Want to get on top of your finances? If you’re like most Americans, money is on your mind. 78% of Americans live paycheck to paycheck and very few can meet a $1000 emergency without taking on debt. Let’s not even go into how ill-prepared we are for retirement. If this is anyway you and you want to turn your money situation around, why not take the 7 Day Money Basics Challenge to get yourself on the path to fiscal health?
This 7 day challenge is the underlying method I used to go from six figure debt to living financially free and semi-retired in less than 10 years – so I know it works. Most financially stable households use this method whether they call it by this name or something else. Why not check it out?
What Is the 7 Day Money Basics Challenge?
This personal finance challenge is geared to help you take control of your money step by step over a period of seven days. During the challenge you will:
- Assess your current financial health
- Learn what “living within your means” means with actual numbers personalized to your particular circumstances
- Discover your spending patterns, including necessary and discretionary spending habits
- Make a financial plan to get on track
- Set up automated payments for bills, debt payments and savings contributions
If that sounds like a lot, rest easy. Each task gets its own day and are all the essential steps needed to put your financial house on a sound foundation. Without any of these “basics” your money will go unmonitored and down the drain rather than toward your goals and dreams.
In 7 days you’ll discover what financially stable and secure people do to stay financially fit. Step by step, you’ll be implementing their habits to join their ranks.
What You’ll Need
Contrary to what talking head financial gurus want you to believe, money smarts only requires a handful of knowledge you already possess and not a pricey financial advisor. The math is literally addition, subtraction, multiplication and division taught by 5th grade and which you can even do on your smartphone’s calculator. In terms of financial literacy, learning the basics presented in this challenge will cover everything to get you started and probably 70% of what you need to know about regulating your money for life.
What will you need to bring to the table?
- Pen & paper or a spreadsheet (example: Excel)
- Your financial records: bills, debts, paycheck and income info, etc. – basically a list of where your money regularly comes from and goes
- Belief that you can grow as a person and change your money habits, even if it takes time
- A commitment to financial responsibility
That’s it! No fancy formulas or schemes. The challenge will take a little bit of your time. You could do all the steps easily in a day or over a weekend but the Money Basics Challenge spreads the exercises over 7 days to give each task its own day. And I promise, it’s all less painful than filing your taxes.
By the end of the challenge, you’ll have gained financial literacy skills and knowledge while having taken immediate action to put your finances on a stable foundation.
Let’s get started!
Day 1 – Know Your Wealth
Good financial health starts with a snapshot of your current money situation – however excellent or bleak. We can’t go anywhere without knowing where we are now. Many people hate thinking about or learning about money – though people pretty much are universally happy to always get more. This reluctance toward money also leads to reluctance to learn, let alone enact, solid financial principles. That is a recipe for personal finance disaster.
So to start off, we’re going to look at your money situation in all it’s glory – something most people hate. If you find it painful to think about, that’s okay. Consider this ripping off the bandaid so we can treat the wound and get it healed up as fast as possible.
How will we do that? For starters, we’re going to calculate your net worth!
Day 1 Task: Total all your assets and all your debt to reach your personal net worth.
Why This Matters
Most people carry some debt, which is simply any money owed. By itself, debt can be useful or harmful. It depends on the amount and where it gets you. The more debt you carry compared to your assets and income, the harder you’ll struggle to make ends meet. We all know this intuitively.
However, debt usually comes with interest and few people pay this any mind. This interest is what really eats up your financial stability, as it is essentially free money you’re giving to lenders out of your own pocket. In terms of 30 year loans, in general you’ll pay back the loan but wind up also including nearly the same amount in interest on top of that. For example, a 30 year mortgage or student loan of $100,000 will actually cost you around $200,000 thanks to nearly $100,000 just in interest. Wouldn’t you rather spend that extra $100,000 on your own goals and dreams rather than hand it to the fat cat banker taking it for the “privilege” of loaning you the money in the first place and billing you via a computer program while they go play golf?
