Financial Freedom Junkie
Imagine what it would be like to no longer stress about money. Imagine if you could transform your financial future and unlock a more fulfilling life. This show is your roadmap, and here we explore personal finance, saving, investing, debt management, tax strategies, real estate, wealth building, entrepreneurship, and just about everything in between.
Adam Fernandez, a CPA, and his wife bought 3 houses in 4 years by the age of 27 (without a trust fund!). You will learn actionable strategies to develop your money mindset, achieve your financial goals, and design the life you love. Not only does Adam offer personal finance tips and insights to help you improve your relationship with money, but he also interviews industry experts and everyday people just like you to discuss financial literacy so that we can all live more freely.
Follow and become a Financial Freedom Junkie! (Warning: side effects may include increased wealth and occasional laughter!) Got money questions? Want to be on the show? Learn more at financialfreedomjunkie.com.
Financial Freedom Junkie
The 7-Step Path to Financial Stability
#5 Living paycheck to paycheck and dealing with financial anxiety sucks, to say the least. This practical seven-step plan will help you break free from the constant struggle and achieve financial wellness. This guide serves to get you to create a firm financial and mental foundation, but personal finance is personal, so I can’t understate the importance of a personalized approach.
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Disclaimer: This content is for general informational, educational, and entertainment purposes only, and it is not financial, tax, investment, or legal advice.
Are you tired of living paycheck to paycheck, barely making ends meet and feeling trapped by your finances? Maybe you've tried budgeting, but it didn't stick because you lacked a proper plan or a clear vision. the bad news is I can't wave a wand and suddenly improve your situation. I haven't learned how to harness my magical superpowers yet. The good news is that I'll share with you a simple, seven step plan that works. You can put it into action to gain financial stability and financial wellness. Let's jump right into episode number five. Welcome to the Financial Freedom Junkie Podcast, where we help everyday people master their money and fulfill their financial purpose. You should never lose sleep over money, but together we can change that. I'm Adam Fernandez. Join me and let's get addicted to the pursuit of financial freedom together. It's time to become a Financial Freedom Junkie. All right, here's where we begin. Number one, you need to create a vision board for your life. And now you're thinking, dude, we're talking about money. No, seriously. I mean, this, You need to create a vision board for your life. These are not just tangible things like things I want. I want that Lamborghini. I want that yacht. I want to go and have that dream vacation. Yeah, those are great, but your vision board is also about more important things. When you get clear on your vision, all the different financial goals you have, all the things that you think you want, They may be great. but if they're not guided by your values, what you want for your future. for your family's future, what really matters to you, It's not really going to matter. It just won't. And that's why to help you with this, my wife and I put together a financial vision board template that you can use to create your vision board and to help map out your financial future. And we'll get to that in a minute. The second step is to get clear on your numbers. We're talking about your earnings, your spending, your debt, your savings. And I'm not talking about, go into the budgeting and start trying to make improvements. You just need to know where you're at, And I know that can be really overwhelming. So as a numbers nerd that I am, I put together what I call my money management plan. So you can grab that money management plan template as well as that financial vision board that I mentioned a moment ago, just by signing up for my newsletter, it's free. And it's awesome, if I do say so myself. Just go to FinancialFreedomJunkie.com/newsletter. I'll also include the link in the description below. Alright, number three. You want to analyze why your money is where it is right now. This is what I was just talking about. We are tracking our money. We are not deciding to make any changes yet. We just want to see where we're at. This is going to help you paint a picture of your money habits and tell you what direction you're currently headed in. It's going to help you identify your relationship with money because until you kind of lay things out on paper and I'm victim to this myself, I've been there. I'm thinking, man, Where did all this money go? The truth is no matter how well you think you know how you're spending your money, or how you're investing your money, or how you're saving your money, all these different things, until you really go in to take a look. you won't know what your financial situation really looks like. So when you track it, you identify what direction you're headed in, what your relationship with money looks like, and that will help you identify where you're at, and it may guide you to go in a different direction. And so that's where the planning comes in place. I believe Maya Angelou once said, you can't really know where you are going until you know where you have been. Well, where you have been is your past, as well as partially your current state. Once you know your current plan, your current state, you can pave the way to make improvements. All right on to number four. Let's really dive into the money the first thing you need to be worrying about is Erasing all high interest debt talking generally speaking anything 8 percent and above. That high interest debt, it just it needs to go as quickly as humanly possible. Everything should be focused on paying that high interest debt, like credit cards and personal loans, they can have interest rates that range from 10% to upwards of 30%. And for goodness sake, please steer clear of payday loans. They can have interest rates with APRs as high as 400% or more. And now you may be thinking, okay, erase all my high interest debt, but how? Is there a right way to do it? Well, you've got a lot of different methods that you can use. the two most common out there are the debt snowball method and the debt avalanche method. The debt snowball method really goes into focusing on all your debt with the lowest balance. maybe you have a $2,000 personal loan and you have$5,000 of credit card debt. Just throwing that as an example. Well, the debt snowball method, you would focus on the lowest balance first, meaning you'd pay the minimum payments and all your other debt and focus on just paying