tell you all of this not to brag, but to inspire you, to let you know that if I can escape the rat race, YOU can as well.  

12) Learn to Treat Your Finances as a Business so You can Build Your Wealth

The most effective way to escape the rat race is to treat your finances as you would a business.
You need to track all of your income and expenses just as a corporation tracks its income sheet.
You need to track all your assets and liabilities just as a corporation monitors its balance sheet.
And similar to a corporation, you want to increase your assets and decrease your liabilities.
Realize that you are the CEO of your personal finances.
As a financial coach, I would be there to help you become the type of CEO who maximizes cash flow.
Because that’s how you build wealth.

13) Discover Proven Methods for Financial Stability

Over the years, I have worked with numerous clients.
I have seen what works and what doesn’t for achieving financial stability.
Although each client is unique, you start to see patterns after you’ve worked with many clients. You see key elements that each has in common.
Here are just some of the proven methods for financial stability:

  • Decreasing your debt
  • Increasing your income
  • Controlling your spending habits

The proven methods I just listed are universal.
Unfortunately, there’s a lot of misinformation online.
A certified financial coach will help you separate the myths from the truth.

14) Learn the Importance of Investing and How It Works

A financial coach teaches the value of investing and having your money work for you. 
You want to continually grow your passive income.
But money isn’t the only thing you can invest. Time is another.
When you invest time in becoming more financially literate, you will receive a healthy return based on how committed you are. 
Smart investing stabilizes your long-term financial security.
Indeed, the best financial coaches teach their clients the value of investing time and money prudently.

15) Understand Financial Terms; They’re Less Scary Than You Think

Elite financial coaches eliminate the scariness from financial terms.
Often, when we’re afraid of something, we’re less likely to address it. 

Remember, as a child at night, being afraid that there was someone in your closet or underneath your bed?
And if you heard a tiny creak, you would think there’s some big, frightening monster in your room. Especially if it was pitch dark.
So, you’d call your mom, and she’d turn on the lights and show you that there’s no slimy, hairy creature in your room waiting to pounce on you.
Well, financial terms can have that same effect on you as the bogeyman.
But financial terms don’t always have to be something that causes you to hide under your blanket.
Realize that the financial expert wasn’t always an expert on financial terms.  
So, the great thing about working with a financial coach is that she can help take the mystery out of finances.
An experienced financial coach will show you that there’s nothing to be afraid of when it comes to financial terms. And that you don’t have to feel incompetent if you’re new to finance.  
We all start out as beginners in the world of finance.

16) Learn to Become Your Own Financial Expert

As a financial coach, I want you to become your own financial expert.
I want to give you the tools for you to learn how to think for yourself. When you’re able to think for yourself, you can spot the financial opportunities around you.
When you become a financial expert, it’s like having a special pair of binoculars—you see things others don’t. As a result, you can capitalize on opportunities before they become too crowded.

17) Receive Access to the Right Information that will Help You Grow

Unfortunately, there is a lot of misinformation out there. The type of information that does more harm than good.
Think of it like this:
Imagine having a tomato garden.
The worst thing you can do is feed your garden toxic chemicals. That would prevent your tomatoes from growing and eventually destroy your garden.
You want to feed your garden clean water and fertilizer so it can grow.
Similarly, your mind needs the right information, not toxic information.
A financial coach ensures that you have the right information so you can grow financially.

18) Learn at a Comfortable Pace  

The best financial coaches create a pressure-free environment for their clients.
When you’re comfortable, it’s easier to connect the financial dots.
Indeed, it takes time to adjust your relationship with money.
That’s why I follow the motto: one step at a time.

Each session you have with me will build upon the previous one.
The last thing I would want is for a client to feel like we’re moving too fast.
My goal is to make you feel safe, not discourage you.

19) Create a Budget that’s Best for You

Budget mastery is one of the first steps to achieving personal finance mastery.
Your budget instructs you on how to handle your money. 
Not everyone has the same financial situation. Therefore, a financial coach works with you to develop a budget tailored for you

Related: Budgeting

20) Learn how to Measure and Track Your Results

An experienced financial coach will teach you how to measure and track your results.
Think of it like this:
To improve, a long-distance runner monitors how many miles she ran and how long it took her.
It’s the same with you and your finances. 
When you measure and track, you’re able to see if you’re improving. Furthermore, you enhance your chances of success because you can eliminate what doesn’t work, keep what does, and discover what’s missing.
As you start to see results, you’ll be inspired to stay consistent, so you can see more.