Additionally, you need to know your asset base. You can’t grow your wealth or be financially stable without assets. Assets are items or accounts that can be sold for money. The best true assets are those that make you money, like earning interest, dividends, bond payments, passive income, or royalties. These build your wealth. If the asset isn’t earning you money, you’re probably losing money on it from inflation.
At some point we all want to retire. That and sometimes we can’t work due to injury, disease or other unforeseen circumstances. Having assets shelters us in times of emergency and prepares us for the future when we can’t or don’t want to work. In terms of retirement, assets will act like a trust to support you. The more you have accumulated and the more money it makes for you, the better off you’ll be.
Let’s get started on your net worth. All you need for this is paper and pen or an open spreadsheet to track each item and its value. That and you’ll need to look up your current assets and debt values.
Exercise 1: Total your assets
Assets. This means adding up the amounts in any savings, checking, investment, and retirement accounts as well as totaling the value of your home if you own one but only include the value in equity. I’d leave out the value of your car since it’s depreciating every day and costs money to maintain. Leave out clothes and personal belongings and things such as that.
Exercise 2: Total your debt
Debt. Total up what you owe. Common debts include student, car, and mortgage loans as well as any credit card or medical debt. Whatever you owe, add that to the total.
Exercise 3: Subtract your total debt from your total assets to reach your current net worth.
Net worth. If you were a company, net worth basically says how much you’re worth if you had to close shop and liquidate your assets today. A grimmer way of looking at this would be to see what you were worth monetarily if you died today. Would you have money left over or would you still owe? This is your current financial snapshot. It changes month to month as money comes in and leaves. You may have a positive or negative number. Most people don’t know this number and as a result, can’t make a workable plan to grow their wealth or limit their liabilities.
By seeing your net worth, and the asset and debt base it’s built upon, you can see if you’re on track for goals like retirement or whether you’re just digging a bigger financial hole for yourself. In general, younger people have had less time to accumulate assets and wealth than older generations.
Keep these asset, debt, and net worth figures for your reference. We’ll look at them again in later steps. Make a folder for this week’s challenge to keep everything together, even if it’s a folder on your computer.
Takeaway: You want to build assets, especially ones that make you money, and minimize your debts and liabilities (which sap your spending ability and prevent even more spending on your goals thanks to interest). This asset building and debt limiting is the goal the financially stable and wealthy pursue.
Bonus exercise. If you’re just starting to look at these figures, I highly recommend using tracking software. Personally I’ve been using Quicken Personal Finance & Budgeting Software for well over a decade to track my finances. Once a month I download or manually enter account info to it and Quicken does the math or runs reports for me. You can buy it once and forego purchasing the updates and subscriptions. It will still keep working just fine since you don’t actually need 90% of its frills. Bottom line, if you’re not tracking your numbers, you’ll find it very hard to get and stay ahead.
That’s it for Day 1 of the challenge! Arguably this is the most intense and time consuming day so congratulations for getting the hard part out of the way!
Day 2 – Know Your 70/30 Numbers
As mentioned before, most Americans live paycheck to paycheck. We’re also a nation of debtors. To live a financially sound life means living within your means, not beyond them like most people. A good rubric? The 70/30 Rule.
The 70/30 Rule requires living on 70 percent of net income and investing in money making activities with the other 30 percent. This can mean making contributions to your IRA, 401k, investments like stocks and bonds or mutual funds, a savings or money market account, or even toward a business that makes you money. The 70/30 is a balanced way of living, allowing you to enjoy today but still make provision for the future without undo austerity. You’ll also be building your wealth so that eventually, your income from investments will take care of all your expenses. This will make you financially free and hopefully you’ll reach this milestone before retirement. After all, you won’t be able to work forever and will need a source of income when that day arrives.
Day 2 Task: Today we find your personal 70/30 numbers.
