5 Tips to Get Financially Fit!
For the first 3 years of running my business and venturing out on my own I had no mentor to teach me how to do my taxes, separate expenses, run a business, invest etc. It was a HUGE learn-as-I-go and ask-along-the-way type of process.
I was already pretty good at organizing my expenses for taxes- see this blog post - but I didn't realize how much MORE I could be doing in order to benefit from my money and make my money work for me!
One of my new year resolutions was to start investing but I seriously had no idea where to even begin. I knew I wanted to find a “financial advisor” but I didn’t want to deal with some large corporate firm speaking to a guy in a suit over his big desk lol
So I did some research on instagram and quickly found @FinancialGym. I was curious about it right away because of their interesting, non-conventional take on being a financial advisor. You are assigned a “financial trainer” just like you would be assigned a physical trainer in a gym and they help you get “financially fit”. I love this concept! They meet you wherever you are in life...whether you’re wanting to pay off your debt, buy a house or save for kids (ahh crazy to think this far ahead). They give you guidance along the way with lots of positive reinforcement and accountability.
It was the best decision I’ve made when it comes to finances and I’ve learned soooo much. I can safely say that my trainer Joy has helped me maintain my sanity during my house purchase and even budget my remodeling. My girl Joy is sooo helpful and I seriously look forward to our quarterly check ins (sometimes we even chat more often depending on what’s going on in my life). Joy is actually in NYC so all of the coaching and meetings have been done over Facetime! It doesn’t bother me at all. As a matter of fact I feel her support is just a quick email away, she answers literally immediately!! Did I mention she’s she best?
After our initial meeting and going over my finances and concerns, she put me on a "Muscle Building Plan" which focuses on building assets, saving for a medium term goal like investing + buying a house, and consistently putting money into a retirement savings for the long term.
I wanted to take the time today to outline what I’ve learned so far and share some of these amazing tips from my trainer!
1. Know your 1-3 year goals, 3-5 year goals,and long long term goals
Write them out on paper and be specific about where you would like to be in the next few years. Include when you want to have kids and retire. I was taken back when Joy asked me when I wanted to have kids so the college fund planning can start. I was like whaat?! That seems so far ahead, but I love that she wants to prepare me for everything.
2. Start an emergency fund
Because I am a freelancer, Joy advised I save a year’s worth of expenses as my emergency fund. We worked together to calculate what a current year of expenses looks like for me then I put that amount of money aside in a high yield savings account- Which means it can be accessed at any time in case of emergency without a penalty.
3. Investing
Since this was one of my goals this year, it was soo helpful to know how much to designate into this fund and where. I went with the company Betterment because it’s the most user friendly and automatically trades for you so all you have to do is deposit $. She helped me figure out what % of my gross income should go into my investments each paycheck and even walked me through setting up the account. Some of my investment money goes into stocks and some into bonds- I just leave it up to the system!
4. Business/Personal expense separation
Because I was using just one credit card for everything (baaaaad idea), Joy advised I get a separate card for my business so when it came to tax season it would be easier to separate the transactions. So now I have a separate checking account, a savings accounts, and credit card for personal and for business!
5. Budgeting
This one was tough for me. I used to always set a $ amount to spend per week on personal expenses and it often got way out of hand. The values I set were pretty much totally random and not calculated at all so no wonder I failed my goal! We’ve had to adjust this number a few times but now I feel like we’ve come to a realistic value and I even opened a seperate credit card for it, to hold me even more accountable so I can monitor things closer and never see the number going higher than it should. I’ve definitely had to sacrifice a few trips to Zara and a lot of PostMates orders but it’s worth it! We also have a budget for the remodel which has been a bit harder to determine since I’ve never done this before! But I have a seperate credit card for that as well so I can stay within that limit (hopefully).
Taking my finances into my own hands has been super empowering! I’m way less stressed during tax season, I understand how money works for personal vs. business and I’m confident that when I have kids and retire I will be taken care of because I took action when I was young to invest in MYSELF!!
Have you ever worked with a financial advisor? I’d love to know what YOU learned in the comments below!
P.S. - Financial Gym currently has a pretty great promotion going on right now. They are discounting their services which has never happened before. For this summer only, when you join the Financial Gym you will receive 20% off your monthly membership. You can learn more here!
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