21) Ensure You’re Maximizing Your Employee Benefits

When you’re working for a company, it’s best to take advantage of employee benefits.
One example is the 401(k) plan.
If used properly, the 401(k) plan can help you build your nest egg.
Here’s a brief summary of what to do:
First, you would find out how much your employer is willing to match. Then, you make sure that, at minimum, you match it.
For example, if your employer is willing to match $300 each month. Try to make sure you set aside at least $300 for your 401 (K) plan.
That’s just one example of maximizing your employee benefits.
As your financial coach, we would discuss more examples so you can take advantage of any available opportunity to stabilize your finances.

22) Receive Help with Managing Student Loan Debt

As of 2020, student loan debt is about $1.56 trillion in the U.S.
And it’s only increasing.
According to Forbes, 45 million people have student loan debt.
So, as you can see, that’s a lot of people and a lot of debt.
Like credit card debt, student loan debt can be a drain on your finances.
Before you can pay off any type of debt, you’ll need a strategy.
Based on your situation, a financial coach can help you decide which strategy will work best for you.

23) Understand Cash Flow Management

Cash flow management is crucial to your financial growth. It’s about understanding where your money is coming from and where it’s going.
Ultimately, your goal is to have a positive cash flow each month. That’s your first step to financial freedom. If you don’t take that first step, you won’t be able to get there.
After reviewing your finances, a financial coach can show you how you can become cash flow positive.

24) Learn About Your Retirement Options

As an employee, there are retirement options available to you.
Earlier in this guide, I briefly mentioned the 401 (K) plan.
But there are more options, such as the Roth IRA and a traditional IRA. (A financial coach can explain the differences between the two.)
It’s never too early to learn about your retirement options.
We all want to be able to enjoy retirement—without fear of running out of money and having to return to work.

That’s why I always advocate financial freedom.
When you’re financially free, you can retire on your own terms.

Take Control of Your Destiny
Financial freedom doesn’t have to be this distant dream.
It is achievable.
Early retirement doesn’t have to be a carrot dangling in front of your face.
It is reachable.
A financial coach can guide you towards the future you desire.
Today, we discussed 24 reasons why you need a financial coach.
Yet, I would like to end this guide with one last point:
None of us has the power to change the past.
But we all have the power to control what we do today.
Starting right now, you can lay the groundwork for a brighter future. A brighter financial future.

Christine Teh
Christine Teh

Christine Teh is a personal financial coach from the San Francisco Bay Area. She helps clients from all over the world virtually by helping them build a great relationship with money so they can achieve their financial goals. Feel free to check out her website and follow her on the different social media platforms below.

I am Afraid of Being Laid Off

Posted 6 CommentsPosted in Budgeting, Finances

I am Afraid of Being Laid Off

Someone asked me this recently. This is what I would advise my clients or anyone who come to me with this concern.

First of all, there is no such thing as job security. You can get laid off anytime. Companies always make business decisions like this that you have no control over. 

I’d say focus on what you can control.

Have a strong financial foundation and a strong financial plan to ride through whatever life throws at you.

Be it the market crash or being laid off, you won’t be afraid of them.

What does having a strong foundation mean?

It means you have a strong budget, enough emergency fund, a strong financial portfolio and a strong financial plan for different situations that happen in your life.

What consists of a strong budget?

It means you are always on positive cash flow and you have a handle of your month-to-month expenses and don’t carry any debt like credit cards and personal loans, among other debts except for a mortgage.

How much is enough money to put aside in your emergency fund?

My answer to this is quite unconventional.

I would ask you, how confident are you in your skills that you will get a job and how long will it take you to get another job?

If you say it will only take you a month and if you’re comfortable with having one or two months’ worth of living expenses at a MINIMUM in your savings account, then I’d say that’s your answer.

Why is that?

I think savings is not the best place to park your money if your intention is for growth. Having a lot of money in savings is good if you are currently saving for a house or something big in the near future. But in terms of growth, you’re better off figuring out other places to invest your money on.

Part of having a strong financial plan is also having strong retirement models based on different scenarios.

Before I quit my corporate job, I made sure that it didn’t affect my retirement plan drastically. That gave me the confidence to take the leap while I continue to grow my business. I also help my clients build different retirement models based on their goals and how they envision their retirement to be. 

Bottom line is, don’t be afraid of uncontrollable events like being laid off.

Take control of your finances and you won’t be. This concept applies to the fear of the market crash as well.