These numbers are key to living a financially secure life. They’re pegged to your income as a percentage of it so as your income goes up and down, what you live on and save goes up and down with it. In this way, you can increase your spending when you have more money – and who doesn’t like that? At the same time, you will also increase your savings proportionally as your income increases so that you’re putting aside money to keep you living in the style you’ve gotten accustomed to once you retire.
Let’s now figure out your personalized numbers.
Exercise 1: Total your monthly net income.
Add up all net income from paychecks, dividends, passive income, etc. This is money after taxes and what actually goes into your bank account. You may make $5,000 a month but only take home $3,000 in actual paycheck. It’s the $3,000 number we go with. The rest isn’t yours to keep if it’s not going into your pocket in some way and so can’t be counted as income.
Take that net income number and multiply it by 0.70 (aka 70%). The resulting number is the amount that equates to living within your means. To find the amount you should be contributing to money making endeavors (i.e. investments), multiply your net income by 0.30 (aka 30%). These are your 70/30 numbers and they’re extremely important for financial health.
Example: Tanya makes $5,000 gross income each month but after state and federal taxes, along with social security, etc. are deducted, her net paycheck is only $3,000 a month.
Tanya’s 70% Rule: $3,000 x 0.70 = $2,100
Tanya should spend a maximum of $2,100 for all purchases, expenses, etc. per month. Any short-term savings goals like a car purchase, vacation, etc., come out of this 70%. The only spending excluded from it is the 30% used for buying assets.
Tanya’s 30% Rule: $3,000 x. 0.30 = $900
Tanya should contribute $900 minimum a month into buying assets of some sort, whether that is contributing into a 401k, IRA, buying stocks and bonds, real estate for income, or some other investing means so that her hard-earned money works for her and is there for her future.
What are your 70/30 numbers using these formulas?
If you’re like most people these numbers may feel completely impossible and unrealistic. After all, 78% of Americans live paycheck to paycheck, meaning they aren’t putting anything back and as noted before, most can’t weather a $1000 emergency without taking on debt. If you’re like most people, then you’re probably feeling pretty stressed about money right now and looking for solutions. The 70/30 Rule is the solution. Don’t get disheartened though. It is achievable. Today’s work is just one of the stops on the road to getting there.
Keep these numbers handy. We’ll be using them in the coming days of the challenge.
Day 3 – Needs Versus Wants
Yesterday we figured out what living a stable and secure financial life means for your net income by calculating your 70/30 Rule. Maybe you’re spending less than your 70% Rule and putting away more than your 30% Rule. Maybe you’re spending more than you comfortably make. Each person’s situation will vary.
Day 3 Task: Today’s exercise is tracking monthly expenses – both necessary and discretionary – to see what your default budget looks like.
Let’s see where your money is going.
Exercise 1: Total your necessities
Take out a piece of paper or open a spreadsheet. You’ll make two columns. Write down “Needs” for the first and “Amount” for the second and underline them. Under “Needs” and “Amount”, write down your debts and the monthly payments for all your debts (examples: student loan, car, medical and mortgage payments). Next add monthly utility expenses like electricity, water, sewer, phone, internet, car insurance, and health insurance. For now, leave out things like cable and subscription services like Netflix, Amazon Prime, Hulu, Apple storage, newspaper subscriptions, etc. Now add monthly rent or mortgage payments, fuel costs, transportation costs, and grocery costs, and medical costs. Don’t include clothing or gym costs, eating out or entertainment. We’re looking at necessities only. While that Starbucks coffee might feel like a necessity, you can live without it quite fine.
Total all the amounts for your “Needs”. This is the cost of your monthly necessary expenses. Without them, your utilities would get turned off, you might face default, and you couldn’t eat or get to work or might face health problems without them (such as with medications, prescriptions and treatment). Everything else, like that Starbucks latte, Netflix account, tickets to the movies, new jacket, etc. falls under discretionary spending.
