How do I become Financially Secure?
Financial Security and Stability has been over-explained in my opinion. But let me tell you a secret: It’s not that hard! Yes, contrary to popular belief, you can end up in the green instead of the red by a matter of 1. Being aware, and 2. Changing your environment. Being strong-willed and disciplined is not necessary. I am all about practical advice. No fluff here! As long as you follow these steps, I can guarantee you will be better off than you were! Let’s kick it off, shall we?
1. Ditch Worthless Subscriptions
We are Still Paying for What??
Netflix, Hulu, ESPN+, Amazon Prime, Movie Theaters, Spotify, Cable, Blue Apron, Amusement Parks, Museums, you name it!
Did you know subscriptions are much more effective than individual purchases? How much more effective you ask? This much. You might have personally seen more and more companies want to sign you up for their subscription-based service. DON’T FALL FOR IT!! When you get a “Free Trial” or a “Discounted Price”, this really means that you will certainly forget about it. And YOU are the one footing the bill.
My Advice? Ditch as many subscriptions as you can. Make it difficult for them to get to your hard-earned money. If you want something, pay the one-time amount. Live with knowing that they won’t get the best of you anymore. Sneaky little badgers!
I do realize it sounds a bit hypocritical, but I do subscribe to a few services that I really value. I also set my monthly bills on Auto-Pay. So, please use your discretion as to what you value, and reserve subscriptions for true value.
2. Separate Your Paycheck
Financial Security at Work
You might look at this and say, “Isn’t my paycheck divided enough into taxes and social security?”. However, in this case we want to make your savings more difficult to access. If you roughly put 80% of your paycheck into your Checking Account, you can pay your monthly bills and expenses with this. Now, the remaining 20% of your paycheck will go into your Savings Account. Done!
Ask your HR manager to see if you are able to split it using their payment processing software. I know that ADP does this under the “Direct Deposit” link. If yours doesn’t, don’t worry. Simply schedule your bank account to send the 20% of your paycheck from your Checking Account to your Savings Account every pay period. Yay, no more accidental overspending!
3. Move to a High Interest Savings Account
Because Inflation Sucks!
Right now, this very second, banks are running a scam! They are making money off of your money in YOUR savings account. Way more than you get in interest! So why should you settle? Let them know what you think. Give them a piece of your mind! Take your money and find a High Interest Savings Account that suits your needs. Make your Money work for YOU!
Take a look at these rates. Can you believe some banks still get away with only give you 0.01% interest? That’s utterly ridiculous! You can get around 1.00% APY with some High Interest Savings Accounts (this fluctuates based on throughout the year). And it stays pretty high. However, with US Dollar inflation at 2-3% on average per year (How could they?!), which means you are still losing value with your 1.00% APY interest rate! You might want to try for a more aggressive approach in the next step towards Financial Security.
4. Diversify Your Money
Because Inflation REALLY Sucks!
Now hear me out. I promise I have done my homework. Aside from Gold and Real Estate, I believe the next best (and probably better) investment is Bitcoin. “That is nonsense, it’s made up and will never last” you say? Then tell me, what is money? A group of people come together and decide that these sets of papers and coins are going to be our method of exchange?
Welcome to the Internet’s official native currency! A Global Currency Reset is taking place, and the ones left behind will be holding their corrupt nation’s currency. Some countries have incredible inflation, practically overnight! Sometimes more than 53,798,500% inflated!!! Where does this leave poor and even average families? They are scrambling to find ends meet when they previously thought that their lifestyle was completely sustainable. Even Belarus is experiencing Bitcoin as a possible solution within their corrupt government.
So, what is Bitcoin? See my explanation here. Where do I get it? Also here. And I know that the whole world hasn’t totally shifted to accepting it as payment, but you should consider keeping 5% or more of your total savings in Bitcoin. It is currently worth around $10.5k currently, and was the best performing asset of the past decade! Who knows, maybe soon we will see it be $500,000… Now THAT’s Financial Security!!
5. Simplify Your Shopping
That was easy!
Another idea to keep finances consistent is to use a shopping app. Wait, what?! You heard me. But in this case, use an app for Kroger or Walmart groceries. The apps give you the ability to creating shopping lists. The key of this tip is to find items that you can buy on a routine basis. This can prevent you from making an extra trip to the store, as well as keep you from getting those extra few bags of munchies that you don’t really need!
So go ahead, it may take a few times to get it right. But that’s okay, you’ve got time. If you can schedule to order it every 2 weeks or every month, it will make life that much easier! And you decide if it is worth your time to go to the store to pick-up (hey, time has value too!). You are already saving time by somebody else shopping for you in the store. But you can also get them delivered. You decide. There may be a $5-$10 fee at some grocery stores, but I find that you will probably save that just from the junk food you probably would’ve gotten.
6. Buy, Rent, or Renovate?
Welcome to My House
The Wall Street Journal came out with this cool calculator (nerd!) a few years ago. And typically you think that if you buy a house then you at least get something out of it when you sell it, right? WRONG! Commission and fees are sky high, typically 6%! This means you can’t just hop from house to house every year. You need to commit! So there is definitely more freedom in renting.
Basically you have to stay in the same house for so many years for buying to even become worth it. That along with the right price point. But no matter where you look, home and rent prices are going through the roof. YIKES! Granted, for the time being, mortgage rates have gone down. But home prices haven’t budged. The demand has gone up, which drives up the price.
