23 Actionable Steps to get financially fit this weekend

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1. Never lose money

2. Remember step 1

Warren Buffett

Yes this one is cheating. No I don’t really care.

Warren Buffett’s advice applies to everything you’re using money on. 

If you’re investing you want to invest in something that won’t lose you money.

If you’re making a big purchase this weekend and it adds real value to your life you’re not losing money.

You’re adding value.

I know this runs contrary to a lot of personal finance blogs that say you should all live like urban monks and the only fun you can have is hiking or riding a bike.

That may work for some people but it’s not the reality for most.

If you’re tired because your kids won’t stop running around and screaming and you hire a babysitter for an evening to go on a date with the spouse or for drinks out with the group, don’t feel guilty.

You deserve the break.

Just make sure you’re not too hungover when your kid goes to wake you up the next morning at 5:30am.

3. Calculate your net worth

We can do this the easy way or the hard way.

The hard way?

Go to excel and make a new spreadsheet.

One column for liabilities, any money you owe, credit card debt, student loans, your mortgage.

Another column for assets, anything worth money like stocks, home, savings accounts, etc.

Net worth formula: Add up your assets and subtract all your liabilities.

Don’t want to deal with all that? I hate starting an excel sheet from scratch as much as the next guy.

Looking for the Easy Button?

Sign up for Personal Capital.

You can track your net worth for free.

You can link any bank accounts, credit card accounts, etc and it will update everything for you.

All you have to do is periodic check ins.

4. Start or update your budget

Start a budget if you don’t have one. Update your budget if you do.

Track your daily spending if you need to get that under control.

Check that your monthly bills and earnings are correct. 

If you want a budget template you can find one here.

5. Increase your automatic savings

Remember step 1, never lose money.

Automatically move more money directly into your savings or investing accounts and your spending habits will adjust. 

Out of sight out of mind.

Just don’t raid the cookie jar for a new pair of shoes.

6. Earn a promotion at your job

Good luck with this one.

No seriously, bosses can suck. If you’ve got a good one you’re lucky.

Find out the average salary in your area for your position and experience.

If you are a salaried employee and you know how much your company charges for your time, figure out how much you are worth to the company.

Multiply your billable hours for a week (usually around 40) by the rate your company charges. Multiply that by 50 if you get 2 weeks vacation.

This number will be a lot higher than your salary.

Divide that number by 3 and see how that compares to your salary. 

The amount of profit and overhead that a company makes will vary, but if your salary is way under the number from above you might have some room to negotiate a raise.

Without taking anything else into account, this is a hard number that you are worth to the company.

If you bring in business you are worth even more.

If you bring in business you should at least be getting a commission.

To learn more about getting a promotion, check out these 13 tips from the Muse.

7. Up your 401k investments

Again remember step 1.

If your company matches 401k investments and you’re not automatically investing up to the match limit you are leaving free money on the table.

Don’t lose your free money. 

If you are at or above the company match limit but not the annual contribution, think about increasing your 401k savings to benefit from tax advantages.

As of 2019 the annual maximum 401k contribution is $19,000.

8. Cook your lunch for the week and pack your lunches

Cook batches of rice, grains or put together salad kits.

Or if you’re not a rabbit cook a bunch of chicken and burgers.

Focus on prepping items that you can store for the week.

If you eat meat save a little extra from your dinner, grab your prepared grain and salad and you won’t have to buy lunch the next day.

Making small changes to your savings will add up to big amounts in the future because of compound interest.

Check out this calculator to see how much your daily lunch or even coffee habit turns into in the long run.

9. Think of yourself like a business

This might be a mindset shift for you.

An example is how your local coffee shop runs and stays in business.

They make money by selling coffee and pastries.

Every month they have to pay rent, employees salaries, buy the coffee and pastries (or ingredients) maintenance on equipment, etc.

They also will get creative to find other ways to earn money.

They charge an artist a fee to hang and sell their art on the wall. The fee might be a percentage of the sale when they sell their paintings.

They work with a local coffee roaster to develop and sell their own brand of beans.

After starting their brand they sell T-shirts, mugs, and coasters.