Compare this “Needs” number to your personalized 70% Rule we calculated yesterday by taking 70% of your net income. Are your necessary expenses more or less than 70% of your net income?
Exercise 2: Calculate your discretionary spending limit
To find your discretionary spending limit, simply subtract your “Needs” from your 70% Rule we calculated yesterday. This is your free money to use any way you like.
Example: Tony makes $2,400 a month in net income. His monthly “Needs” equal $1,300. What is his maximum discretionary spending limit?
Tony’s 70% Rule: $2,400 x 0.70 = $1,600.
Tony’s discretionary spending: 70% Rule amount of $1,600 – “Needs” total of $1,300 = $300 for discretionary spending a month.
To live within his current means, Tony should spend no more than $1,600 on all expenses. At $1,300 Tony’s “Needs” are less his 70% Rule by $300. He can use this $300 discretionary money however he wants – whether for movies, clothes, cable, happy hour, vacation, etc.
Incidentally, Tony’s numbers are the real numbers for a teacher who asked me for budgeting help about 2 years ago. She lived paycheck to paycheck, had gone into default on her student loans and didn’t think she had any money to cover her bills, let alone save and pay down her debt. We sat down and by going through this exercise found she was actually spending $1,100 a month on non-necessities like happy hours, manicures, clothes, wine and other spending. She was shocked by the numbers. How do you feel about yours?
Exercise 3: Calculate Your Actual Discretionary Spending
You may have an idea of your discretionary spending based on the above exercises. Now actually tally it by taking out your bank and credit card statements. You don’t need to go so far as digging out receipts. Just look at your statements from the last several months. Go back six months to a year to see where and how much you’re spending on average a month on the non-necessities you calculated in today’s Exercise 1.
Look again at your calculated total spending limit under the 70% Rule. Now look at what your discretionary spending should be using the formula from Exercise 2 above and your current necessities. How does your actual spending compare?
If you’re like most people, your discretionary spending eats up your paycheck, whether you’re managing to pay your bills or not, let alone are contributing to savings for emergencies and the future. Are your necessary expenditures at least under 70% of your net income?
If the difference between necessities and your 70% rule is a positive number, this is the money left over for you to spend however you like – eating out, buying clothes, spending on entertainment and trips, etc. So long as your necessities are coming under budget, you’re actually in decent financial health even if you feel strapped for cash.
If, however, your necessities amount is over the 70% threshold, then you’ve got a problem that will require a lifestyle redesign, cutting back in some way or bringing in more money. Depending on your debt loads and how much money you have left when subtracting your needs from your net income for the month, you may be able to pay down debts using money from the 30% Rule to get you into better financial shape in the near term.
Tomorrow we’ll look at your actual spending versus 70/30 Rule limits to see how to reorganize your spending in a way that makes sense for you. This is where we’ll take the bull by the horns and start changing your money situation.
Day 4 – Make a Financial Plan
Over the past 3 days, you’ve worked out the basics of your financial situation. You’ve found your 70/30 Rule amounts for living within your means and seen the disparity between it and your current income and expenses – whether positive or negative.
Today let’s study your actual spending and look at where your money is coming from and where it’s going. Look at your bank and credit card statements once more and see where and how much you are spending.
Is more than you realized going towards non-necessities like entertainment, clothing, happy hours, dining, or random expenses that are hard to track? What are your spending and saving patterns? Are you saving? Where are you saving? Is it systematic or random or nonexistent? How close are you to the 70/30 Rule?
The math of the past few days has been nothing but addition, subtraction and multiplication. It’s simple math but our spending and income habits are really difficult things to manage unless you’re one of the few financially stable Americans not part of the majority living paycheck to paycheck and unable to meet a $1000 emergency without taking on additional debt.
Today, look at where you’re spending. Are you shocked or did you have a good idea about it? If you’re over budget and in the red, what areas could you trim, eliminate, downsize or change? How comfortable or motivated are you to do so?
