5 Rules of Money: How to Make It, Save It, & Be Smarter About It
Mar 7, 2024
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Tiffany Aliche, aka The Budgetnista, is a New York Times bestselling author and financial expert who has transformed the way millions approach their finances. In this conversation, she reveals the 5 crucial rules of money you need to gain financial freedom. Topics include rethinking budgeting as a nurturing tool, overcoming financial anxiety, and maximizing savings with high-yield accounts. Tiffany also discusses effective debt management strategies and the importance of finding purpose and value in your financial journey.
Automate finances with 4 accounts to balance expenses and savings effectively.
Create a money list to manage expenses and divide income for savings.
Combat overconsumption by categorizing expenses and using separate accounts for financial control.
Optimize savings by choosing online banks for better interest rates and financial growth.
Deep dives
Setting Up Automated Money Management System
Automate your finances by setting up a system with four accounts: one for bills, one for spending, and two for savings, ideally split 70% for expenses and 30% for savings and investments. Divide expenses into bills (B), usage-based (U), and choice/cash (C), and allocate money accordingly to maintain financial balance without needing strict discipline.
Managing Expenses and Income
Create a money list to determine your expenses and income, separating necessary expenses from discretionary spending. Ideally, your day-to-day living costs should align with 70% of your income, leaving 30% for savings and financial goals. Utilize automation and separation of accounts to make managing expenses and income easier.
Addressing Overconsumption and Social Media Influence
Acknowledge the impact of overconsumption fueled by social media and easy online shopping. Use automation, categorization of expenses, and separating accounts to curb impulsive spending and align financial decisions with personal goals.
Understanding Ideal Financial Allocation
Strive to live within 70% of your income to cover daily expenses, while allocating 30% towards savings and investments. Focus on reducing unnecessary expenses and optimizing financial decisions to achieve the ideal balance.
Investigating Reputable Online Banks and High-Yield Accounts
Research and choose reputable online banks with FDIC insurance for high-yield savings accounts rather than traditional brick-and-mortar banks for better interest rates and financial growth. Utilize separate savings accounts for emergencies and goals to secure your financial future.
Mastering Personal Finance
Taking control of money involves understanding key areas such as budgeting, managing debt, saving, improving credit, and increasing income. For debt management, creating a 'debt list' helps you identify who you owe, how much, interest rates, and payment timelines. Strategies like the snowball method involve paying off the lowest debt first to build momentum. Similarly, the avalanche method focuses on tackling high-interest debt first, while the tsunami method prioritizes paying off debts based on emotional impact.
Dreamscaping for Success
Dreamscaping involves envisioning your ideal life holistically, considering aspects like personal goals, lifestyle, and aspirations. It helps in creating a detailed plan by identifying a future version of yourself and seeking guidance from role models or mentors. By aligning actions with your envisioned life, you can stay motivated and focused on achieving your goals. This method emphasizes the importance of seeking support and building a community to stay accountable and inspired.
Strategic Savings and Credit Building
When it comes to saving money, it's essential to avoid over-saving and focus on maintaining a balanced savings approach. Understanding credit building involves managing payment history, debts owed, and credit utilization effectively. Strategies like paying off credit cards in full monthly and automating bill payments can significantly boost credit scores. Increasing income can be achieved through leveraging credentials, highlighting contributions at work, and exploring relevant side hustles aligned with your skills and interests.
In this episode, you’re going to learn the 5 rules of money.
Whether you want to build credit, pay off debt, increase your income, or have more money in the bank, this episode is a must-listen.
It will surprise you.
It will move you.
And it will help you live a richer life.
Tiffany Aliche is THE money expert.
Known as The Budgetnista, she is a New York Times bestselling author who has helped 2 million people just like you save, manage, and pay off massive debt.
This is not your usual “make-a-budget-and-stick-to-it” advice. Tiffany’s take on $$ will help you see your money in a completely different way so that you understand how to make more of it and save it with ease.
After you listen, you’ll have THE 5 money skills you need to gain financial freedom.
For more resources, including links to Tiffany’s book, the links Mel mentions, and Tiffany’s social media platforms, click here for the podcast episode page.