down that $2,000 personal loan. the debt snowball method is good because you're effectively having small wins and small wins and small wins. And that's great. It's a dopamine boost to the brain. It's wonderful. But financially speaking, it's not the best. The more logical, financial savvy person in me really cares more about the debt avalanche method. And so the debt avalanche method is you're just going to be tackling the highest percentage interest rates first. So again, you're paying the minimum on all of your debts and focusing all your extra dollars on items with the highest interest rate. You will save the most money by working your way down from your highest interest debt to your lowest interest debt Once you've destroyed all your high interest debt, move on to number five. Here's where you create an emergency fund if you don't know what an emergency fund is, it is effectively a safety net so that if something terrible happens, someone loses their job, or there's some medical emergency, hint, hint, emergency fund, You've got a foundation, some stability, so that this emergency, this unforeseen event, doesn't set you back and really screw things up for you. you've got some money that is there set aside for the unknown, for the what if. And it's really, more than anything, a peace of mind. And there's a lot of advice out there about how much this fund should be. People get nervous and sometimes they freak out. They suffer from decision fatigue and they go crazy. If you don't have anything saved up yet Save 1 month's worth of your living expenses. Then crank it up to 2. And then 3. Depending on your situation, you may want to be between 3 and 6. For a lot of people, 3 months of living expenses is perfectly fine. you may want to work your way up to six months like if you're a single income household, or there are other people that you think you may be needing to support, and I know people that have over a year's worth of money saved up in their emergency fund. It's purely preference, but there needs to be some sort of foundation. Start out with one and work your way up. But personal finance is personal. I say it all the time. Personal finance is not one size fits all. And, you should feel comfortable and at peace with what you're doing and the decisions you're making. Now, we'll move up to number six and that's investing small amounts And there are lots of different ways you can do this. For example, I know Ally Bank, an online bank, They help you invest or at least save small amounts in many different ways. They've got these things called roundup contributions, where let's say you go to a store and you spend 49 dollars and 90 cents. Well, if you enable that roundup contributions feature, that 10 cent difference, they'll just apply that and throw it into your savings. You've also got surprise savings. They have their systems continuously monitoring your checking account, seeing how your money comes in and out. And at times that it deems worthy, it will just move $10 from your checking account into your savings account. If you have a online checking and the high yield savings account. Ally bank is just one example, but there's lots of stuff out there where you can just save in small amount of ways. In terms of investing small amounts, or investing in general, I'd say the number one thing is if you have free money, take it. Like if you work for a company that has a 401(k) match. So sort of typical, you, if you contribute 6 percent of your salary, they will match four and a half percent, then contribute 6 percent of your salary. That is free money. It is 100 percent return on your investment. That's unheard of anywhere. if there's anything available to you where you invest a certain amount and someone will match it, take advantage of those opportunities. And those are just the little things. There are an infinite number of ways where you can make your money work for you, whether it's saving in a high yield savings account. Or saving in a health savings account, an HSA, and taking advantage of all sorts of tax benefits as well as being able to invest that money. There's just so many options out there, but these are some simple, steps that you can take to improve little by little. Which brings me to number seven. One of the most important things you need to do to have financial stability, to ultimately achieve financial freedom, is commit to doing better for yourself. commitment isn't about, Oh, I'm a hundred percent certain with every decision that I'm making. No, it's just having some faith and knowing that you have the right intentions and you've done some research and you're trying to take the right steps to improve your situation. So take baby steps. And no, I'm not talking about Dave Ramsey's baby steps. That's a different thing. So I think about like new year's resolutions and how 80 to 90 percent of people fail within the first two weeks. They're like new year, new me, but they set unrealistic expectations. They, they're drastic changes from their current state, their current situation. They, they try to go from A to Z, but they forget there are usually so many steps between where they are and where they want to be. So they just quickly become discouraged. that's why it's so important to have achievable goals and a plan in place. Commit to the thing, having faith that you can do it, that you will do it, but also giving yourself grace because we're all imperfect and you shouldn't beat yourself up for making mistakes. I feel like I've been saying this so much lately, but consistency is key. James Clear, the author of the number one New York Times bestseller, Atomic Habits, he wrote, I accumulated small but consistent habits that ultimately led to results that were unimaginable when I started. it doesn't need to be one to 100. It just needs to be forward progress. And yes, sometimes you're going to move back because we make mistakes and sometimes things are out of our control. But the point is to be as consistent as possible, be intentional, having that plan, having that vision that you're going to do better, that you're going to improve your situation and that you're going to achieve the goals and vision that you set out for yourself. That said, if something has said resonated with you, please leave a comment letting me know which of these steps you need the most help with, or which you found most useful. you may be able to do that on your podcast app or if not just text the show by clicking the link in the description. Make sure to hit that follow button if you haven't already and thanks so much for being here. Until next time. Peace. Oh, and one more thing, quick disclaimer. This content is for general informational, educational, and entertainment purposes only, and it is not financial, tax, investment, or legal advice. See full disclaimer at financialfreedomjunkie.com/disclaimer.