They make a sale to local businesses to provide coffee and breakfast for their weekly meetings.

Apply that type of thinking  to your personal situation.

Instead of selling coffee your income is your job. 

9am-6pm if you’re lucky, Monday through Friday and sometimes on nights and weekends for a regular paycheck.

Your “business expenses” are rent, electricity, cell phone bill, internet, any debts, etc.

For a business to run and be profitable they have to earn more than they spend.

To get rich you also have to earn more than you spend.

10. Find ways to buy your time back

The coffee shop owner probably hires young hip people to run the shop.

It might be worth your time to hire a nanny, cook, maid or someone to help with yard work or cleaning the pool.

Doing everything yourself will save the most money.

Hiring someone else will save you the one thing you can’t get back: Time.

At your job you are already trading your time every day for money.

But when you outsource you trade your money for time.

You probably already trade money for time without thinking about it: how much time does the dishwasher save you every day? Or even the washing machine instead of doing everything by hand?

How much time would you save if you didn’t have to clean your house every weekend and could just keep it tidy during the week? 

You could even hire your kids to do chores for an allowance and start teaching them about money and responsibilities.

Think of it like promoting from within the company.

If you really want to teach them a life lesson also teach them about taxes. 

You’re paying your kid $20 a week to do chores? You work that out but actually give them $15.

Keep the other $5 as “taxes” and put it into a savings account or investment account so they don’t spend it on games and toys.

11. Figure out interest rates on any debts and how much you can afford to pay the highest interest debts off

Look at your monthly debts on your budget. 

Are any of them high interest that you can start paying off?

Income is only half the equation when calculating your net worth.

How much money would you be able to free up every month if you didn’t have to make payments to your credit card, student loan, etc?

It might be worth sacrificing a little extra money today to free up a lot more in the future.

You can use a debt snowball calculator to help you figure out when your debt will be paid off and how much in total you are actually paying with interest.

12. Create small accounts for annual spending

This goes back to the out of sight out of mind strategy. Automate what you can.

Create multiple savings accounts for items that you know you will spend money on. 

Have your rent money transferred automatically to an account called Rent, then have the account automatically write and send a check to your landlord.

Set up an account called Gifts and contribute a small amount each month that you can use for birthdays, holidays, etc.

Set up an account called Travel and every month set aside a small amount so you’ll be ready to go when you see a deal on an awesome flight.

Then move what money you spent from the appropriate savings account back to your checking to pay it off.

13. Start a side hustle

There are many side hustle businesses that you can start in your spare time. 

You can take what you already do at your normal salaried job and find clients that need your help.

Or you can start a blog to teach people about your profession.

Example: An interior designer can go look for clients on her own or she can start her own home decor blog.

Blogging takes time and dedication. It is a different way of looking at your profession because you will be writing a lot more than you’re used to.

You can also do yard work or clean pools in the summer and shovel snow in the winter or walk dogs for people just about all year.

Better yet you go out and find a bunch of clients that need their yards done or their pools cleaned then you go hire a bunch of young people to do the labor.

I met one person that was a dog walker in NYC. He would go rent a van, collect all the dogs from his clients. Then he would take them all to a giant park where they could run and he could sit back and drink some coffee and read the paper.

If you’re not ready to start a small business you can teach English online, become a virtual assistant, become a personal shopper, drive for a ride-sharing company, run deliveries and errands for people through apps.

Just know that any of those options you’re still trading your time for a little extra money. It’s basically a second job.

14. Invest profits from your side hustle

You put your money to work by starting a side hustle.

Now the money you earn from your side hustle can get to work too.

First use some of the income to grow your business.

See what is working and what isn’t in your side hustle. 

If you’re getting most of your business through social media, invest in growing your social media presence.

If you have a side hustle walking dogs or yard work you can hire someone outsource your workload while you work to get more business.

Remember to pay yourself and invest that money in stocks, real estate, loan it out, etc.

15. Set dividends to auto-invest

This should be a simple setting to toggle through your brokers website.

If you’re investing in stocks and getting a dividend you can use that money to automatically buy more shares in that company.

If you would like to learn more about dividend investing sign up for my course and learn how to make a passive $1000 every year.

