Get Good with Money: Ten Simple Steps to Becoming Financially Whole

by Tiffany Aliche

I learned that things cost money and that the choices I make have a direct impact on my quality of life. In other words, there is no such thing as a small financial choice. We each must learn how to weigh our short-term desires against our long-term goals. The question is, will you choose water or ice cream?

once I was able to let go of the shame of my financial mistakes I was able to focus on solutions.

“When you teach, you learn twice.”

wealth is more than just money in the bank!

Financial wholeness is when all the aspects of your financial life are working together for your greatest good, your biggest benefit, and your richest life.

Here are the ten steps:

1. Budget Building: Learn how to create and semiautomate (automated transfers, bill pay, etc.) a personal budget and open the necessary checking and savings accounts to support your budget.

2. Save Like a Squirrel: Calculate your savings goal number that’s needed to meet at least three months of essential expenses for your household. Then calculate how much you need to save in each ...

3. Dig Out of Debt: Get a clear picture of who and what you owe by writing down the components of your debt (i.e., amount owed, interest rate, due dates, etc.). Then choose a debt repayment strategy and use your bank’s online bill pay to automate your payoff plan.

4. Score High (Credit): Request your free FICO credit report and score to see where you stand.

increase it to 740 o...

5. Learn to Earn (Increase Your Income): List all the ways you’ve contributed value at your job in the last few years to...

Invest Like an Insider (Retirement and Wealth): Identify your retirement and wealth goals. Create and implement your investment plans with the help of your Human Resources representative, a certified financial planner, online tools, or by yourself.

7. Get Good with Insurance: Make sure you have proper insurance coverage. That means understanding and calculating your needs around health, life, disability, property, and casualty (e.g., home and auto).

8. Grow Richish (Increase Your Net Worth): Learn how to calculate your net worth (owning more than you owe) and how to achieve, increase, and maintain a positive net worth.

9. Pick Your Money Team (Financial Professionals): Find reliable and trustworthy financial professionals (i.e., certified financial planner, insurance broker, estate planning attorney, certified public accountant, etc.) and identify accountability partners.

10. Leave a Legacy (Estate Planning): Create and implement a plan for what will happen to your estate (cash, real estate, jewelry, and other assets) after you pass.

The first five steps cover the fundamentals. Their purpose is to help you create financial stability. Think of these steps as your foundation. The trick is to get to a point that budgeting, saving, debt, credit, and earning become second nature so you can focus most of your energy on the next five steps.

Steps six through ten cover growing and protecting your wealth. They are presented in order to show you how to invest, align your insurance, grow your net worth, seek professional help, and protect your legacy.

I’ve learned that some of my life improvement plans should be shared on a need-to-know basis, and not everyone needs to know!

Prioritize faith over fear and believe that you can get where you want to be.

Bottom line: If you try to get sneaky and not list little side expenses (your guilty pleasures), you are only cheating on yourself. And you deserve the best budget possible. Do you really want to settle for less when more is right at your fingertips?

Celebrate the awareness. Practice celebrating that you know something new about your money, whether it’s good or bad. New knowledge means new action can be taken and new action leads to new and better outcomes.

If you want to ensure that you save each and every month, make saving a bill. After you complete and update your Money List, you’ll have a clear understanding about how much money you have available to save each month. Make that amount an expense line item on your Money List. When you manually or automatically pay your bills each month, make sure your new savings bill is first in line. Do this and you won’t have to wonder what happened to your money again.

Need it? Love it? Like it? Want it?

The ideal savings account is one that earns as high an interest as possible, prevents instant access, and keeps your money safe. The type that checks all these boxes is an online savings account.

The Do Here are the four Do’s you’ll need to dig out of debt: 1. Identify your debt. 2. Restructure your debt. 3. Choose a paydown plan. 4. Automate the paydown plan.

“I’m going to need you to know me before you need me.”

Some companies like AMEX and Chase have very specific rules about the number of inquiries you can have during a period of time, and they don’t mess around—they will deny you automatically no matter what your credit score is if you’ve surpassed that number.

Think of it this way: In the beginning, you can look like a business or you can be a business. Looking like a business is like being able to say, “Oh, I’ve got the website and the pens and business cards. I have an office space, I’ve got stationery.” With these things you might look like a business, but that doesn’t mean that you actually are a business. Having pretty things doesn’t mean you’re making any money. Being a business is when you’re getting paid for your product or service.

Here are the four Do’s necessary to get started on investing for retirement: 1. Determine how much you need to save for retirement. 2. Decide where to put your money. 3. Choose your investment mix/asset allocation. 4. Set up automation and limit your withdrawals and loans as much as humanly possible.

If you want to be a little more than averagely aggressive about saving for retirement and possibly retire early, the simple math is to multiply your annual expenses by 25.

A person with 25 times their annual expenses invested for retirement will likely never run out of money, when retired, if they only withdraw 4% or less money from their retirement account to live off of each year.

If you’re not as eager to retire or don’t feel like you’ll need as much of a cushion, multiply your current salary (not expenses) times 12.

Hack #1: Capitalize on your job’s match and profit-share programs.

Hack #2: Make your retirement goal to have 25 times your expenses versus income.

Hack #3: Make your retirement goal to have 12 times your income instead of 25 times your income.

Hack #4: Increase your savings rate by making more. The more you can make, the more you can save.

Hack #5: Utilize a Roth IRA if you’re eligible. If you’re able to qualify for a Roth IRA (more on what this is and how to qualify coming up), definitely use it! With a Roth you’ve already paid taxes on the money you’ve contributed to this retirement account, so that means you can withdraw it tax-free during retirement.

Hack #6: Invest a lower annual percentage of your income for retirement.

Hack #7: Consider the retirement package being offered when choosing an employer.

Life insurance is intended to protect your income-earning years. It’s also there to cover any major debts your passing may leave behind. If you have someone financially dependent on you, or your income supports the household (whether it’s your direct family, your extended family, or others you help), you want to make sure that there’s some safety net in place for them if you pass prematurely. That safety net is life insurance.