Intro to Financial Independence- Top 5 Habits to Adopt Right Now

1. Introduction: Hello, everyone. My name is Sabrina, Ana Maria, and I am a certified financial education instructor. Essentially, that just means that I am trained in helping people become financially literate. The definition of financial literacy is the possession of a set of skills or knowledge that helps in individual make informed financial decisions pretty much the basics of how to deal with your money and how to be successful. Now that you know a little bit about me, let me ask you some questions. Are you confused to why you haven't reach your financial goals yet or have you not even created them yet? Because you don't even know where to start? I most importantly, do you want to become financially independent? If your answer was yes to any of those questions, then keep watching this video. We're going to be learning five habits to become financially stable and financially independent, regardless of your age, or how much money you have. Now, let's just get right into it because I was super excited 2. 1) Automate Your Savings: the first half of that you need to adopt is automating your savings. Now, I'm not saying that this is your top priority and that 50 to 75% off whatever you make is going into savings. But you do need to consciously think about how much will be going in there. The first way you can automate your savings is through pre tax dollars through a 401 K or a retirement account. If your company offers a 41 K benefit, what you can do is before taxes get taken out of your paycheck, you can have it go towards your retirement account. For me, this is my favorite and most easy way to save just because it's getting saved before I even have a chance to spend it seriously. You could be a millionaire in 30 years, just based solely on your four away. Okay, look it up on Google. It is definitely doable to search for one came Millionaire by 30 or just 41 K millionaire, and it will tell you the breakdown, how you become a millionaire. It's definitely doable. The second way you can save after that is through payment elections payment. Elections are essentially where you elect to receive payment. So you might just have one checking account that you're having your money direct deposited or some companies will let you have two or three. When I used to work in retail, I only had two. So what I did is just do a strict 90% in my regular checking account and a 10% in my savings account. And now the company that I work at currently, let's we have three, so I have to separate savings account 14 more temporary short term. I want to go on a chip type of savings, and the other one is for my long term that I don't touch. I really like this method because just like the 41 k the money hasn't got to yet. You haven't been able to decide where you're going to spend it. It's already going into savings to create that safety net for you. In case you need the third way you can automate your savings is through automatic transfers , which is, I think, whatever one thinks at first when I say automating savings, that's just having $25 from your checking going to your savings or whichever account that you're using, but its automated and the bank does it for you. The last way you can automate your savings is with digit this a little bit different because you are not sitting the amount of money that's getting transfer and you're not setting the amount of transfers. Essentially, you give digit access to your accounts, and what they'll do is using their own algorithm. They'll decide how much money that they could put away in savings. For you. It's essentially, if you had $1000 in your account, they might think, Oh, she conspired. $10. I'll take that and put it in her little digit savings account or you might have $10 in your account and maybe they'll take out a set. I remember when I first started using digit after six months, I had about $480. I believe in my account, and I was able to buy a brand new camera digit. I think it's great for people that are not necessarily used to saving, so they're not really accustomed to putting some money aside and making sure that stuff did . You will take care of that for you. If that sounds interesting to you, anything could be really helpful. Then use the link in my description and you will get a free $5 to start your account. 3. 2) Automate Your Bills: This second habit that you need to adopt is to automate your bills in this type of journalist, all of your bills and your recurring monthly payments on a sheet of paper. Make sure you have the dates that it comes out of your account and the amount. Get the total of all those monthly payments, and we'll be using that number in a little bit now. Also, want to ask how many of those payments are automatic If it's a credit card that's taking a minimum payment. If it's a subscription service, make sure you know which ones are automatically coming out of your account without you having to actually log in and make the payment. And once you know which ones are already automatic, which ones can be automatic? Because automating our bills, I swear, is going to be a lot easier for you on explain one in a little bit. Now, once you have all this information, what I want to do is automate as many as you