16. Sign up for life insurance

Protect your current income from unexpected circumstances.

You can roughly estimate how much life insurance you need by multiplying your annual salary by 25.

I’d recommend getting the cheapest one.

Basically the amount you need is enough to replace your income for your family if you die. 

If you’ve really got money you can look into life insurance policies that you can use as a retirement account. But don’t sign up for these unless you can make the investment for several years.

I’m speaking from experience on this one.

If you want to compare rates this website is a good resource.

17. Organize your closet and sell your stuff

The Joy of Tidying Up and Marie Kondo had their 15 minutes of fame.

It’s helped people organize their stuff through the book and through the show.

I threw out a jacket that no longer “sparked joy” whatever that really means and the next winter I was like, damn where’s my blue jacket?? I guess I’ll wear the other one.

You probably have clothes, shoes or bags in decent condition that you aren’t using.

Donate them to your local Goodwill.

Or for a little pocket change sell them on Amazon or Craigslist.

There are also apps, like Poshmark that will help you sell your things.

18. Analyze and optimize your investments

Back to Rule number 1.

See which investments are making you money.

If it’s a side hustle, invest profits back in to grow it.

You have rental income? Think about how to purchase another unit.

You have money in the stock market or cryptocurrency? Buy more.

19. Check your debt to income ratio

To figure out your debt to income ratio use the numbers from your budget. 

Divide your total monthly income by your total monthly debt.

This number is used by banks and other lenders to help determine whether or not they’ll give you a loan.

It’s your ratio of money coming in versus money going out each month.

The lower your number, the more likely you’ll have enough income to pay back your loan.

The more likely you’ll be able to borrow money.

20. Set up automatic savings to save for a big purchase

Similar to the exercise earlier of setting up accounts for regular purchases, you can also set up an account for a big purchase like a property that you’re going to rent out.

Use your budget to figure out how much you can regularly contribute.

Set up a savings account and set up an automatic deposit. 

When you reach your goal go make your purchase.

21. Find cost friendly alternatives to regular spending

Mobile phones, internet, cable and electricity are common bills that you might be able to lower.

There are numerous streaming options out there that can replace cable.

Sometimes it ends up cheaper to just pay the cable company instead of signing up to stream movies and TV shows and sports and kids channels.

Everyone has their own streaming app these days.

One day someone will come up with an app that puts all these individual apps together and pays the networks so you the customer can watch whatever you want from one app.

Maybe they’ll even call it Cable.

You can also look into cheaper cell phone plans.

There are a number of carriers, one I currently use is Ting. Don’t worry if you haven’t heard of it. When I went to Best Buy to get a new Sim Card the worker looked at me like I was speaking another language.

They run on either the T-Mobile or Sprint network depending on the SIM card in your phone. Newer phones you can choose.

You only pay for what you use, so every month your bill is a little different. 

My wife and I combined usually pay around $100 monthly. She likes to use a lot of data and I don’t.

Ting has a calculator on their site, you can plug in the amount of minutes, texts and data you use to see if they would save you money.

When I plugged in my numbers I was saving money so I signed up.

My brother plugged in his numbers and didn’t save so he’s still on his unlimited plan.

22. Talk to your partner

It will be very hard to plan for your future if your partner is not on the same page.

Or if they have no idea what your financial plans are.

Periodically check in with your partner and make sure you are both comfortable with your financial decisions.

But be realistic. If one is a spender and the other is a saver, maybe set up a monthly spending account. Don’t cramp each other’s style.

23. Update your goals and find a path to get there

Adjust where your savings are going based on your current goals.

In the beginning you might be saving all your money in an emergency account.

Then when you reach an amount you can fall back on that money still gets set aside but now you invest it.

Wrapping Up

If you’ve made it this far, well done. This feels like a long list post and I hope there are a few points and tips you can take away and apply to your life.

Remember though that all these ideas are worthless. It’s only taking action and the execution of these ideas that will make a difference.

If you’re ready to really jump start your stock market investing check out my course on how to earn $1000 annually through dividend investing.

If you’re not quite ready to pull the trigger and put your money to work and want more help organizing your finances, here’s a much cheaper budget instead.

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