When I talk with people about their finances, a common refrain is that people don’t make enough and that they don’t have a dollar to spare for savings. When I peel back the layers on actual spending and income, I mostly see a plethora of upside down priorities. For instance, I’ve observed these actual habits in individual people at some time or another that repeat in various ways in others:
- Can’t afford car insurance so doesn’t carry it, yet always buys enough alcohol to have 3+ drinks a day.
- Can’t afford a decent car but has a near daily pot habit.
- Can’t afford vacations yet spends hundreds on clothes a month.
- Can’t save for retirement but takes several pricey mini-vacations a year.
- Can’t pay credit card bills yet eats out for lunch or breakfast throughout the week.
- Can’t save for an emergency fund but goes out to dinner and happy hour 3+ times a week.
- And so many more examples
I’m not saying you shouldn’t use your money however you wish or that you can never indulge but people are out of balance in their spending. Misprioritization is actually the real problem behind most of our financial woes. It was for my financial problems too. Once I started prioritizing financial health, stability and my dream of financial freedom, I started putting my other spending habits into perspective and down-sized or eliminated those that weren’t serving my goals. Was it easy? Not always but in less than 10 years I had semi-retired – so now I don’t regret any of it.
Next, take out another piece of paper or open an Excel sheet or budgeting tool. Put in your net income number in the top row and label it so it’s front and center. Under that, list and label your 70/30 numbers based on your net income. These are your spending and saving parameters. You want to always stay within them.
To start planning how your new spending and saving routine might look, write down your necessities and their amounts, your nice to have and their amounts, and where you would invest your 30% and amounts (that could be retirement funds, emergency fund, and other investments). Play with these figures to see what works best and will get you toward your goals.
What if you have too much debt?
If your debt payments make up 35% or more of your income, you might consider making extra payments out of the 30% Rule to pay down your debt to more manageable levels. Paying off debts would also free up more money each month since you’d no longer have to make those payments (or lose money from accruing interest).
Start making a draft plan on how to best allocate your money under the 70/30 Rule. What would the perfect scenario look like for your current income? How can you start shifting your money habits over the next year to fall in line with that?
What I like to do is take out a notebook or use Excel to draft multiple options, changing amounts for my eating out bills or entertainment, travel, etc. Years ago, I even ran the numbers on what would happen if I left my one bedroom apartment and moved in with a friend. I saw by doing that I would save $700 a month for a whopping $8600 total savings over a year. Since my lease was month to month, I gave my notice and moved in with my friend for several years to simultaneously pay down my debts and top up my contributions to investments like my 401k, IRA and other investments.
Every budget and financial plan is personal. There’s no one size fits all. The important thing is reassessing your priorities and setting a course for your saving and spending goals, as well as looking at ways of bringing in added income if needed. Today, start drafting how you want your finances to look and how to best get them close to the 70/30 Rule.
Bonus. It may be helpful to write down your financial goals. These can be short-term or long-term goals or a mix. Be as specific as possible, using dollar amounts and date timelines. The more specific, the better your chances for implementing that goal and achieving it. Break down your goals into increments to help you reach them more easily, as well as to help you figure out the time scales involved.
Check out these best personal finance habits and tips:
- Did You Know Building Wealth Had These 7 Rules?
- Do This or Live Broke – Make Money Work For You
- Do This or Live Broke – Stash Your Cash
- Do This or Live Broke – The Midas Lifestyle
- Make Money Work For You – Debt Payoff Option
- Do This or Live Broke – Don’t Dig Money Pits
Day 5 – Automate Your Bills
So far you’ve done some heavy lifting on working through your spending habits and goals. Hopefully at this point you’ve made a plan or are working through drafts of one. Today we start making life simpler for you by setting up automated payments for everything we can.
It’s easy to lose money or ding your credit score if you don’t automate. Late fees quickly add up and late payments will impact your credit and the interest rates you can get on car loans, mortgages and credit cards.
