week 11: Hot girls like finance

I focused on learning more about finance for a month- these are the top 5 things I learned

Still life by Elizabeth Blackadder

I spent the month of April focused on one major thing: understanding personal finance.

I talked to friends, took classes with professionals, and gathered teachings from financial advisors so you don’t have to.

This week, I am compiling the 5 useful things I learned for any hot girl who wants to take control of her finances.

You don’t have to like or be good at math, everyone knows I am not. You also don’t need to have a ton of money. I don’t.

All you need is 5 minutes and just a few ounces of willpower.

What I am not going to share:

How to budget, spend less, or earn more. Because these things are next to impossible to do and not effective or realistic.

What I am going to share:

5 lessons that make managing finances a lot clearer.

D- Doing

Taking the time to learn about finance.

I have an avoidant personality when it comes to managing finances.

I hate opening my bank account, paying bills, and don’t even get me started about investing. I would rather scroll and turn off my brain than open a finance app (yuck).

So many people my age feel out of control of their spending. We download budgeting apps, say no to eating out, or avoid walking in stores, and then we give up trying and spend freely until we are hit with an unexpected bill and feel stressed, and start cutting down our spending all over again.

That is no way to live! Especially when the alternative is actually quite simple.

The issue is we don’t know or weren’t taught any differently. Enter lesson 1:

1. Your high school finance class taught you wrong:

(If you’re like me, all you learned was how to fill out a check and how to play a stock market game with no investing advice)

The most commonly applied approach to finances follows this model: Get paid —> pay bills (rent, utilities, etc) —> spend on lifestyle (eating out, shopping) —> put leftovers into savings and or investments.

This is a terrible method.

If you spend too much, you have nothing to put in savings, and then you feel guilty or stressed. This model leaves a lot of us feeling behind or stretched thin.

Enter The Pay Yourself First Method (I did not make this method up, in case this is the first you are hearing of it).

Get paid —> send fixed amount (pre-determined) of money to savings accounts and investment accounts —> pay bills —> spend what is left freely

If this method seems impossible or impractical to you, give me the rest of this article to explain why it’s practical, accessible, and achievable. Using this method, you WILL gain financial security, guilt-free spending, and become a hot girl who likes finance.

I- Interested in

Achieving financial security.

(Warning- I am about to use numbers, but rest easy, these are the only numbers I will use.)

Did you know 72% of adults feel stressed about money, and 64% of women feel stressed about money on a daily basis?

I state this statistic for 2 reasons

First: You are not alone if you’re stressed about money

Second: There is a clear lack of financial education among women, which leaves many of us feeling out of control of our financial futures.

So, how do we feel less stressed about money? By achieving a higher salary? No. (I mean, yes, that would be great, but financial security does not come solely from a high salary.) Enter lesson 2:

2. Financial Security Does Not Come From A Higher Salary

Financial security is achieving a feeling of peace and calm surrounding your finances. In order to achieve this feeling, what you need is an emergency fund.

An emergency fund is a separate savings account (not connected to any of your daily savings/ checking accounts) that has 3-12 months’ worth of your fixed expenses. (Fixed expenses are your daily necessity costs: rent, groceries, utilities, gas, car, insurance, etc).

An emergency fund is your answer to the financial unknown. No matter what tomorrow brings (loss of employment, a recession, a car accident, unexpected medical bills), you have an emergency fund to rely on.

You don’t need to have all this money right away. As soon as you get paid, send a little money to a separate savings account for emergencies until you have 3-12 months saved.

G- Getting

Stocks. Enter Lesson 3:

3. Hot Girls Buy Stocks

Once you have an emergency fund rolling. Let’s say you have 3 months in your separate emergency fund savings account. Then you turn to stocks.

If you’re turned off by this, let me tell you why you shouldn’t be:

• Think of the stock market as a high-yield savings account. This is money you won’t need next week, month, or even year. This is very future-forward financial planning.

• If you are worried about losing money in the stock market, know this: you only lose money when you SELL at a loss; just because the market is down does not mean you lost money

• Speaking of the market being down: since the start of the stock market exchange, the market has only ever grown, and it has never collapsed, and not recovered to exceed its previous state

• On average, the return on your money in the stock market is 8% (which is way higher than any savings account)

Ok, now that we've got that out of the way, you should be less scared of investing.

Hot girl investments are safe investments. ETFs (exchange-traded funds) are hot; taking risks on individually traded public companies is not. Just Google ETFs and start there; it is easy, simple, and effective stock market trading.*

*I would explain more, but I didn’t want to get all caught up in the nitty gritty legal details of publishing stock market advice

S- Suggesting

The best piece of financial advice I ever received from my parents was about credit cards. My senior year of high school, my parents told me to get a credit card and taught me how to use it.

After speaking to so many friends, I realized they did not get the same credit card speech from their parents that I did, and they are worse off for it. Enter lesson 4:

4. A lot of people are using credit cards wrong

You should be using your credit card daily, and you should be paying off the STATEMENT BALANCE IN FULL EVERY MONTH.

If that sounds scary to you, listen to me carefully: your credit card only works if there is money in the bank to pay it off.

You should absolutely avoid charging more to your credit card than you can afford to pay each month at all costs.

So use your credit card everywhere and every time you pay; it is one of the safest and smartest ways to spend money if you use it correctly.

Get your points, cash back, and security from fraud. Your credit card works for you if you pay your bill in full every month.*

*again, for the people in the back, your bill is your statement balance, not your current balance.

If you are thinking: Well, what about emergencies? Then I could charge more than I can afford to pay off each month.

No! This is what your emergency fund is for! The only thing that charging more than you can afford to pay off gets you is into debt. And credit card debit is the devil.

Moreover, if you follow the pay yourself first method, you will find the impossible is possible, enter lesson 5:

5. There is a way to spend freely without feeling guilty

Circling back to lesson 1: The Pay Yourself First method.

Each month (or biweekly- however you get paid), as you apply the method and take your paycheck, contribute to an emergency fund, put money into the stock market, then pay your fixed expenses, all money left over from that paycheck is yours to spend. That is your budget that requires no actual budgeting to get.

Anything you want to buy with that budget, you can buy. Your money is yours to spend freely without guilt or shame.

Picture this: you just went out to dinner with friends, had drinks, apps, and dessert, and you don’t feel any shame or guilt over the cost of your meal.