Hey guys! So from prior feedback, financial topics always seem to be helpful/popular so figured today I would talk about some changes that we’ve made this year regarding how we handle our money. A large part of this is due to working with the Financial Gym, and while everyone’s situation is different, I thought that sharing some high level changes we’ve applied could be helpful. As a side note, I do work with the Financial Gym as one of my brand partners, but this blog post isn’t sponsored. You guys probably know by now though how much I genuinely love their service and how much I would recommend it (and if you guys want to try the Financial Gym you can always use code 20CLAIRE for a discount 🙂 ). That being said, they have helped us a ton with our finances so figured I’d share a few tips on how we approach our finances then vs. now.
I should start by saying that it can be harder to save money in “today’s world” given that every time we open social media, someone is sharing something that we “need” to buy, and in general the comparison game is real. And I know I am guilty of this too — on both ends! Part of my job is to be a resource and share items that you guys may like, but I never want you to feel like you have to have anything. At the end of the day, they are just things. And on the other side of it, I am a consumer of everyone else’s content on social media so I have definitely fallen in the mindset of “needing” something, or feeling like I don’t have enough compared to someone else. While I’m still human and feel that way occasionally, my mindset really shifted after reading the book The Psychology Of Money. I highly recommend that everyone read it but I shared some of the takeaways here. All that said, I think once you’re able to shift your perspective on money (the points I outlined in the book recap), it is much more incentivizing (IMO) to work towards better managing it.
Below are some of the small changes that have made me feel much more confident in managing our money. These are by no means the only things we’ve implemented with the Financial Gym, but since everyone’s finances are different, I’m not going to get into the weeds and share our specifics. Again, these are more high level principles that everyone can apply regardless of their financial situation.
Implemented a Weekly Budget After we submitted all (I mean, ALL) of our financial information to the Financial Gym, they gave us a 20 page (20 page!!) PDF outlining all of our finances, and what we were going to implement to reach our (said) financial goals. Part of this entailed a weekly budget. Basically, once all of our fixed expenses (ones that don’t change every month) were accounted for, and money was set aside for savings, the leftover amount is what we had to spend each week. It’s up to us how we spend it, but in order to pay for our fixed expenses and set aside a certain percentage to savings, that was our weekly allowance. This was really helpful because it made me pause and think how I was spending money. Even if it was within the weekly budget and I ended up spending it, it still made me more self aware about my spending habits.
One other thing I will add to this, if you have a variable income (Stephen doesn’t, he is on a fixed salary, but my income is different every month), you may have “more” to spend in your weekly budget than what is originally alloted. What we did is we looked at what I typically make each month and decreased it to the “bare minimum” that I would likely ever make and that is where we got our weekly budget from. Then, if I made more, great! We could then save more, and have more disposable funds but if not, the weekly budget was accounted for. More on this in the financial “buckets” point below!
Outlined Long Term Goals One of the other things we did in our initial consultation with the Financial Gym, and something they took into account when outlining our finances, were our long term goals. These were goals that were 1 year out through when we retire. I think this is really helpful because you’re able to verbalize (and visualize!) certain things that you’re working towards and it gives you even more incentive to save. Maybe you want to go to Europe next summer, maybe it’s a kitchen renovation, or maybe it’s just related to retirement. These goals can always change but they are good to think about!
Opened a High Yield Savings Account So I didn’t even know these existed, but there are high yield online savings accounts that you can open for free. Sure, you’ll have money in savings that is somewhere like a Vanguard account but you usually don’t want to access that because it’s either set aside for retirement or it’s your own personal savings that you want to just compound over time. Aside from those savings though, you probably have a savings account linked to wherever you bank. What we did was transferred the majority of that money to a high yield savings account (we use Ally Bank). The benefit is you’re gaining more interest but it’s also easier to keep your savings organized (see next point)!
Designated Financial “Buckets” One of the things I love about Ally Bank (the high yield savings account we use) is that you can designate different “buckets” ie. categories for your money. These buckets were outlined for us based off our goals when we first did our budget with the Financial Gym. By having these different buckets, it makes it really clear on where you can spend your money, and it takes away any guilt or hesitation when making a (big) purchase. For example, the buckets we have are:
-Travel / Flex Fund (This fund is designated for travel but also has any additional “fun” money ie. going out to eat, buying clothes, etc. if we want to go over the predetermined weekly budget.)
-Home Reno / Future Family Planning
(We have a business category too, for money towards our businesses/future businesses, but that remains in my business checking. Retirement is already accounted for as well, but that obviously isn’t housed here).
At the end of every month, a certain (predetermined) percentage of what Stephen and I make, is transferred into these buckets. This allows me to see exactly what funds are available in each category. So let’s say I want to buy more furniture. I can look in the Home Reno bucket and see what has been designated for that. That money has specifically been set aside for that after all of our fixed expenses and savings are accounted for so I don’t have to wonder if it’s a responsible purchase. And of course things can be moved around–like let’s say you decide to limit travel so you can renovate a bathroom, you can transfer money from the Travel/Flex fund to the Home Reno fund. But having the buckets just lets you know that money is truly dispensable and can be spent how you please as everything else has been accounted for.
Alright guys, I think that’s about it! Like I said, there are more things that we have done/implemented, but they are more specific to our personal situation. Hopefully these tips though give you some things to think about with your own finances! And seriously, I can’t recommend the Financial Gym enough. I have a highlight saved called “Financial Gym” if you want more information on how it works! Also, anything that has helped you with your finances I’d love to hear about!