Day 5 Task: automate common bills like monthly or quarterly utilities, insurance, and your rent/mortgage. Whatever you pay bills on, log-in to the website for that bill and sign up for autopay using either your bank account or credit card. This will kiss late payments good-bye and stop the accumulation of unnecessary fees. It will also help you get into a financial routine.
Personally, I prefer using one credit card for all my auto-payments. In the first place, I can earn reward points toward flights, hotel stays or gift cards. That’s free money that’s lost via bank payments unless your bank also gives you reward points for your checking. In the second place, due to the risk of account hacking, I’d rather see my credit card hacked than my bank account. Credit cards have better fraud protections. If someone hacks and drains my bank account, I generally can’t get the money back but if they hack my credit card, I can have that charge removed.
Don’t let the hacking risk scare you. It’s rare and you’ll be better off getting your financial house in shape than constantly losing or misplacing your bills and always scrambling to pay them – or their late fees.
Today, sign up for autopay for as many payments as possible.
Day 6 – Top Up Your Checking Account
Financial experts harp on having six months of income put aside for emergencies. This is great advice but fraught with problems depending on where you stash the money. If you put it in a savings account, you’re actually losing money because inflation increases more than the paltry interest you will make on the money. Say your net income is $35,000 a year. This means you would need to set aside $17,500 to cover six months of income.
First off, if that goes into a savings account, you’d maybe earn like 0.001 interest or a grand total of $17.5 a year. Wow. How underwhelming. Even if you put it in a money market account with Capital One (a leader in interest rates), you’d only be making like 1.6 percent for $280 a year. Yawn. There are many better options for your hard earned money to make you money.
Secondly, if you put that kind of money into a savings or money market account, especially one tied to your main checking account, you’ll easily dip into it at any provocation. It’s way too accessible.
The better option is to split the money across various savings vehicles. My suggestion and what I do, is save up a month’s expenses and always keep it in my checking account. Having a month’s expenses keeps me from living paycheck to paycheck. It’s relatively easy to pay any minor unexpected expenses that crop up and top up to the month’s expense amount afterward. Everything over that monthly amount goes into longer-term investments, starting with my 401k and IRA, then going to other investments.
Day 6 Task: look at your total amount of monthly expenses calculated and start collecting this amount in your checking account. Once you reach this one month amount, keep it regularly topped up to this sacred number from your paychecks. If you already have this amount in your checking, excellent. You can start opening and topping up other investments using your excess money.
Day 7 – Open/Contribute to Your Retirement Account
We’ve looked at your 70/30 Rule and discussed what it means to live within your means and understand discretionary vs non-discretionary spending. Today we’ll start putting your 30% Rule into action and allocating money to investments. Remember how most people live paycheck to paycheck and can’t afford a $1000 emergency without going into debt, let alone put aside money? If you’ve done the exercises from Day 1 to Day 6, you have probably found excess cash you were spending on non-discretionary items. Today we’re going to allocate that excess cash to build your wealth and financial stability.
Basic financial stability is built on providing for tomorrow. The first place to start is with your retirement. Many companies provide a 401k account for employees. On Day 7, get the information on yours if you haven’t already and start making arrangements to put 30% of your net income into it each month. 401k accounts are great because they are from pre-tax income, easy to automate, and sometimes your employer will match your contributions for free money into your pocket.
If your employer doesn’t provide a 401k or you are self-employed, you’ll have to look at other options like a SEP IRA, Traditional IRA or Roth IRA. SEP IRAs are for self-employed and have the highest contribution amounts among these three IRAs. Traditional and Roth IRAs are both capped at $6000 a year. The main difference is how they are taxed upon withdrawal of the money. Traditional will be taxed later but come with tax benefits today whereas Roth IRA contributions are after tax today and not taxed in the future when withdrawn. In all cases, you can withdraw the amounts at anytime but will face penalties for distributions before retirement age unless using the money for first time home purchases.
