Money Doesn’t Need to Be Scary

Welcome to your money pep talk. If you were looking for a sign to encourage you to level up your personal or business finances, this is it. For many people, money is a stressful subject. Talking about it can bring up a lot of fear and other emotions. But much of that fear stems from the fact that so many people simply leave their finances shrouded in mystery. Many of us don’t receive good education on finances when we are younger, and when we become adults, we either don’t seek or don’t find the information we need to have healthy finances. One of the main ways to fix this problem is very simple: self-education! Once you start learning about money and start paying attention to your own financial matter, the hardest part is over. You might find a lot of your fear has dissipated!

Thanks to a plethora of resources, self-education doesn’t have to be effort-intensive either. Perhaps you might simply choose a financial podcast and listen to it on your commute (my personal favorite method). Or pick out a book and finish it over the course of a month. All you need to do is pick a resource and carve out a specific chunk of time to absorb the information. Below, I have recommended a couple of my favorite resources for learning about personal and business finance. You can also follow me on Twitter and Facebook, where I regularly post blog posts and podcast episodes that I find especially helpful and inspiring. And since it is my profession, know that you can always schedule a discovery call if you’re curious about my services or need some guidance in your financial education journey!

Business Finance Resources

Don’t Keep Your Day Job is a great podcast hosted by Cathy Heller all about the business side of carving out a creative career.

Profit First, of course! Download the first 5 chapters of the Profit First book here on my site.

Mike Michalowicz also hosts the Profit First Podcast, which is full of insight for business owners looking to get more financially savvy.

Profit Boss Radio by Hilary Hendershott is a great resource on both business and personal finance topics. She focuses on financially empowering women.

Personal Finance Resources

Afford Anything is Paula Pant’s podcast, chock-full of useful personal finance info and advice.

Be Wealthy and Smart by Linda P Jones is a great pick for people who are interested in slightly shorter podcast episodes. She tackles and breaks down simple yet important topics like investing.

At Peace With Money: Money Doesn't Have to be ScaryHer Money Matters is hosted by Jen Hemphill, and also focuses on financially empowering women.

The Automatic Millionaire is one of my favorite books on personal finance. The core philosophy has been central to my retirement planning. If you’re thinking about retirement, it’s a must-read. I sing praises for this book in an article I wrote a while back on automating your finances. Check it out!

I hope you find these helpful and educational. May these resources help you conquer your money fear!

Angela

Image Sources:  Clark Tibbs, Linh Pham

Young and Thrifty: Creating a Spending Plan

How to Create a Spending Plan: At Peace With Money

Creating a spending plan, also sometimes known as a budget, can be a very important tool for getting a handle on your finances no matter where you are in life. In my last Young and Thrifty post, we briefly touched on budgeting as a way to encourage saving habits. Today, I want to look more closely at 3 different types of spending plans. Maybe you’ll find one that works for you! But first, the budgeting basics:

Analyze Your Expenses

The first step to creating almost any spending plan is to analyze your expenses. Figure out what your fixed expenses are, like rent or mortgage payments, transportation costs, food, etc. These types of expenses are things you really need that tend to cost the same amount every month. After you’ve confirmed what your fixed expenses are, you can analyze the rest of your spending habits and determine which of your expenses are flexible, and not as necessary as your fixed necessities.

Once you’ve evaluated your finances in this way, you can start to take charge of your spending using various strategies.

Categories

The most common budgeting strategy is to divide your expenses into specific categories and assigning designated not to exceed amounts for each category. For example: “Food, $200/month, gas, $150/month, etc.” Doing this can help you establish your monthly living expenses and also help you understand how much you spend on each category. If you wish to cut down on your spending in a particular area, this may be a useful strategy for you.

Set Amount for Flexible Expenses

Another strategy that is helpful when you’re really focused on saving is setting aside a set amount of money for all expenses that lie outside of your fixed necessities. When my oldest daughter was setting a budget while saving for her road trip, she set aside $100 a month for all expenses that weren’t fixed necessities. This might be tight for some, but setting an amount in this way is a very simple budgeting tactic that can encourage you to make your spending more intentional.

Rewards

A third tactic that can help you create a spending plan you’ll stick to is to set aside rewards for yourself. For example, if you have $500 to spend on a certain monthly expense, and you manage to only use $480, you can use that extra $20 to reward yourself. This can be applied to your overall monthly expenses or within certain categories. One of my daughters has found this strategy very motivating and usually ends up using her reward money on ice cream.

Resources

There are two digital resources I can recommend for anyone looking to create a spending plan. Mint and You Need A Budget are both digital budgeting software systems that will help you set up and track your monthly budget. From my personal experience, I enjoy Mint, and my family uses their free version. Amber Dugger really appreciates YNAB and uses it with her clients.Creating a Spending Plan: At Peace With Money

Though this article mentions only a few strategies, budgeting and spending plans can be as simple or complex as you need them to be. I encourage you to do more research if you’re interested. I recommend this article from Practical Money Skills and this podcast from Jen Hemphill as two helpful resources. In a later post, I will be putting together a list of some of my favorite resources for financial self-education.

I hope you find these spending strategies useful. Stay thrifty!

Angela

Images:Camille Orgel, Unknown

Young and Thrifty: A Guide to Saving

A Guide to Saving for Young People: At Peace With MoneyRecently I’ve received some questions about financial advice for young people. I think the most important piece of advice I can give is this: save your money. It’s simple, but it can be difficult to get in the saving habit. That’s why I recommend developing a savings plan. There are three parts to a good savings plan: percentage, motivation, and banking.

Savings Percentage

In order to save money, it’s important to decide what portion of your money you want to regularly save. You can decide this in a variety of ways. If you’re in a situation where you don’t need most of your income for fixed expenses, the amount you can save becomes much more flexible. For example, when my younger daughter started working at our local pizza place, she decided she would save her paycheck and spend her tips.

Many sources recommend saving about 10% of your income monthly. If you have a fixed income, this can be calculated easily. With variable income, you can simply tally up what you’ve made and calculate the percentage each month. Use the other 90% of your income to live off of and cover your expenses. 

If you want to make things more  organized or complex, you can work on budgeting out your expenses. I’ll talk about different budgeting strategies in a later post.

Motivation

Having financial goals is important! Make sure you know what you’re saving for. Are you looking to purchase a car? Moving out? A  fund that will enable you to leave your job in case of  sexual harassment or unfair treatment? Having an intention for your savings is important because it helps keep you motivated. The more specific it is, the easier it is to focus on. For example, when my older daughter decided she wanted to take a 3 month road trip, she calculated how much she needed to save, got a job at a shoe store, and the next few months saving almost all of her income. She even lived on her friend’s couch for two months to save on rent. In the end, she saved all the money she needed and then some. That’s the power of motivation! 

Banking

Use a bank that earns you high interest on your savings and doesn’t charge fees. Doing some research to find a good bank will help you figure out where to put your money and watch it grow quickly. You can also read my tips for avoiding bank fees here

Some banks allow you to automatically transfer money to a savings account each month. Setting up that automation can make saving even easier. When you don’t even have to think about it, it’s much more likely to get done. 

A Guide to Saving for Young People: At Peace With MoneySaving is the best piece of financial advice I can give to young people. Getting in the habit of saving your money opens up a lot of choices, something that’s important and helpful in any young person’s life!

This post was written in response to some requests I’ve received for financial advice for young people. To answer these questions, I’ve created a series called Young and Thrifty. Check the tag Young and Thrifty to see other articles in the series. 


Angela

Image Sources: Jeremy Cai,  Sharon McCutcheon