These everyday habits can help you get a better grasp on your finances
Carmen Perez breaks down her favorite simple and convenient habits to incorporate into your everyday life to help take the stress out of managing money.
Video Transcript
CARMEN PEREZ: Money, it can be the root of a lot of stress. But it can also be the root of security if you play it right. What up, everyone? I'm Carmen Perez. And this is Getting Rich. Today, we're going to be talking about some simple and convenient habits that you can incorporate into your everyday life that will take the stress out of managing your money.
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Budget, budget, budget, there it is, the word that gets a bad rap, budget. Figuring out how much money you have to spend and where you spend it lets you know exactly where it's all going. By keeping a close watch on how much you have coming in and how much you need for necessities, you'll never find yourself in financial straits again.
It might seem like a chore at first, but tallying up your daily spend will help you make better financial decisions. You can even get a budget app that connects to your bank account. All you have to do is open that app at the end of each day to check how much you're spending. The more you do this, the more you'll start to see what you can live without.
Now, it doesn't mean that you have to give up your daily latte, but it could put things into perspective. Setting aside even $1 a day can help you build an emergency fund, because let's face it, life is full of surprises. No one plans for a baseball through the windshield or replacing a kitchen sink, but it happens. And you'll have yourself to thank for setting that money aside.
Budgeting doesn't mean you don't get to have fun with your money. But you do need to think about what you want to spend that extra money on. I mean, getting food delivered is cool. But is it as fun as that nice vacation?
Figure out what you really want. And save your extra money towards that. I know it's hard to pass up some new shoes, but imagine how good the ocean breeze will feel at that fancy beachside resort.
Handling your money can be a lot to think about. But with these habits, you can start getting your finances on-track and moving forward. Now let's talk to Skye.
Skye, welcome to the show.
SKYE LINDBERG: Thank you so much for having me. I'm excited to be here.
CARMEN PEREZ: Yeah, absolutely, absolutely. So tell me a little bit about yourself and what some of your financial goals are right now.
SKYE LINDBERG: My name is Skye. I'm 26 years old. I just moved to the city. I grew up in Annandale, Virginia right outside of DC. I'm a performer. I also work in events. I'm a yoga instructor. So lots of ways to make money, but somehow the city just sucks it all out of me. So I feel like the biggest struggle when moving to a new place is just that financial transition.
CARMEN PEREZ: Yeah, absolutely. And I think the biggest thing moving to a city specifically, a large city, there's so many costs involved that you don't really think about until you get here, especially like a $100 latte, for instance.
SKYE LINDBERG: Absolutely.
CARMEN PEREZ: The bodegas don't make it easy.
SKYE LINDBERG: We need the coffee, though.
CARMEN PEREZ: Yeah, we do need it. We do need it, for sure. So have you ever had a written budget before coming here? How did you manage your finances? And what are you kind of-- what's the next goal for you?
SKYE LINDBERG: Yeah. I think in the past, I've used budgets. And that has worked for me for the most part. So now, I just need to figure out, first of all, how to protect myself, so how to create an emergency savings would be great. Just how to put money aside for things like that while wanting to enjoy yourself in the city but still being smart about it.
CARMEN PEREZ: So my best recommendation is putting a barebones budget in place. And that can look like, literally, just the expenses that you absolutely must pay in order to keep the lights on every single month. And then anything outside of that, that's when you start divvying that up to other things that fall lower on the totem pole when it comes to your barebones budget.
That's when you can really start digging into the things like an emergency fund and putting money towards that.
SKYE LINDBERG: So what are some things that I could do every day, other than budgeting, to help my finances?
CARMEN PEREZ: One, I would say, looking at the trade-off. So if you go to the bodega, grab your bagel and cream cheese with a coffee, how much is that going to cost? And if doing that daily, what that looks like over the long run. And understanding how many hours do you actually have to work in order to pay for that bagel and coffee.
So understanding the trade-off cost can really put things into perspective for you on a day-to-day basis. Now, that's not saying you should not have fun. But it's always good in moderation and just something to at least think about before you make that purchase.
SKYE LINDBERG: Great. Thank you so much. I really appreciate it.
CARMEN PEREZ: Absolutely. Thank you so much for coming on the show. And it was wonderful speaking with you. And I wish you the best of luck in your financial journey.
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Budgeting is much more effective when you have a financial plan. So whether it's buying a house or a year abroad, hold your financial goals up to a SMART standard, specific, measurable, achievable, relevant, and time-bound. SMARTer goals lead to smarter and more effective budgeting. I'm Carmen Perez, and this is Getting Rich.
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