Violeta 0:00

You do not need to be perfect with money to start getting your finances together. You just need to start building some money skills. Nobody comes out of their mom's pansa knowing how to budget, how to save, how to pay off debt, how to invest, or any of that. You can still get your finances together. You can still build wealth. The thing is, you just need to learn how. So today I am sharing with you five beginner money skills that you need to start building if you want to stop feeling like chaotic with your finances and create a foundation for you to build wealth on. Hola, I am Violetta. I am a real estate investor and money education enthusiast. I like to share money tips and definitely real estate investing achievements. So make sure you stick around, you follow for more. So today, this episode is going to be for the Latina that is like, man, I want to get my finances together, but no sé dónde empezar. I don't know where to start because you may be in your career, you have a high salary job, or you just have a nice stable income, you're making decent money, but like it's still disappearing. Like, donde se está yendo, where is it going? And you are just kind of like left like, wow, I really need to figure this out because you maybe you want to buy a house, maybe you want to gain financial freedom, you definitely want to build wealth, but right now it just feels like a little overwhelming because there's just so many things that you need to do, and so that's why I made this list for you kind of like a starter kit, a roadmap so that you can start your financial journey. And then this is kind of the route that I took, and I want to share that with you. Now, this list again, it is a starter kit. The idea here is to build a strong foundation, a strong financial literacy foundation that way you can build you know those money skills up on top of that. So, not gonna get too much into like investing or investing real estate or any of the more complex things. This is just a foundation for you to get started. So, we're gonna be talking about how to manage your money and then a little bit of how to grow your money. But again, this is beginner. If checking your bank account makes your stomach drop, I am here to tell you that avoiding your money is not going to protect you, it just lets that chaos continue. Just because you are looking at that fire, it doesn't mean that the fire isn't there. We are talking about money awareness and spending tracking. That is the first skill that you want to start building. And I'm talking about understanding, learning how to look at your money, how to look at your finances, and without it being something negative to you, because money management is one of the number one skills, in my opinion, that you are going to need throughout your financial journey. No matter what you decide to do, whether you want to invest the stocks, you just want to buy a house, you want to start a business, you want to invest in real estate. Money management is a skill that is needed for all of that. You know, managing the bills, the finances, the income from a business that you want to start. Same thing with real estate investing, managing those finances for each property that you buy, understanding the rental income that's coming in, the expenses that's coming out, and learning how to track all of that. So that is an important skill that you will have to develop. And so the best way is to, of course, start with yourself, understand where your income is going, where is it all going? And there's so many different ways to do that, right? You can do a budget, check every month or whatever, but in this day and age, I feel like the most effective way for most people is through an app. Find one that works for you. There's so many different ones. I know some people use the Monarch one, some use the Nerd Wallet one. I used to use one that I can't think of the name right now, but it would link to my bank accounts and it would automatically like pull what I spent and I could categorize it, and it gave me like a whole bunch of visuals of like pie charts or whatever of where my money was going. And so it really helped me know and track all my money, and then it also helped me really become responsible and accountable for where I am spending my money. So it was definitely an eye-opener because I was bleeding money and I wasn't really realizing it because again, I was financially stable, I didn't really have to worry about it. So definitely was leaking money because I wasn't looking at it. And when you do this step, I don't want you to like again, this is more for awareness to set up your foundation, to start building those skills. So I don't want you to be like beating yourself up or whatever. Just be like, okay, well, maybe I shouldn't spend it on that. Now I know and I'm going to do better. Just start looking at your finances, start simple, do it maybe once a week, whatever timing that you want to do that you feel that you can do. Like, don't set yourself up for failure, saying, like, oh, I'm gonna track it every day and blah blah blah. Like, no, do something that's realistic because you know we're busy, we're working, all that stuff. So maybe like once a week or maybe even monthly, do that. Like, start with something, right? That's going to be doable because the goal is to build the habit, but also build the skill up. So all you're doing is just building the habit of looking at your finances, seeing where it goes, and just that's