Transcription
Hey family, it's your girl here and today we're going to talk about something that even if we don't think we need it, we do. And that's money ASMR style.
Now, quick question. When was the last time you felt completely confident in your financial decision-making? Raise your hand. Now, if you raise your hand like this, you know they kind of halfway raised like when you don't want to answer the question in class. Or if you hesitated or laughed nervously, this video is for you. And even if you've made great financial moves and decisions, this is still for you because we can all get some good refreshers.
Now, in the next few minutes, I'm going to break down the essential financial habits you need to set yourself up for success. No fancy jargon, no complicated theories, just practical wisdom that most of us wish had been shared with us years ago. Grab a notebook if you want to, okay? Just grab your little good old faithful or just listen up, okay? That's the most important part. This is the money conversation we should have been having at the dinner table, not about your trifling cousin Bubby. And yes, I'll be sharing some of my affordable favorites through my LTK. And that's for those of you that ask how I stay fiscally responsible while still enjoying some nice things in life. Smart money moves don't mean you can't enjoy [Music] life. Beautiful. Okay, let's go now.
Let's start with a strong foundation. Knowing where your money goes. My mama did a good job of teaching me this. Listen, I used to think that I knew what I was spending until I absolutely tracked it for a month. Those $5 coffees and little Amazon purchases, they add up faster than gossip at a family reunion. And let me tell you, even if you make $10 Amazon purchases, but you making them five times a day, girl, stop.
Here's your simple budget formula. Income minus necessities minus savings equals what you can spend on wants. Now, what are necessities? Rent, groceries, utilities, transportation, and minimum debt payments or maximum debt payments. Those come first. So, here's a quick example. If you bring in 3,000 a month and your necessities though cost 2,000 and you put 300 into savings, that leaves you 700 for everything else. That's your reality, not what your people on Instagram is doing.
Let me just share something with you all that I recently did as this world is doing its thing. Okay, this saved me some serious cash. I actually went through all my subscription apps and even my recurring bills. I called a bunch of the companies, especially the ones that I've been with for years, like my phone carrier, just by asking about current promotions and even services on my phone that I didn't even realize I wasn't using. Okay, I literally knocked $50 off my current phone bill. $50. That might not sound like nothing, but it's a lot. Do this kind of audit every 6 months. That's what I've been doing. These companies ain't going to volunteer those savings because baby, they want their cash.
So, pro tip, use the 50 3020 rule as a starting point. That's 50% of your income for needs, 30% for your wants, and 20% for savings and debt payoff. But I want you to adjust based on your situation, especially if you live somewhere expensive. Now, I'm no financial planner or anything like that, but these are things that have really worked for me. And there's even mobile apps like Mint and YNAB. They can help you do the heavy lifting. But honestly, a simple spreadsheet or even a notebook works as well. The point is having awareness and not perfection. And a lot of us don't want that awareness because the awareness means that we got to do better. You hear me? Do better.
Now, speaking of protecting your finances, I need to talk about something serious. Did you know that Bank of America literally just announced a data breach and they didn't tell nobody for months? On average, it takes companies 277 days to report a breach. That means your personal information could have been exposed months ago, and you're just now finding out. And this isn't even Bank of America's first breach this year. And last year, City Croup and JP Morgan Chase, they both announced breaches, too. You get a breach. You get a breach. They all get in a breach.
So, when we talk about financial literacy, protecting your identity is just as important as budgeting and saving. And that's why I want to tell you about today's sponsor, Aura. Thank you to them for bringing us today's video. Aura alerts me if they find my phone number, email, or my social security number on the dark web, and they'll let me know fast if someone tries to use this information, especially to access my credit or banking accounts. And it's happened to me a couple times. Mhm. They give me up to 5 million in identity theft insurance and that's if the worst case scenario should happen. And they provide a bunch of other features to keep safe online. And that's all inside one app. You can go to my link or aura.com/drneina to try 14 days for free. That's enough time for Aura to find out if any of your personal information and data has been exposed. And you'll learn about it before one of those companies are forced to let you know. And y'all, I highly recommend that you do this right now because most of these companies will only offer free credit monitoring after the breach. That's like installing security cameras after your house was robbed. Where they do that? Look, I get it. There are so many data breaches, your social security dumper might as well be written on a bathroom stall. But if you haven't been bitten by the bug of stolen identity, why roll the dice? And if it's because protecting yourself seems overwhelming, let Aura do the work for you. I'm not leaving myself or my family vulnerable to these data breaches. And if you don't want to either, go to orura.com/drneita to get your 14-day free trial. You need this.
Next up is your emergency fund. This isn't just some fancy financial term, y'all. This is your sleep well at night money. And you know, some of us already on a struggle bus when it comes to sleeping, especially these days. I remember at one time when my car broke down right before Christmas, and I was younger then. You know, that $800 repair could have wrecked my whole holidays. Instead, it became an inconvenience and not a crisis. Okay. The two are two different things. Both make me anxious and anxietyridden. Uh-huh. But they two different things.
