You may just end up with an extra $10,000 because of it. ![]() If there’s anything that can make saving sound sexy, it’s this.Īnd if you haven’t read my post about the beauty of compound interest and how this little exercise may convince you to give up Starbucks and monthly mani/pedis, I highly, highly suggest you read it below. May I suggest this blog post about the joy of when less is enough and how to essentially convince yourself that your life will be better if you don’t reward yourself constantly and mindlessly with restaurant food and shopping sprees (to the point of dulling your pleasure centers). If you track your accounts/net worth over a few months and notice your net worth is getting lower over time, you need to make some serious adjustments to your spending. You could be consistently dipping into your savings without even realizing it if you’re spending on a credit card, or at the very least, you may be spending money you had intended to save. *If you have a lot of investments and the market's really down one month, that could also account for a dip. This is, in essence, why this exercise is so important. If your value is going down over time, that means you have a negative cash flow.* In other words, you’re spending more than you’re making, and/or living paycheck to paycheck (maybe without even realizing it). Make sure to total all your accounts so you can ensure your net worth is, in fact, going up every month. Total the entire column of accounts once you’ve noted down the balances. I pay rent on the first too, though, so the money usually hasn’t cleared out of my account when I take down all the numbers (which is kind of cheating since it makes it look like I have more than I do, but hey, it’s MY system!). Since my budgets reset on the first of the month, I do my full assessment on the first of every month. Pick a consistent day to check all accounts. We’ll get into the accounts in a moment, but let’s talk for a second about setting up your system. The system that has worked well for me (again, control freak) is a Google Sheet. I want to know how much I’ve got, where it lives, and how fast it’s growing. Maybe it’s the control freak in me, but I’m obsessed with full transparency and knowledge of my #assets. I’m talking, of course, about tracking your net worth. Devoting an hour to setting up this system and then 15 minutes once a month to maintaining it could mean the difference in hundreds of thousands of dollars (literally) in 40 years from now. If you're like, "But KG, I don't even know where to start," fear not! I want everyone to get on the same page with this very easy first step. spending (i.e., your cash flow), you may be in for a rude awakening. If you don’t know how much money you’re taking in vs. I don’t want to scare you (maybe I do a little bit), but in order to build true wealth, you have to start right now. These are the types of things I want to share with you-from the most basic to the most radical.īecause after all, your money in your savings account(s) is losing at least 2% a year to inflation. Yes, it's possible, and people are actually achieving it. My latest exploratory obsession can be attributed to my friend Landon, who's gotten me into the "Financial Independence" craze: extremely frugality for about 10-12 years and retirement in your early to mid-30s. The personal finance community is an interesting one. I want all of us to learn (together) about investing, saving, workarounds, hacks, and other money savviness that’ll help ALL of us get rich someday, so we aren’t working for paychecks in our seventies because we didn’t think to contribute to our 401k or open a robo-investing account. I merely feel strongly (very strongly) that money apathy or ignorance in your early twenties is an alarmingly avoidable way to make your life 20 years from now much harder. I don’t know your situation, and I’m not a guru-I’m not trying to prescribe you a one-size-fits-all solution. ![]() Maybe you’ve got $100,000 in student loan debt. I cannot overstate the importance of having your financial shit together, and that has come more clearly into focus over the first year of my adult, working life.Īfter delving into this financial world of books, podcasts, and blogs galore, I’m learning so much information that I feel morally compelled to share with all of you. ![]() ![]() Plain and simple, I firmly believe the money decisions young people my age are making right now are literally going to affect the rest of their lives. I know a lot of people are probably wondering why my blog has essentially derailed into a personal finance fiesta-how does one go from posts about hydration and feelings to compound interest and index funds in one fell swoop?
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