it. And so, again, there's so many different ways, spreadsheets. I feel like the budgeting app does the best, in my opinion, because everybody has their phone in their pocket when you're shopping, especially nowadays that you just do tap to pay. Like it's pretty simple to just click on an app and then just adjust and put it in the category that it needs to go. So I feel that is an easy, doable way. Now, this brings me to skill number two: creating a spending plan that matches your real life. Again, a budget is not your financial prison. A budget is you telling your money what to do, giving a goal for every dollar, every penny that you spend. And you want to make sure that you are spending it strategically in ways that's going to help you achieve whatever financial goal it is, whether you just want to save an emergency fund, whether you want to save up for a down payment for a house, you want to ensure that you're sending the most you can to your 401k or whatever, right? Creating a spending plan is a skill that you're going to need. Again, this is a skill that is going to develop if you're wanting to build a business, if you're wanting to invest in real estate, you're going to have to create budgets. Create a spending plan, for example, with real estate investing. I have to create one for every property and account for that. So it's definitely a skill that you will need for other investments and other things that you want to do. So definitely practice with yourself, of course, because you want to understand where your money is going and also give every dollar a job. And I like to use spending plan versus a budget. A budget feels more restrictive, and I think it's just been kind of like overdone with budgets. It just kind of like it's a lot everywhere. And so I feel like people are burnt out versus a spending plan. It feels more strategic, it feels more well thought out, and it's more intentional, right? Again, the goal is to ensure that every dollar that you have is given a task, right? This one's going to savings, this one's going to this bill, this one's going to my 401k, this one's going to be for education courses or whatever, or a book, right? That's all it is. So I don't want you to think that it's restrictive. Don't look at it. And changing that mindset, even just changing that wording, it definitely changes your attitude towards it, which will help you actually stick to it and actually go every month or however often and kind of assess and reassess and adjust as needed. Now, to create a spending plan, I do have a few episodes and I'll link them down below where we kind of go a little bit more kind of step by step on creating a spending plan. So I'm just gonna give some brief tips here. Of course, you start with your monthly income. What is your take-home pay? Is it, you know, like consistent? For example, when I was in the military, I knew exactly how much I was getting every first and 15th. Just figure out that portion for you. Like, does it vary? If it does, then just kind of like average it out. The second thing you want to do is, of course, list your expenses, all your bills. Like you'll have to really go into your bank accounts and just look at everything, no matter how small uh bill, a subscription. And you might just find that you forgot about a subscription that you're not using. Because I've done that before and I was like, hey, I forgot about this, especially with one of my business accounts. I I forgot that I never canceled a trial subscription. So I was like, Oh, I gotta cancel that because I'm not using it. And so definitely go through your expenses because you might find that there's things in there that you don't need anymore. And so, bam, already freeing up some cash right there. And then list your variable expenses, those are kind of a little bit harder, especially with everything going on. Gas and groceries are just kind of like getting crazy, so it's kind of hard a little bit to kind of figure it out, but just again try to average it out. Household items, right? Like soap and all that, toilet paper. Definitely, those are a little bit more variable. And then the last thing you want to do is list your goals. What is it that you want to focus on? And I want to say just focus on maybe one or two things. First, check to see what would be an immediate impact. So maybe like you have credit card debt, okay. Well, then you gotta pay that off. Or maybe you realize that you don't have an emergency fund and maybe you want to like take care of that and give yourself a cushion. So things like that, or maybe a vacation, and then what kind of investments would you like to do? And I think this is where it can get a little bit tricky because you might be tempted to do it all, right? Just pick one thing, one investment, like focus maybe on your forward one cave if that's something that you're already doing or need to do or whatever. Start with that. I feel like that's always the simplest thing. And then as you stabilize and as you build this, these skills, then you can go to a few more complex stuff like real estate investing. Although it's still doable, but I just kind of feel like sometimes people get too caught up in trying to do it all that they end up not doing any of it. So always start with something simple, something doable, and then grow from there. Now, as far as like budgetslash uh spending plan, there's so many different ways. You'll Google spending plan, and there's a whole bunch. I have a few episodes on budgets, and