possibly can. The first obvious reason why automating your bills is a great idea. Obviously you will not have a late payment is automatically taking the money out of your account and you're covered on that and you don't have to stress about coming in on the seventh or the eighth of the month and just making sure it gets done. And what if it doesn't get processed and it's coming out automatically? You are covered in terms of late payments. If you currently have trouble making payments or making ends. Me, I have a solution for you. I recently adopted this a couple of months ago, and it's been so much less stressful and a lot easier to Dio. So what I do is I oughta me all of my payments. And like I mentioned earlier, I totaled up that number. Let's say that number is 1000. I created a separate checking account that always has $1000 in it. So I have one checking account. It's just for my automated bills and have another checking account for spending. So when money comes in the door, I can look at that account and say, Hey, I only have 800 but I need to have 1000 in there at all times just to be safe. So when money comes in, I'll put 200 straight in that account, and that way I know that the rest is for actual spending. This has helped me so much because I'm not over drafting on my large payments. Especially for me. I have student loans that each one is maybe 300 to $400 a month, and those are things that I can't kind of keep track with my spending. So I like separating it, so I never overdraft. I know exactly how much money I have to spend because sometimes it could be a little deceiving. When you have one checking account you think you have, let's say $500 you may not be thinking in the back your mind. Hey, I also need to pay my $400 student loan payment on Friday, so definitely automate your bills. And if you want to go a step further and have a separate checking account and you think that would help you, then by all means try it. But of course, personal finances based on the individual and that's my belief, is that it might work for you, but it might not work for me and vice versa. 4. 3) Establish Your Priorities: habit. Number three is to establish your priorities and have a set of fail safe questions. When you're spending so first things first, I want you establish your priorities. Just you go by the year. Just in general. Let's say this year you want toe pay off your debt. You want to increase your savings, a certain amount. You still want to travel. Let's say those were three priorities. Or maybe it's just travel. Or maybe it's just debt payoff. Either Read those goals or priorities need to become clear because it's going to be super helpful in this step. Let's say you have a trip to go to your dream vacation that's going to Barcelona or some island vacation. That is what you want accomplish this year. And that is what you want to say for now that you have your goals and priorities in mind, we're going to talk about some questions that you might ask yourself before you spend money that you might not need to. For me personally, my first question that I ask myself when I grab something. Is this a need or a want? For my second question, I ask myself, Is it in my budget because for me, a priority is budgeting. So when I ask myself, Is this in your budget? And it's not. That's kind of making me think if it's a really important purchase or not, or if I can just let it go and then the last question that you're gonna ask yourself and these questions can be whatever you decide. Obviously, this is my set of questions, but by all means ask yourself anything that you want. But my third question is, Is this more important than paying off debt? Because for me, Depp health is my number one priority. So when I look at something as great as those pair of pants are, as creates, those dresses are as create as candy is or Starbucks. Is it more important, then debt pale or for you isn't more important than going on vacation. And that kind of puts things into perspective because you need to ask yourself these questions on every single purchase or as many as you can, because those little purchases can add up. So if I'm buying a Starbucks, you know that's 5 to $6 so I may think, Oh, it's fine. It's not gonna, you know, detract from my progress. But when I buy Starbucks one day and then the next day and the next day, it really adds up. So what you should be doing is for every purchase, regardless of how small, ask yourself these fail safes questions to make sure that you are spending your money the way you want to spend it. This really needs to dig into your emotions. But I truly, truly believe that if you follow this habit strictly, you will reach your financial goals. Because nowadays I'm not spending as much money as I used to, and I'm getting closer. And I think that ding into your emotions is so important. And personal finance People think it's just budgeting and following a plan. There's a lot of emotion that comes into it, and for me and for a lot of other people, if you have a spending issue in a certain category, you really need to put things into perspective and realize that those things aren't important. And here's a bonus tip. If you were perfectly willing to spend $6 on your Starbucks and you happen to convince yourself out of it with these awesome questions that you created for yourself. How about you take those $6 put it towards your vacation savings account or your debt account? Whatever you're using. But if you're perfectly willing to spend the $6.5 minutes ago, why do you just put the money aside and put it towards your goals instead? 