Consider the path that works for you. And if you are thinking about renovating, you might consider flat out moving. Because renovation costs can certainly get out of hand. Did you know a single bathroom remodel can cost anywhere from $5k to $15k?! Ouch. And one more thing, there are tons of maintenance that comes with being a homeowner. So, choose wisely.
7. Prepare for the Worst
Where’s my Inheritance?
Let me tell you, I have thought long and hard about if I were to die. Could my wife or family get to my financial accounts if I wasn’t around anymore? Do they know my usual password? Do they know where I keep my list of other passwords? Well, if not, then LastPass is your solution!
LastPass is made for circumstances just like this! You would only need to give a spouse/friend/family the Master Password. LastPass will store all of your passwords for your financial accounts. Death affects 10 out of 10 people! So keep your accounts accessible! Our digital world is becoming even more digital.
PRO TIP: Have LastPass generate a string of random characters to update your passwords to make it harder to hack!
PRO TIP #2: Use Two-Factor Authentication (2FA) to require a login + code from your phone in order to access your accounts.
8. Find Low Cost, Enjoyable Hobbies
It should be no secret that the best things in life are FREE. Okay, technically nothing is REALLY free, but you can get pretty close. My favorite cheap hobby is to go play Disc Golf. Aside from the 3 discs that you need to play, you can find lost discs on courses across America. I’ve found several. Furthermore, the courses are usually at public parks for free.
Some other ideas of this would include walking, running, hiking, playing catch, writing stories, cooking (see tip # 5), read/listen books (get Libby for free if you have a library card), etc. This practice will keep you from filling time via shopping, going to the movies, eating out, and paying for more video games and movies. Also, find some friends! There are tons of groups online that you can have conversations with. Better yet, have conversations with real people (you know…after COVID wears off).
9. Be Honest
With Yourself and Others
Unlike me, you might have a lot of friends who like to go out and do fun stuff. During college it was hard because I didn’t like to spend money. So when I went places, I typically didn’t buy anything. But I still liked hanging out with friends. Who doesn’t? Anyways, my tip here is to just be honest with your friends, families, and coworkers. If you don’t value getting a $5 coffee, then tell them! I myself don’t drink coffee, especially $5 coffee. #firstworldproblems
And take it from me, don’t waste your time in relationships that you know won’t last. Spending money on things you don’t like, just to impress people you don’t like is just silly! Personally? I value spending money on good quality items that I will use and enjoy. Ignore the rest. See? I told you this would be simple.
PRO TIP: Practice honesty in the mirror. I promise it will look good on you!– MAK
10. Invest in Value
Whether it be in the stock market, buying a car, saving for college, self-care, or whatever, make sure you know its value. You might have trouble discerning how much you value something at first. That’s okay. The best teacher is often experience! This means that the faster you fail at something, the quicker you learn how to get better at it. But let me give you a few tips to start out.
Over time, a car will naturally start to break down and depreciate in value. However, it provides you value by transporting you to your job and other activities. But you can at least consider using alternative transportation like Ubers and food/grocery delivery. I won’t break down any of the numbers, but when owning a car, you pay on the car in addition to its inspection, registration, oil changes, tire replacement, gas, etc. Many things can go wrong with a car. And you will potentially have to pay more for maintenance than the car itself.
Self driving Ubers come quickly and save us all!!!
I also have mixed feelings about college as I have 2 children to plan for. Online learning is growing like crazy, and I am convinced certifications will increase in demand. This will mean you need to be more focused on a niche instead of needing a broad (and in my opinion, worthless) college degree in the future. But for now, most companies (but not all) like to see those college degrees! As a programmer, I am a fan of PluralSight! I will definitely use it one day for my kids’ education.
You have heard it said to just put your money in an index fund and forget about it. Well, forget whoever told you that! Do you really value every single company in that Index Fund? Don’t you have some area of expertise that you can put to use? Well look no further than Rule #1 Investing! It follows the same principles that Warren Buffet uses to beat the market. The only difference is that you can become a savvy value investor and consistently beat the market over time.
I have read Danielle Town’s book Invested which uses this strategy. Phil Town, her father, runs Rule #1 Investing. This is for long term investing, which is not a “get rich quick” scheme. Totally legit! I practice it myself, and I’m getting better at it every day. Simply Wall Street is also a great tool to help evaluate a company’s value.
11. Strive for Progress, not Perfection
If and when you start trying to tell people that you are working on being Financially Secure, just tell them that everybody is a hypocrite. You will mess up, I promise. But that’s okay!! You can forgive yourself, and lift your head back up. Life is a journey, and God only knows where your finish line is.
And not only that, but some rules will work better than others. So establish your own priorities and rules that work best for you. I am not the end-all be-all for your life or your conscience. I am merely a guide who has had my own struggles as well as enlightenment. Take what you want, leave what you don’t. No judgement here.
12. Sign Up for my Weekly Email, It’s Free!
It’s completely FREE to sign up for my weekly email. I will provide you with my latest insights about how you can become and remain financially secure! Your success helps us all become a little more human, and a lot less stressed. Your mind and body and spirit are all important. Guard them at all costs. Money is only a means to an end. It is not the meaning itself.
**The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.