there's a few different ones that I used. I had used the 6040 at some point. Some people use the 50, 30, 20. And when I say those, those are just like percentages of where your spending is spent. So for example, in the 6040, 60% was living expenses and things like that. And then the other 40% was split up into four 10% blocks, where one was like investing, retirement, emergencies, and then just like education for yourself or fun or fun money, whatever, right? So yeah, decide where you want your money to go. This is where you're going to give every dollar a job. And it doesn't have to go to planned, you could just do numbers. If you see, like, hey, I have an extra, I don't know, like $300 a month. Okay, well, $100 for this, $100 for that, $100 for this. Bam. Because I feel like with the economy now, percentages is very hard, especially thinking that your living expenses are going to fall under one of these like percentages, right? But you know, just take the time and make a plan for yourself. The next thing is, of course, try to ensure that your spending plan has a pay yourself first strategy, meaning that you pay your savings or your investment, things like that first versus going out and buying extra clothes that you may not need or whatever, right? So just start that way. But also remember to look back, go through it periodically, so maybe monthly, quarterly, however you want, and make adjustments because maybe you got an increase in pay, or you finished paying off a car or whatever, then just go back and make adjustments anytime something like that happens, or at least monthly be checking your budget. The next skill is about savings. Now it kind of went into a little bit with the spending plan, but here I want to talk about like emergency funds, right? Your emergency fund is not there because you are in the negative or anything like that. It's there because life happens, things happen. Like just recently, my husband, like with the land, his tire just popped, right? It got a I think it was a thorn or something slashed his tire somehow. I don't know. We still don't know how it happened, but he had to go buy a new tire, which is like I think he said it was almost $300, and it was an unexpected expense, but he saves up, he has an emergency fund for those things. So it was like, oh well, well, I got the money for it, it's right there. And so you want to create it in an emergency fund to be prepared for unexpected life events like that. So the amount that you want to have really depends on what is going to make you stable and what is going to make you feel safe, right? What's going to stabilize you if something like think of like one of the things that might be kind of worst-case scenario? So it's kind of difficult for me to give you a number because originally it used to be like, oh, three months worth, right? Max six months. But with this economy and everything that's been going on, I mean, you see layoffs here and there, prices have gone up, everything costs so much more. And I've seen it throughout my network when somebody gets laid off. I mean, I've seen some people go past six months trying to find a job. And so nowadays, it's just like, well, it might be up to a year of living expenses for a cushion for and it kind of sucks because you would rather that be in an investment account, but maybe you need the access right now. And for me, understanding, and this is kind of like a skill that you know just builds up. I don't necessarily have an emergency fund just like in a high yield savings account, which is side note is where you would like to have your savings versus a savings account at a regular bank. You're gonna get a higher yield. Now I know it's not as high as like a year ago or whatever, where it was like at 5%. I think we're like at three-ish percentage, but it's still better than the point something that your bank is going to give you. But for me, because I'm kind of a little bit more stable, my living expenses aren't as high anymore, and I have some stability right on paychecks and things like that. I just have my credit cards as my emergency funds. I have pretty high limits, and also I have my investment accounts that I could always, you know, take a loan out on. So, and I also have like income coming from my rental property, so I have a little bit more like leeway with my emergency funds, so I don't have to have such a high savings in a high yield savings account. But again, this is you, you are the only one that can decide how much you are going to need if an emergency occurs. So, yeah, so just start an emergency fund. And if you don't think that you could start one and not going to achieve a high amount that you may feel that you may want, still something is better than nothing, right? It can at least reduce the impact of that unexpected expense emergency or whatever. So, still something is better than nothing. The next one is understanding debt and credit without fear. Now, debt is not automatically evil, and credit or credit score is not necessarily a scam, although you know you can go either way with that. But if you don't understand the rules, things are going to work against you. And that is something that I had learned along the way throughout my real estate investing journey through my financial journey is like I started understanding how credit worked and how I could use debt to my advantage to build wealth, to buy assets. And once you understand the rules of the game, it's so much easier. Now, there's