Welcome to the first Money Mondaze post! Here is where I want to share my journey to financial freedom with the hopes that you follow along. Getting a grip on my finances and becoming financially savvy is one of my goals this year. Taking the first step this 2020, to educate myself on how to become wealthy, achieve financial independence and make my money work for me. Growing up I was taught the importance of working hard. At 15, I started working for the first time, babysitting for a neighbor.From there I went on to working in boutiques, salons, restaurants and so on. The taste of money was sweet but so was spending it. Buying what I wanted and not having to ask for permission was my first taste of financial freedom. But like anything fun, there are responsibilities. I was told by my mom to save my money, to be a little more frugal. Let’s be honest, I didn’t listen. I had money to spend and outfits to wear My mom has worked in banks for a good portion of her career and is incredible with money, numbers and can budget for anything. You would think I would have learned a lesson or two from my mom but no. Looking back and trying to figure out where my habits of spending started, I can only think of two reasons.
One, growing up, my parents worked hard to give us everything we ever needed, and when my mom was laid off from the LA Times, she decided to go back to school. With my parents having one income, a lot changed. We still had what we needed but the little luxuries like eating out or buying new clothes lessened. My mom finding ways to save and being frugal, for whatever reason was embarrassing to me. So when I started making my own money, I would spend, spend, spend. The second reason that comes to mind was the experience we had as a family when my grandfather was diagnosed with Alzheimer’s. My grandfather was apparently great with money as well. We (the grandchildren) had no idea what he really had until he was sick. He lived a very frugal life until he remarried. Long story short, he married a gold digger, that spent so much of his money. Ultimately putting him in a home and taking the majority of his money and assets. The whole experience of watching my grandfather live his final days in a home, when he should have been in his home, killed me. He had millions in accounts, and stocks combined, and at the end of his life I don’t know if he really had the chance to enjoy his money. I remember thinking, “he saved all this money over a lifetime, and it all went to someone else”. I think this was the time I decided to enjoy what I have, spend what I have and if I die tomorrow, there are no regrets.
I spent my 20’s doing just that, making money and spending it. Putting bigger purchases on credit cards and never looking back. With a school loan and credit card debts, it adds up quick and high. I’ve paid off cards just to reuse them or open a new one. When I say I suck at money, I SUCK. I started reading a couple books and one that really started to make me think was by Suze Orman. She brought up an amazing point that the reason many of us, especially women are horrible with money, is because we are told and taught to never speak about it. You never tell anyone how much you have or make and you definitely never talk about debt. It’s no secret that the credit card debt in the US is at $13.86 trillion. This means there’s so many of us in the same boat, and yet no one talks about it. We have attached shame to our debts and try to keep them a secret and continue with a facade that everything is okay. I remember being in college, living check to check and still finding ways to shop. My credit card spending was honestly out of control and it took years to pay it all down. Today I still have credit cards that I use to make big purchases and to be honest I am over paying the interest, or buying things I think I need, but don’t really. So my mission is to start this year educating myself on making smart financial moves, achieve financial independence and all that comes with it.
So what is Financial Independence? Financial independence means that you get to make life decisions without being overly stressed about the financial impact because you are prepared. You control your finances instead of being controlled by them. Having the ability to make decisions that are best for you. Hate your job? Quit! Wish you could travel for a week or more? No problem. Want to relocate? You got this. Want to donate to causes you believe in? Give! So many of our decisions revolve around money, CREAM!. Imagine the day that you get to keep the majority of your paycheck, after rent and PG&E. Being able to save and invest, and enjoy life a little more freely. What I learn and share, will most likely need to be altered by you in order for it to fit your lifestyle and budgets. The end goal will be the same. Us mastering our finances, making investments and watching our $$$ stack!
So first things first. Savings account. We should all have one, if you don’t, get one. Actually open a few accounts. I learned this from @heyberna at the Built By Girls summit was to have multiple accounts with banks. Treat each one as an envelope. One for savings, one for bills, one for shopping, one for travel, and so on. You create these personal envelopes that you need if your life. The savings account should be the hardest one to access. You should be able to deposit money with ease and it should be difficult to take the money out. Create a hard boundary with your savings, so that when something sparkly catches your eye, you can’t touch your savings. The savings account should be used for the big picture of your life, like the down payment on your house, college fund, etc. There are a few helpful guides to use depending where you are in your stage of life. No matter where your are on your path, start to save for the bigger picture. You can find so many helpful charts that cater to anyone’s budget on Pinterest. My first envelope is going to be the Big Moves, this savings account will be used to make a big move back to Southern California in 2021 and will receive bi-weekly attention. The goal is to save 10 grand a year, minimum, with this chart.