Ok, ok, maybe not to rule them all, but in my opinion there is a ton of great info here. There are many links to other Cash Dad posts as well as some other great resources. Take your time and read through these, and you might want to bookmark this page so that you can come back to it later.
Financial Literacy is the First Step to Financial Success.
I’ve been wanting to do a bit of a summary post for a while now. Think of it more as an everything you need to know to keep your finances running smoothly post: a financial resource post. Or maybe it’s just a better way for me to organize all the posts on the blog. Whatever the reason, I hope you can use this post as a reference guide to help you find exactly what you’re looking for here on The Cash Dad.
Start With the Basics.
If you’re just starting out on your financial journey, or if you’ve decided now is the time to take control of your finances, the first thing you need is a budget. All a budget is, is a plan to spend the money you have. Maybe you’ve been spending more than you have, or maybe there’s never enough money to last the month. Your plan hasn’t been working. So try a new one.
Once you’ve instituted a budget and you finally have some margin in your finances, you need to save some money for an emergency fund. If you don’t have any money set aside for a “rainy day”, you’ll just end up back in debt when something comes up.
I’m sure you’ve heard or read the statistic that 40% of Americans couldn’t cover a $400 dollar expense without selling something or going into debt. Don’t be a statistic. Save that emergency fund!!
There is a great financial resource available over at Rockstar Finance. They send out a great daily e-mail that contains only the best of the best curated from hundreds of personal finance articles. I would encourage you to subscribe for this added content.
Don’t forget to subscribe to the Cash Dad as well.
You’re On the Right Track.
Now that you have a budget and an emergency fund, you’re better off than the majority of Americans, but there’s still more to do.
You have debt to pay off, and behaviors to change.
Learn how to pay off your debt with this post about the snowball and avalanche method.
You can also start to adjust some of your financial behaviours and actions.
Cut down on your impulse spending.
Don’t get suckered into the payment syndrome lifestyle. This is a really dangerous way of life.
If you want to start to trim your budget to save even more, check out these posts. You could save money on food, housing, cable, and even your cell phone bill. There’s also a post on the miscellaneous budget category, otherwise known as the catch-all bucket of out-of control spending.
- Food: Your Grocery Spending Can Quickly Destroy a Budget!
- Housing: How Much House Can I Afford with a Mortgage?
- Car Costs: Your Car Costs are Destroying Your Ability to Get Rich!
- Cable: How Much Do You Pay for Cable? Too Much??
- Cell Phone: Is Your Cell Phone Bill Ruining Your Monthly Budget?
- Miscellaneous: Do You Want Budget Chaos? Spend Miscellaneous-ly!
Invest In Your Future.
Now is the time to think about buying a house or maybe paying off your mortgage. You should also be investing for retirement in some form or another.
25% of Americans have nothing saved towards retirement!! That’s scary and appalling. I’m sure there are many reasons why this is the case, but you don’t have to be a part of this statistic either.
The power of compounding is amazing. Don’t wait too long to start to save and invest. Actually, the sooner the better. As time is the biggest factor in building wealth.
Instead of spending your money, why not let your money work for you?
The first vehicle that I would recommend is your company’s 401k or similar that your employer offers. And if they match any of your contributions, great! At the least, contribute enough to take full advantage of their match.
Then you could either max out your pre-tax contributions ($18,500 for an employer sponsored plan in 2018), or contribute with after-tax money ($5500 for an IRA) to a Roth IRA. There are some great articles detailing the differences between the two. I would recommend this article by Jason over at winningpersonalfinance.com
I’m on Auto-pilot. Now What?
What do you do once you have your finances under control?
Your budget is in place, and it seems to be working well. You spend roughly the same amount each month on the same stuff: food, utilities, gas, etc.
You’re investing a set amount in debt payoff, retirement, and savings each month.
It’s in a word: boring. Don’t be lulled into complicated schemes though. Remember to K.I.S.S.
Take Your Automation to the Next Level.
If you haven’t automated it yet, now is the time. Auto bill pay? Sign me up.
Automatic payroll deductions for savings or retirements accounts? Set it up and start rollin’ in the extra time.
Trim a Few of the Excess Budget Categories.
Things are going well, but you still feel like you’re overspending in a few categories. It’s nothing earth-shattering. But it’s just a few extra transactions each month.
Think of this more like fine-tuning. A pull back on a few categories.
If you pay attention to it, it will thrive. And now that the mess is cleaned up, you have some time to pay attention to those little annoyances.
Set Aside Some “Play” Money.
Find a few extra dollars here or there for some extra investing in perhaps some higher risk commodities. This is the kind of money that you would be ok losing. But it’s more for fun. Just to see if you could make something in the cryptocurrency market or maybe peer-to-peer lending. There are a ton of other high risk investments that you could play in.
You could start a blog. I think everyone has a story to tell. You just have to cultivate that storytelling style and up your grammar and writing game.
When I was younger I hated writing. Mostly because it was always on paper and I had to write about topics I didn’t like. But now that I can write about whatever I want, I think it’s much more relaxing and enjoyable. I know that my high school english teacher reads the blog. I hope my writing has made her proud. 😉
Whatever use you find for this “play” money, use it for something that not only makes you happy, but also can possibly earn you more money.
Give, Give, Give!
And lastly, give away some of your wealth. Giving has the added benefit of blessing not only the person who receives your gift, but you also. Being able to help others is fulfilling in a way that nothing else is. Learn to be generous, and give of your abundance.
And don’t forget to teach your kids about the above lessons. Budgeting, saving, investing, and giving. Hopefully they pick up enough information that they can succeed with their money as well. If not, you could always point them back to this financial resource.
Just in case you were counting, there are links to 19 other great blog posts here on the Cash Dad. I hope that you find this financial resource entertaining and useful.
Where are you in your financial plan? Are you still trying to get on track or are you on auto-pilot?
Leave me a comment and let me know what you thought of this post. Thanks for reading, and please share it as well.