a few complex things with that, right? And so I don't want you to go and do a deep dive yet. Just start with the basic, like what goes into a credit score? How do your credit cards work? Like, when does the interest hit? So start understanding what you have now. If you have a credit card, go in there and understand how that credit card works. When does the interest hit? When is it due? How much is the interest? Like, is it a cashback? Is it points? And if so, like how does it work? So that way you understand how that credit card works and you can use it to your advantage. For example, with mine, I've been using my credit cards for my investment property, and I'll go pay with my credit card and then pay it off immediately before the interest hits, and then I get some cash back or I get points. Now, there's been a few times where, like, you know, I just eat the interest because I needed something that was pricier, then I could pay it off right away. But again, I'm buying an asset that's going to make me money, so it's just kind of to me, kind of part of the game there. So I'm not afraid of paying the interest rate on that. And so being comfortable with that took some time, and it is a skill that you learn and you build up on. So that is a skill that you are going to need, especially once you start getting into investments and all that. So understand how debt works, how credit works, how it affects you, and what are the things that you can do to pay off your debt. Now, I just recently had an episode two with Justin from Price of Avocado Toast, and we talked about some debt payoff there. And so I'll try to remember to link it down below. And we talked a little bit about that. So definitely check it out. But if you do have debt, understand how you can pay it off, the different strategies to pay it off, things like that. So definitely take your time here as well. Pull up your credit report. You could pull once a year your full credit report on myannualreport.com. I'll try to link that below as well. It's free once a year, and it gives you your whole credit report, and you could see what all is affecting your credit. And just pull up your credit score as well, look up how it works, and then that will help you understand what things you can do to actually help increase your score. If that's something that you are looking for. So, for example, with me, I'm not too worried about credit score as much anymore. You know, my goal isn't to get that perfect high credit score anymore. My goal is just to keep it above, I think right now 720. And so sometimes I'm way up there. I think I've gone like 820 or something like that, and it's dropped down as low as 670, 690, I think it was. Because it depends on what I was doing. Because sometimes I use my credit a lot, a lot. So I buy a property right now. One of my cards are maxed out, so I've gotten a notification that my credit score dropped, but not worried about it. In another month, it'll go right back up once I pay it off. But that's me because I've learned how credit works, how I'm using it, how I'm using debt, and so now I feel safer using all of that to my advantage strategically. So definitely take the time to understand what's going on with you. And the last skill is making money decisions from goals, not guilt, which kind of covers everything that I've been kind of mentioning because it kind of everything that I've been talking about with the other skills. If every money decision is based on guilt, you're always going to feel like that shame. You're always going to feel like behind, and you might be doing better than you think, but that guilt will have you thinking that it's bad, right? And so learning how to make financial decisions with confidence has been a big game changer for me. I've been able to just jump right into things, right, with my experience, right? Don't just jump into it without like understanding what you're getting yourself into. But I've learned to do things with confidence because I know my goals, I understand, you know, all the other skills that we talked about, my spending plan, my financial goals, how my credit and debt, all that works, and how I'm going to use it to build wealth for me. And so that takes some inner work that not gonna get too much into it in this episode because I just did an episode talking about financial anxiety. Sorry, my dogs are barking now, and also like financial trauma and other things like that. But definitely check that out. I think it's the episode before this one. So I talked about there, and I have a few other episodes talking about just doing some inner work with addressing your financial anxiety and your trauma and overall mindset so that way you can make educated decisions, so that way you can build roles, you can gain that financial freedom. But yeah, again, that takes some time. Same with all these other skills, it's going to take time. So make sure that you understand that. Like, it's not gonna be an overnight thing, it's going to require some work and just some perseverance. And with that, I'm going to end this episode because I gotta go take the babysitter to her car, and baby sounds like she's awake. So and the dogs are you probably heard them bark, so probably have to go potties. So I'm gonna go take care of that. Other than that, again, this is a starter kit for anyone that is looking to get their finances, financial journey started. Don't forget to like and subscribe, share this episode, and I will see you in the next one. Bye.