What common fears do you have regarding being laid off? I’ll be glad to give some tips if you have any questions in the comments below.👇

Christine Teh
Christine Teh

Christine Teh is a personal financial coach from the San Francisco Bay Area. She helps clients from all over the world virtually by helping them build a great relationship with money so they can achieve their financial goals. Feel free to check out her website and follow her on the different social media platforms below.

3 Simple Money Saving Tips

Posted 6 CommentsPosted in Budgeting, Finances

Sometimes we spend money without even thinking about it. In the society we live in today, it’s very easy to just swipe your debit or credit card when making a purchase. No one really carries money around anymore, do they? However, it’s been proven time and time again that if you physically paid with cash each transaction, you would spend less. This has to do with the psychology behind it. You are physically handing your money over and watching it go into the register. However, when we swipe our credit or debit cards, it’s less personal and more transactional. When you apply more thought to your spending and what you are spending it on, you tend to spend less.

As we all continue on our journey towards financial independence, there are some simple and effective ways you can save more money. We are looking at this from the perspective of the everyday 9-5 blue collar employee and basing it off of 253 workdays in the year.

Let’s discuss three simple tips that you can use to save a significant amount of money each year.

Related: 7 Steps to Financial Freedom

1. BUYING LUNCH AT WORK

Heresy, I know… But seriously… people do not realize just how much they spend when they go out to eat. I happen to personally know a HUGE offender of this… Yeah, it’s me… Let’s go over some numbers, shall we?

The average cost of eating out for lunch can range between $9-$12 a day (even more here in Hawaii ). If you are eating out for lunch when you go to work, you are spending $2,277-$3,036 a year.

Consider making your own lunch. Maybe meal prep or make a little extra dinner to bring in the left overs. I am with you all on this one. I need to get better at this!

2. DO NOT BUY COFFEE EVERYDAY

Now, I am not saying to give up coffee… because if we all did that, the world itself may cease to function. I happen to love coffee. I absolutely refuse to buy coffee out in town unless I have to or I am meeting up with people for coffee. However, I personally know people who get their daily fix of Starbucks. They say that they cannot live without… Well, then they are living without $620-$1,860 a year. This is based off of regular drip coffee sizes “Tall” costing $1.85 per cup, “Grande” $2.10 per cup, and “Venti” $2.45 per cup. Let’s not even talk about the $5+specialty drinks and lattes… They are costing you $1265 per year! Even going to 7-11 or WaWa and getting their $1 coffee is costing you $253-$759 per year. These amounts may not seem like much, but think about this… A whole pot of coffee costs approximately 70 cents to make… That’s 8 cups of coffee for 70 cents. That’s some easy savings right there.

Food for thought – 1/3 of American’s spend more money on coffee than they put into savings according to Acorns.

3. EATING OUT FOR DINNER

This is the big one! I get it, making dinner every day can be tedious. However, if you looked at the numbers on going out to eat, it may sway your way of thinking. Let’s say you and significant other like to go out and have a nice date night once a week. The average cost of dinner for two is around $50. If you do this every week, you are spending $2,600 a year. Double this to $5,200 for a family of four! If a family of four ate out once a month instead of once a week, you can save $4,000. Even if you didn’t want to invest the money, there’s your next family vacation.

Conclusion

These 3 simple tips can go a long way. Putting all of these together, we can save a little over $10,000. If you saved $10,000 and invested it into index funds averaging just 7% each year (Around $833.33 per month), in 10 years, you would have $157,835.44. In 20 years, it would be $488, 650.13

We really hope that some of you can benefit from making these small changes in your spending habits. More great options can be found in our article about 7 Steps to Financial Freedom.

Mike Cavaggioni
Mike Cavaggioni

Mike Cavaggioni is an Active Duty Officer in the U.S. Navy, REALTOR-ASSOCIATE®, Real Estate Investor, and Finance Coach located in Honolulu, HI. He is the founder of Average Joe Finances and host of the Average Joe Finances Podcast. Mike is building a community for people to come together to learn and build their wealth.

The Biggest Financial Mistake I’ve Made

Posted 3 CommentsPosted in Budgeting, Finances, Investing, Real Estate

My biggest financial mistake was when I short-sold my condo here in the Bay Area when housing prices were at their lowest in 2012.

I bought the condo at the peak of the bubble in 2006. When the housing market tanked, a lot of people were walking away from their homes. And this freaked me out into thinking that was the smartest thing to do as well. 

