Watch this episode on YouTube HERE.
I’m your host, Dr. Darla Bishop, your big SIS who is going to guide you through this process.
So, what makes me qualified to talk about money? Well, first – I like money. I like having money. I like being able to use money to solve problems – for myself and for other people. I have been learning about money my entire life. I have read more than 100 books on money management, and I coach people on how to manage their money.
So, if you are under 40 years old, possibly come from a disadvantaged background, you are making your own money now, and want to do better, this podcast and my upcoming book is for you.
Are you juggling multiple things like a career and a family? Do you have student loan debt? Maybe you really want to buy a house or you have aging parents you are worried about. If this sounds like you, keep listening.
This is a special miniseries introducing you to the topics covered in my new book “How to Afford Everything”.
The book comes out on December 12th, 2023 and pre-orders start on 10/31/23 at darlabishop.com.
You can also follow me on all the socials @my_finanSis
Topic #1: Chapter 1: Budgeting & Goal Setting
How does the word “budget” make you feel? Does it make you feel like you have control or does it make you feel restricted?
Regardless of how it makes you feel, you need a budget. Everyone does.
How much does it cost you to live? Would you believe that most people can only answer this question with something like “more than I make.”
Budgeting begins with knowing what it actually costs you to live, and how much money you have available to pay those costs. So, if you don’t currently use a budget, your first homework assignment is to look at how you spent your money over the last 3 months.
Here’s how you do it
1. Calculate Your Net Income. Start with your after-tax income
2. Write down your fixed, variable, and other expenses, including debt payments, based on how you spent money in the last 3 months. There is a worksheet for this in the book but you can do it on regular degular paper too!
3. Pause and ask yourself, “Do I have any expenses coming up that might not fit neatly into fixed or variable expenses?
A note about your expenses: When you write them down, round up a little, and when you’re writing down your income, round down a little. In budgeting, you want to build in cushions wherever you can!
If your income number is bigger than your expense number, congratulations! You have money to put towards short or long-term goals.
If your income number is smaller than your expense number, congratulations to you too, but for a different reason. NOW YOU KNOW and you can do something about it!
Cut expenses, increase income, or both at the same time. And now you know exactly how much!
Topic #2: Setting Goals/making a plan
Now that you know how much it costs you to live, it’s time to make some goals!
Financial goals come in two flavors: short-term and long-term.
Short-term goals might include building an Oh Shoot fund, paying off a credit card, or taking a vacation. They’re the goals you can achieve in the next few months or years.
Long-term goals could involve buying a house, funding your children’s education, or achieving financial independence. These goals take time, and careful planning, and usually involve substantial investments.
Break down your goals into S.M.A.R.T goals:
Specific: Clearly define what you want to achieve. Instead of saying, “I want to save money,” specify, “I want to save $5,000 for a down payment on a car.”
Measurable: Establish a concrete metric to track your progress. For example, “I will save $500 per month for 10 months.
Achievable: Ensure that your goal is realistic and attainable within your current financial situation.
Relevant: Make sure your goals align with your values and priorities.
Time–bound: Set a deadline for when you want to achieve your goal. This adds a sense of urgency and helps you stay on track.
Need help writing smart goals? There are worksheets in the book.
Topic #3: Money Mantras
It is helpful to have a few phrases or “mantras” to help you reprogram your thoughts and feelings to get your brain fully on board with this money management thing.
Here are a few of my favorite money mantras:
- “Money is fun!”
- “It’s not in my budget.”
- “I’d rather be tired than broke.”
Do you have any money mantras you’re going to add to your list? Let me know on the socials.
Click here to buy my book, How to Afford Everything.