You want to start your 30% Rule by maxing out your retirement accounts first. Why? They typically have the best tax benefits, are easy to automate, annoying to cash out for minor needs but liquid enough to withdraw in a real emergency, and are integral to your future financial stability. Because of their set it up and leave it nature, they’re the best, low hassle way for most Americans to save money. Only after you’ve topped them up should you move to external investment accounts like brokerages for stocks, bonds, ETFs, etc.
More importantly, since Americans are notoriously bad for saving for anything, this means most people do no max out their retirement limits. If you’re making fewer payments than the full limit each year, start here.
Day 7 Task: Open/apply for your 401k plan and set up automated payments of 30% of your net income. If you already have your 401k plan set up, raise your automated payments to 30% of your net income. Have you already maxed out your 401k or your employer does not offer a plan? Open/apply for an SEP IRA if self-employed or a Roth/Traditional IRA and use the rest of your 30% net income to set up automated payments. Still have money left over? Start looking at other investment vehicles like mutual funds, real estate and other passive investment options (this article, being a basic finance introduction, will not cover these asset classes).
Do this and you’ll be building your wealth and providing for emergencies at the same time. You’ll also be ahead of 78% of Americans.
If you feel you absolutely can’t make the full 30% contribution due to demands from your necessities or you have massive debt you’re paying down, please at least contribute something, at minimum $5 a paycheck. This is a small amount anyone can afford and won’t miss. By doing even that much you will have taken action to prepare for your future and your goals. Keep doing that and increase the amount from your paycheck from there. Do that much for yourself and watch how even that small step will in time inspire you to go further.
Putting Your House in Order in a Week
And there you have it! That was the 7 Day Money Basics Challenge! By following it, in 7 days you can go from financially confused to walking the path to financial stability and freedom. What makes this challenge, well, a challenge is that we live in a culture of hyperconsumerism – where we buy buy buy and think we deserve to have whatever we want. We’re constantly being sold to and we feel “poor” and cash-strapped if we can’t keep up with the unrealistic portrayals of fictional TV lives, here today and gone tomorrow celebrities, or how our neighbors are blowing their money. When you realize that only 22% of Americans aren’t living paycheck to paycheck, you start to see the shape of our personal economies, let alone our national one – and it is a house of cards.
It’s unlikely the government is going to help anyone any time soon on medical costs, school tuition costs, or wages. So it falls to us to make the best of our circumstances and money. The 7 Day Money Basics Challenge gives you the framework for understanding your financial situation and if you’re in the red, ideas for how to problem solve it like those of us in the 22% have done. This may mean cutting back on spending, finding additional income sources, and/or changing your lifestyle by taking on roommates, even if only temporarily. Sometimes there are no easy answers but in general, most people can usually find that by analyzing their incomes and spending while reassessing their priorities, they have areas to cut back and places to invest.
If you’re looking for more ideas about personal finance, check out these articles:
- 5 Key Habits to Get Your Finances Under Control
- Motivation & Money: How to Find Your Carrot on a Stick
- 7 Money Hacks For People Who Don’t Want to Give Up Their Social Lives to Save Money
- Do You Understand Time and Money Like Financial Winners Do?
- How Everyday People Become and Stay Millionaires with the Book of the Month: The Millionaire Next Door
- What Our Parents Should Have Taught Us About Money But Didn’t with the Book of the Month: Rich Dad, Poor Dad
Thank you for taking the time to do the heavy lifting this week’s challenge requires. I sincerely hope you’ve found it helpful and can use these tips and tricks to live a life in pursuit of your goals and dreams rather than worrying over the next paycheck.
Like this article? Share it so that others can learn these money secrets and start living their best lives now.
Disclaimer: I am not a financial advisor. All of this is in my humble opinion and from my own practice. Everything mentioned in this article comes from my own experience in getting my six figure debt under control and becoming financially independent in less than 10 years.