But I wanted to do it the “right” way, so I short-sold my property instead of just walking away like a lot of people did. 

I didn’t really have anyone to talk to about my financial situation at that time. The realtor who was helping me was mostly interested in selling the property because he was representing me and the buyer as well.

I remember that I had some friends who told me not to do it, but scared and stubborn young me back then decided to proceed with it anyway. 

I really wished I had a financial coach who could have guided and coached me through the pros and cons of short selling the property. I offer one-off coaching session for quick questions like this now since I have gotten similar questions like “should I sell my property or not?”

If I were to coach my younger self now, I would definitely be telling her to hang in there.

I’d first tell her, she wouldn’t lose any money unless she actually sells the property, and secondly, it’s Silicon Valley. If there is anywhere you would want to own real estate, this is one of the best locations to own one. 

Whoever bought my condo ended up doing really well. Not only are they making good money from the rental from paying down the house in cash, but the value of the property is already back up to the original high price I paid for it.

This definitely served as one of the main inspirations that got me into financial coaching so I can also help people in this type of situation.

So what was the biggest financial mistake you have made and what would your present self tell your younger self now?

Christine Teh
Christine Teh

Christine Teh is a personal financial coach from the San Francisco Bay Area. She helps clients from all over the world virtually by helping them build a great relationship with money so they can achieve their financial goals. Feel free to check out her website and follow her on the different social media platforms below.

Side Hustles

Posted 1 CommentPosted in Budgeting, Finances

So, you want to make some more money and work from home?  Well, there are many people who will try to sell you different ways to make money online without working.  They sell this dream of passive income, making millions of dollars online.  While it IS possible to make a good amount of money online, it is also important to understand that it takes WORK (hence the term HUSTLE).  There are many different “side hustles” out there, so, choose ones that work.  Here are a few “side hustles” that I have done… some worked, others not so much:

I designed some T-shirts to sell online with Teespring… that didn’t really work out.  However, it cost me nothing to make and what the heck, if you want one, check them out here https://teespring.com/lifting-is-fun or https://teespring.com/plant-powered-fitness (They are vegetarian and fitness based)  I opened a Shopify Store and it was actually doing quite well.  I was making an additional $1,500-$2,500 a month, but I couldn’t keep up with the orders and inventory due to my day job (thanks Navy).  I tried to show my wife how to do it, but she didn’t have the time either (thanks homeschooling).  It’s all good though.

Now, I focus on investing my money in my retirement accounts and my other portfolios to have my money make more money.  I do enjoy watching it grow and enjoy collecting my Real Estate Investment Trust (REIT) dividends.  I am hoping that one day this blog will generate another small income that I will use towards other investments.

Other “side hustles” that word is affiliate marketing and even writing online.  It doesn’t necessarily have to be a blog like this.  There are other websites you can write for or even write blog posts for blogs owned by someone else.  Some bloggers will pay for someone to write an article for them.  Writing To Wealth is one that I am looking into now.  You can sign up here: http://bit.ly/2L4DGoZ and start browsing 1,000s of writing jobs.  If you can dedicate one hour per week, you can make some decent money.  Fivrr is a great way to do some work online by offering “gigs” for sale.  You can check them out here http://bit.ly/2NBPUrf and make an account.

Another “side hustle” is one I just did above.  That’s called affiliate marketing.  With affiliate marketing, you basically promote someone else’s already made product and get a commission when someone makes a purchase off of the link you provided.  It can be time consuming depending on how much you want to make, however, it’s a method that works.

If you are just looking for another job either from home or at a physical location, it is important that your resume is strong.  Having a LinkedIn profile is a great start and can even generate a free resume for you to use as a start.  If you want to make that resume pop to get more calls for interview, you need to have a good cover page.  Here is another affiliate link you can check out that can help you with this cover page.  http://bit.ly/2JgMshx

There are so many more “side hustles” out there that are legit and can make you some decent money.  It’s important that you put forth the effort to make those “side hustles” work.  That means you need to work.  If something seems too good to be true, it probably is…  I hope this post was helpful and that you were able to get a little something to take away from this.  Thank you for continuing on this journey with me.

Mike Cavaggioni
Mike Cavaggioni

Mike Cavaggioni is an Active Duty Officer in the U.S. Navy, REALTOR-ASSOCIATE®, Real Estate Investor, and Finance Coach located in Honolulu, HI. He is the founder of Average Joe Finances and host of the Average Joe Finances Podcast. Mike is building a community for people to come together to learn and build their wealth.