5. 4) Increase Your Minimum Payment: The fourth habit that you need to adopt is paying 10 more dollars in your minimum payment. Obviously, I use the arbor train number of 10. But if you want to pay $50 more than your minimum payment, bio me. The reason why I'm saying this is because your minimum payment that you're paying on card or on your student loans, whatever it is, it is barely covering interest. If that. So when you're making your small $27.30 dollar payments, it's really not attacking the debt. It's only attacking the interest. So let's say your debt is $100.25 dollars. It's added on for interest, and they tell you that you need to make a $27 minimum payment. You're essentially just paying off that $25 of interest. You're not attacking that 100 because essentially, you'll just be down toe 98 is that, Did you? But you really just paid $27. You're not really chipping away the debt. So what I suggest is for all of your minimum payments at $10 to include that into your budget and make sure that you are paying more. Now, if months go by and you still feel good and you still have extra money at the end of the month, maybe make that 15. Maybe make that $50 over your minimum payment and watch how quickly your debt goes away. 6. 5) Keep Track of Your Net Worth: The last habit that I think you should adopt is checking your network frequently. To calculate your net worth, you're gonna take all of your assets and subtract your liabilities. The reason why I have you do this is because if you look at your assets and you look at what's in your checking account, you might be super excited and you think you have tons of money. But then you look at your liabilities and your debts, and you realize the big picture is that you have a lot of stuff hang overhead. That is not really coinciding with how much money have an asset. This might seem discouraging to you, but I swear it's much more helpful to see the big picture than to be blind it by the information. No, let's say you take your assets and you subtract your liabilities, which for a lot of people is a good amount of money, especially with student debt, and you're coming in a negative 100,000. That could be discouraging. I definitely understand, but the habit that I want you to have is to constantly check your net worth, and the reason why this is important is because as long as you're going from negative 100,000 to negative 90,002 negative 80,000 you are showing progress. And in life and in your finances, you should be striving for progress, not perfection. The benefits of doing this is one being aware of your finances and being aware of the debt and everything that goes into your network and to you need to make sure that you are giving yourself credit that you're improving yourself. It's easy to just look at your assets or liabilities separately and feel good or bad about the numbers. But if you take your network, that is one measurement that you can keep yourself accountable for. And even if your does an extremely high amount, I like to see the progress of Hey, my assets have bean increasing a little bit, and that's been helping my net worth or hey, I really attacked my debt this month, so my liabilities air lower than they normally are, and my net worth has been higher. The whole point, if I haven't said it already three times, is to not get discouraged over your finances. Checking your net worth and checking the progress of your net worth is a great way to keep yourself motivated and really understand your finances 7. Conclusion + Project Info: That's all the habits I have for you today To become more financially independent and to increase your financial stability, I promise these tips will help you if you follow them strictly. So the project I have for you in this course is simply just to adopt these habits by no adopting habits are difficult. So what I suggest is getting, uh, habit tracker to search it on Google. You can print one out great one yourself in your religion whatever you use. But keep track of how often you're doing these things. Whether you decide you want to do them every month or you want to do them every week. However, you want to evaluate yourself, but make sure that you're keeping track of your progress. If you like this video, follow me on skill share for more videos that will be coming soon. And if you have any suggestions for topics that you'd like to see, definitely leave a review down below so that I know what you as you're looking for and hopefully I can help you out with something else. Also, if you're looking for more personalized one on one personal finance help, definitely go on my website. There's a free consultation opportunity, if you'd like. So that's it. I hope I talked to all of you soon and I wish you all the best and let me know your progress If this has been helping you, I'd love to know because I really, really, really want help people. And that's why I do what I do. So have a great day. I hope to talk to you all soon.