Helping women create a financial system to rebuild confidence and focus in the midst of loss or life changing events.
As women, we are constantly evolving. We change, and the circumstances around us change. With many changes comes the need to shift course. Here at The Wealth Edit, we call this “pivoting”. A pivot can be changing course because of a loss, such as with death or divorce, or simply because we want to make a change in our lives. Do you have to go back to work after a divorce? Change jobs because of a toxic environment? Head back to work after your kids leave for college? Each of these are common pivots, we women, often face. Even though we are surrounded by change, it can often cause anxiety and uncertainty. You question your ability to take the leap out of your comfort zone.
How do finances play a role in your ability to make a pivot? The Comeback Theory is a course we created designed to walk you through the process of a pivot and encourage you along the way as other women walking similar paths share their journey. It is a step-by-step guide of how to evaluate your finances to see if you are on track.
Although everyone’s journeys and pivots are very different, the same truths hold true. A pivot can be really hard at times but the reward at the end is totally worth it. Knowing that you pushed yourself to do something out of your comfort zone can be a little addicting so beware – once you start you may not be able to stop!
In this blog, we will explain more in detail Foundation 1: Practical Financial Habits.
Foundation I: Practical Financial Habits
Most of us go into adulting with very little financial education.
This means we hit our twenties and we don’t know what we should about building credit, managing debt, or saving money. The good news here is it is NEVER too late for a do over, and if you are in your twenties, you can change the entire trajectory of your wealth by developing a few good habits.
1. Take some time to create vision around your money.
Have a financial DTR. Maybe you don’t have much, maybe you have a ton, but the amount doesn’t really matter. What is your relationship going to be with your money? Why is it important to you? Whether you like it or not, you will be in a relationship with your money for the rest of your life, so get comfortable with your money. This doesn’t have to be a “one and done.” Revisit this idea often, because it could change as your life changes.
2. Self-control is important.
Chances are, you lived fairly simply as a college student. Why does this need to change? Pretend like you are still a student – you paid rent, you paid dues, you paid bills, you went out with your friends. The only difference now is you have a paycheck. Try to live as simply as you can, so you can afford the things that are really important to you. Always live within your means and be content.
3. Know where your money goes.
This goes back to the relationship point, but honestly, you need to basically “YOU” your money, at least for a period of time. Stalk your money in whatever way works for you. For me, I have found writing down everything I spend for one week a month is really helpful, and enlightening. The main point of this is so you don’t overspend, and you are making conscious, relevant choices about the way you spend your money.
4. Don’t leave money on the table.
Many companies offer matching programs if you participate in the 401k. If 3% sounds like a lot of money because you are living paycheck to paycheck, start with 1%, then if you didn’t feel it, go back to your HR Director and ask them to raise your withdrawal to 2%. When you get a 2% raise, instead of pre-spending it, consider allocating that additional 2% to your 401k. Remember the company match isn’t the ceiling, you can put away a ton of money for yourself through retirement savings vehicles like a 401k.
5. Spend purposefully.
Big middle-aged regret here. I don’t even remember how many J.Crew boxes came to my office in my twenties, but it was way too many. I did look adorable, but still. Hindsight being 20/20, I would have started building a wardrobe of really nice pieces when I didn’t have many obligations. You are in your twenties so of course you are cute. It doesn’t matter what you wear!
6. Have ONE credit card and pay it off every month.
For larger, more splurge-worthy purchases use your debit card. You don’t want to mentally get used to a higher credit card bill because this will lead to spending creep. Whatever points you accumulate won’t be worth it, unless of course you transfer the money off bill cycle immediately following a larger purchase.
7. Pay off your loans.
Try to do this as aggressively as your budget allows. If you have $140 at the end of the month, transfer it to your lowest balance loan, and keep chipping away at that one, because you will make the biggest impact, and it will give you motivation to keep going.
Interested in learning more? To get a deeper dive, contact us to learn more about The Wealth Edit Membership program.
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