3 Actionable Steps To Get To A New You
Updated: Apr 19, 2020
“The only way you will ever permanently take control of your financial life is to dig deep and fix the root problem" - Suze Orman
Today I want to spend time answering one of the biggest questions I get. Which is, "OK Regis, you got me believing I can be financially successful one day, so where do I start? And how do I start?"
Now before I tell you the steps, I want you to know that these steps are actionable items that I want you to do as soon as possible. These steps are how you get closer to success. Anyone can listen to a podcast, but it’s what you do with that information that information that gets you closer to where you want to be. I can only give you the information. It’s up to you to take that action.
Remember when you were desperate and you hustled to figure it out, whether it was asking around for money, or working overtime, or desperately looking for a job. I want you to use that drive and hustle to do these three simple things because this is your starting line to success. Do these and I guarantee you’re going to get there (and I don’t use the word guaranteed very lightly).
THE 3 STEPS TO A NEW YOU:
What I call “The Know”
Creating a budget and following it
And Opening up a savings account
1. The Know (What does that mean?)
When it comes to the community, you most likely don’t have people telling you “hey man, let me teach you about finance,” “let me teach you about credit,” or “let me teach you about stock markets.” What you do hear is about the streets, drug deals, and opposite sex. So, that stuff doesn’t help in getting the mindset that you need.
There’s been many of times, where I ask people for their interest rate on their credit card. And most of them don’t know what it is. I ask for the balance on all their credit cards in total, and they don’t know. And then I ask, how much do you have in monthly bills in total and they don’t know. . . I’ll actually I want to ask you now, do you know what is the interest rate on your credit card with the largest balance?
If you know, kudos to you. If you don’t, I think I know why. I think psychologically we don’t want to know. People think, “What is knowing the interest rate on my credit card going to do for me except make me depressed? All I need to know is that I need my card, I have a balance, and I ‘ll pay what I need to pay” and I get it, . . . . .but what about the other side of that thought? What if I tell you that your interest rate is 25-29 percent, which most likely it is right now? To put that in perspective. If you buy a 10 dollar meal with your 29% credit card, you are paying almost $3 in interest so that’s $13 dollars in total. To put that more in perspective, it doesn’t sound like a lot, but what if I asked you for $3 and you give it to me and I throw it in the garbage. If you knew I was going to do that with your $3 would you give me the money? That’s what you’re doing, just throwing money in the garbage. Now multiply that $3 by all those times that you spent $10 or more buying food with your credit card last year. All of that money in the garbage Now that you know that. . . . Would you think twice about using your credit card to buy Mc Donald’s, for example? Knowing what your interest rate is will make you think twice about using that card next time. Same thing with knowing all your income and outcome. If you know how much you have in monthly bills in comparison to how much you make, then you will know how much you can spend and how much you can save.
So to explain what I’m asking you to do with "The Know," is to write down all the following information on a paper for yourself:
Write down all your monthly bills
Write down what your minimum payments on your credit cards are
Write down how much you make out of pocket
Write down all your monthly Bills ( Rent, water bills, electric bill, cable)
Don’t forget your other bills ( Netflix, Spotify, transportation cost, Disney+)
Write down your credit card balance and the interest rate
Write down your student loans and it’s interest rate
Pretty much write down anything that has to do with knowing where your money goes and save that paper. That will be your guide on what you can do with the rest of your money. And for future reference you should do this once or twice a year and if you’re married you should do this with your spouse regularly as well.
As you do this Pay attention on how you feel when you find out your interest rate, and how much you spend on your bills, like a single person paying $150 in cable is a lot when you can have Netflix and Hulu for $15 a month in total. Or use your cousin’s Netflix and Hulu access for free and save that $150.
So now that you have this information it will either make you sad seeing all that debt or knowledgeable. But what do you do with this information?
2. Create a Budget (and follow it)
A budget is a plan on what to do with your money. This is the plan that will lead to your success. EVERY person that has $1000 - $100,000 saved has a budget. If you don’t have a budget then 1) You now know why and now you know what you’re doing wrong and 2) You know what you need to do to get where you want to be.
So I’m going to talk some numbers now and I hope I don’t lose you. So for example, if you make $1000 a month and you have $600 in monthly bills. That leaves you with $400 left over. If you get paid twice a month that’s $200 a check you have left over. ( To explain that a little bit more, That’s the $400 left over divided by two checks which is $200 per check a month) . . . now you can budget for $100 a check which should cover you for groceries and $50 for fun spending and the last of that check $50 to the savings account per check. So to explain better, out of your left over $400 a check that’s $200 a month to groceries, $100 a month for fun, and $100 to savings accounts a month.
