how to set money goals
Welcome to Spring! I couldn’t be happier about this amazing weather in NYC.
Today, I am coming to you from my roof deck, where I just finished an amazing workout of my own after I trained a client up there. (I show you 4 of my favorite workout moves right in the beginning of the vid!)
Have a look, then keep reading, because I am introducing you to my friend and Financial Freedom Coach, Karie Hill. What I love about Karie is that she gives it to you straight, but it’s like talking to your best friend who just happens to be an expert when it comes to finances.
Is your best girlfriend a money expert? If she is not, meet Karie. She is about to serve you some money 411 with a dose of love.
Your Top 2 Juicy Money Questions
by Karie Hill
Q: How do I put myself on a budget?
A: Why do you want to create a budget? Just saying you want a budget is like saying you want to go on a diet. It usually doesn’t last more than a few days and you’re left feeling deprived and ready to give up.
To create a budget, or a spending plan, you have to dig a little deeper.
Are you…
- Overspending
- Living paycheck to paycheck
- Wanting to save more
- Tired of being in debt
If any of these scenarios apply, look at why you’re overspending. Are you bored, lonely, stressed?
Are you living paycheck to paycheck or in debt because your living expenses are too high or you’re not getting paid enough at work.
Why do you want to save money? A new house, emergency account, pole dancing classes, a great vacation…
Get specific on how much you need and write out the actual dollar amount for your saving’s goal.
When you get clear on why you want to create a budget and what you want your life to look like, sticking to a spending plan or budget is so much easier and a lot of fun (Yes, it really can be fun!).
Q: What do I with this chunk of tax money?
A: It’s that time of year and I’ve been getting lots of questions about what to do with the extra money.
Our first instinct is to throw it all in savings or put it all towards our debt. Here’s what happens –
You don’t leave any cushion for things that come up outside of your normal monthly expenses. As a result, you end up taking from your savings or forced to use your credit card.
Here are 3 things you can do to plan the best way to use that money:
1.Look ahead the next 4-6 months. Make a list of upcoming birthdays, parties, showers, weddings, or trips that you’ll need money for and write out how much you’ll need for each thing.
Deposit that amount in your checking account so when those expenses come up, you’re already ready for them.
Depending on your financial situation, you can divide the rest between high interest debt and an emergency savings.
2. Pay off debt with high interest
More than likely, you have a few credit cards with a balance. Look at the card with the highest interest rate and put part of the money towards your debt.
You can also do this with medical bills, personal or student loans.
3. Put the rest towards your emergency savings account
It’s important that you have back up money in case you ever have an unexpected medical expense, car repair, appliance breakdown…
If you haven’t already built your emergency savings account, you can use the rest of the money to go towards this account.
Anytime you ever get extra money, the key is always planning ahead.
Karie Hill is a financial freedom coach, speaker, and writer who believes financial freedom is one of the greatest gifts a woman can give herself. She teaches smart women how build healthy, wealthy money habits, remove their financial barriers, and create the kind of life they really desire. If you’re ready to ‘date’ instead of ‘hate’ your money, head over to http://kariehill.com and get her FREE guide.
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What’s the best way to invest the money in my Roth IRA? I’m a very conservative spender, which means I have no debt (aside from car payments), but it also means I’m afraid to risk investing my money in the stock market, which screwed me once in the past. Is there a safe way to gain some moderate interest in a steady manner so that my money grows over the next 20-30 years and I won’t risk losing it all in the market?
Julie, a lot of people are feeling the way you do. Here are a few options –
For any type of long term planning, depending on your age, it is best to have a diversified portfolio that includes stocks. That type of investing is NOT for someone who is looking for anything short term (less than 5 years) because it is risky. For long term planning, 20-30 years, the stock market will give the best return but you can’t stress over the short term losses because more than likely you will recover over the long term. Again, when things are diversified based on your age and retirement goals, you’re far less at risk.
Find a financial planner that you can trust to walk you through this. Get a referral from a family member or friend.
Another great long term option that’s less risky than the stock market is real estate. Now is such a great time to invest in that.
For short term goals (5 years or less), cds and money market accounts are a great option.
One more… Ramit Sethi’s book, “I Will Teach You To Be Rich” gives a great way to invest on your own that doesn’t take a huge chunk of money and is based on your age.
I am thinking of working with a financial planner to help me figure out my credit card debt, current spending habits, etc. What is your recommendation in the process of finding a financial planner? Should I just use what it is offered through my TIAA-CREF? Or should I hire someone? What about with credit counselors? What type of questions should I ask in helping find the right fit?
Hi Laura, I wouldn’t recommend seeking out a financial planner for debt reduction and current spending habits. It’s normally not their specialty and I would save all the long term stuff for them. If you want to talk more about debt reduction, you have a few options – You can seek out a financial coach that specializes in that (like me) or research debt management plans (pros and cons to that). Make sure any credit counseling company you go through is reputable and non-profit. When it comes to debt, there’s often more to it than numbers on a credit card and it’s best to find a holistic solution that’s going to not only teach you how to get out, but stay out and learn healthy spending habits. As far as any long term planning right now, if you feel comfortable with your TIAA-CREF definitely check out their services otherwise ask trusted friends or family members if they can refer a financial planner.
Good questions!!!
Hi Erin, I don’t have a question about Money right now – I”m leaving a comment to say THANK YOU so much for sharing your rooftop view!! It’s been almost two years that I left NYC to work on my public art project, the Mass Manifesting Mobile — it is creating a lot of powerful MANIFESTING ENERGY because of everyone who is sharing their intentions.
Seeing you look so fabulous, sharing such awesome energy & seeing the city that will always be home is an amazing gift, thanks!!
Magic Passion Love & March Money Month!!
Great money tips. I could definitely use a trick or two right now.