A few things to know, that’s an example and you can tweak the numbers with what you make. Another thing is that it’s important, budget for fun, fun can mean you can budget for some drinks, buying new clothes, and any other legal recreational activities. Budgeting for yourself is important because it’s easier to save when you don’t feel a constraint to have fun. I think when we think budget we envision eating bread and drinking water and being unhappy, but it doesn’t have to be that. You can have fun and budget. Just remember, when that money for that budget is gone, than you have to wait for the next check. That’s how you live paycheck to paycheck but don’t become surviving check to check person. I hope that makes sense.
I realized a long time ago that the secret to not living paycheck to paycheck is savings. I realized it because one day my job sent my check to another person by mistake. I don’t know how that happened, but it did and at first I panicked, but then I realized that I had money saved in the bank so I took out what my check would typically pay me and when I finally got my check I put the money in the bank.
Saving is extremely important ya’ll. It not only saves you from living paycheck to paycheck, but you’ll need this money in case of emergencies. And as you know now, there’s always an emergency. Like now, think about all the money you spent on crap last year and if you would have put that in the bank, imagine how much more secure you would feel during this time right now.
And another thing savings does, is stop you from using your credit card. We’re told that we should use our credit cards in case of emergencies and technically that’s what you’ve been doing when you don’t have cash, but that’s not how credit cards work. Your own savings should be your emergency fund and credit cards should ONLY ONLY be used if you have you are stranded with no cash for example or if you travel because credit cards have better security for you. So to clarify, don’t think about your credit card as your emergency money, don’t think about your credit card at all. You need to save and that has to be your emergency money. In fact I recommend you cut your credit card right now, but that’s another episode and call to action for another day. I recently had a person that I help and work with call, me to tell me to tell me that he is not working because he got let go because of these trying times and that he typically would be nervous, but since I’ve started helping him, he’s saved $10K (I’ve been working with this person for a few years). . and he told me that he also has credit cards that he knows not to us, but with what he has saved and with the credit cards as a backup, he has $35,000 in case of emergencies. He is not scared at all through this corona crisis. He let me know that saving and his state of mind when it came to savings did that. I was so ecstatic to hear that and I want that to be you if you’re not there yet.
So, to bring it back to The Know and your budget, make sure you budget to have money regularly deposit to your savings account. Now what I want you to do that is open an online savings account, not your savings account at your major bank like Chase or Wells Fargo, you should open an Online savings account, for example HSBC has an online savings account called HSBC Direct Savings which is offering 1.70% in interest in comparison to their regular savings account which is .01%. To find an online Savings account you like, go to bankrate.com and search online savings account. I’ll have the link on my show notes.
Now that you’ve opened this account, the money that you budgeted for savings you should automatically deposit it in your online savings account. If your job offers savings direct deposit, you can have a separate amount go to this online savings account you opened. Having things automated helps a lot when you don’t have to see this money you are saving. If your job does not offer direct deposit, what you can do is set up Bill pay from your regular bank account to your online savings account. What Bill pay is, is a benefit you have with your online banking access where you can send a check form your main bank account to your online account and it will do it automatically without you physically writing a check. And the third thing, if you don’t want to set up bill pay is to make sure you consider savings money a bill and make sure you put money into your savings account like you pay other bill. You can have your online savings account take the money from you regular account as an ACH and take out form you’re account like a regular bill come out of your account. Save whatever you can weather it’s $5 a month or $300 a month.
Another thing I want you to do is to add any additional money to this savings account, what I mean by that is any overtime you’ve accumulated or even your extra income tax money, you can be send it to this account. It will add up fast.
I promise you if you do the savings and forget it, you will not regret it. I actually have to tell you about how this process helped me buy my first house by mistake. Yes by mistake.
I had my check money directly deposited to my online savings account and I didn’t pay attention to it for about a year. My plan was to look into buying my house later on in the year, but a friend told me, “Why don’t you talk to a mortgage rep so they can at least tell you what you need to get to the point where you can buy your house” So I did that and when the mortgage rep told me how much I needed, I finally looked at my Online Savings account and realized I had that much money I needed to buy the house, so when she asked me, would you like to proceed, I was like yezzzzz?!?!?!?
So to wrap this all up, If you want to get to the financial comfort and success you feel you deserve, I highly recommend you do your “know”, create a budget, open a savings account and use it. I am guaranteeing you, that if you do these things you won’t regret it. I do want to disclose that it’s not easy, it’s definitely easier said than done, but nothing worthwhile comes easy.
My call to action is to do these 3 things and email me at firstname.lastname@example.org and let me know how much you’ve saved in 1, 3, or 6 months. I’m super excited to see how much you’re saving.