Start with working towards $1,000 as fast as you can. Even when I was in graduate school and even when I was in college, I started trying to work towards that. Then try to work towards 3 to 6 months of your essential expenses, things that you cannot live without should something happen. So, let's say your monthly necessities are $2,000. Aim for 6,000 to 12,000 eventually. And where do you keep it? Not under your mattress. Use a high yield savings account that's separate from your normal savings or checking account. You want it accessible, but not too easy to tap into for non-emergencies.
Accountability. And what would I say counts as an emergency? I don't know. What do I know? job loss, medical bills, urgent home or car repairs, a flash sale at your favorite shop. Not an emergency, hun. And y'all, let me tell you, I've been there. Okay? I know I keep talking about it, but last summer, three trees fell on our house in the same spot. Yes. But when I tell you, thousands in repair, okay? Yes, insurance came through, but when you got to pay up real quick, we had to get a tree, and I'm I'm going to share some private information with you. We had to get a one of the big oak trees taken off the house immediately. Do you know how much that one tree cost with the little tiny trees that was with it? $4,000 immediately. Same day that it happened. Okay, so this can happen to anyone. I just want y'all to be well aware that having that makes the difference in the way that you're able to govern yourself and live in this world. So those sales, they ain't worth it, but being able to repair something, so worth it.
So let's talk about the elephant in the room. Mhm. debt. Let me share another thing that's real personal to me. When I went into academia, it wasn't just because I wanted to be a professor. In fact, I didn't see myself as a professor. Huh. And it wasn't because I just love teaching. I'm pretty good at it, though. I strategically chose a career that qualified at that time for public service loan forgiveness. After making 120 qualifying payments towards my loans while working in higher education, my remaining student loans were completely forgiven. completely gone. Bye-bye. This wasn't luck. It was deliberate financial strategy that saved me tens of thousands of dollars. Okay? And I paid the cost to be the boss.
So, if you work in public service, government, nonprofit, education, healthcare, look into PSLF or other forgiveness programs. They're not talked about nearly enough, but they're totally life-changing for people like me. Now, for paying down the debt, there's two main strategies. The avalanche method. higher interest rates first and the snowball method. Smallest balance first. Mathematically, the avalanche saves you more money. But psychology matters, too. The snowball gives you quick wins that helps you feel more motivated.
So, here's a real example. My cousin had $35,000 in debt. Student loans, credit cards, and a car loan. He listed out everything with their interest rates. Credit card $5,000 with a 22% interest rate. Car loan remainder 15,000 with 6% interest. Student loans 15,000 with 5% interest. He chose the avalanche method. That's a G right there. Focusing extra payments on that credit card while making the minimum payments on everything else. Once that car was gone, he attacked the car loan next. Whatever method you choose, the key is consistency and even avoiding new debts. Cut up those cards if you need to. I'm not judging. I actually have two wallets. one wallet that just houses certain cards that I'm not using consistently and that I don't want easy access to. And when I go out, I pick the cards that are only necessary for where I'm going. That way, when I get somewhere and I'm like, "Oh, I really want this." But I don't even have the card attached to that account or that credit card. I don't even have it in my sight. And I lock that one up in a safe as well. Remember, those minimum payments keep you in debt for years. friend. Even an extra $50 a month can cut down on your extra payment time and those interests.
Okay, y'all. Let's demystify investing. You don't need to be a Wall Street expert to build wealth. First, if your employer offers a 401k match, take it. That's literally free money. So, if they match 3% of your salary, you make $50,000. That's 1,500 of free money. And that's every year that you be leaving that on the table. For some people, a simple index fund that tracks the overall market will be just fine. Something like a total stock market index fund, it gives you instant diversification. The stock market has historically returned about 7% annually, and that's over the long term after inflation. So, quick example, if you invest $200 monthly from ages 25 to 65 with a 7% average return, you'll have over $500,000. H let's say you start at 35 instead. You'll have less than half of that. Time is your biggest advantage. What about crypto and individual stocks? Listen, that's like gambling. Only use money that you can afford to lose completely. And I mean completely. And look y'all, please ignore those get-rich quick schemes on Tik Tok. Building wealth is a marathon. Definitely not a sprint.
Now, let's talk about protecting what you're building. You need insurance at a minimum. Let me hip you to what you need. Health insurance. Even if you're young and healthy, one hospital stay in this world and specifically in the US could bankrupt you. Auto insurance, get more than the minimum liability if you can afford it. Renters and homeowners insurance, know that your landlord's insurance does not cover your stuff. Okay? And if you have dependence, and even if you don't, you need life insurance. I had life insurance when I was a completely single woman with no people to depend on me. Okay? Term life is affordable and simple. About $30 a month for a 30year-old healthy person and that's for about $500,000 worth of coverage. Now, I have some whole life policies, okay? And those return in cash value after you're done paying them all the way up. And please, once you have assets or children, you need to get a basic will. You can do this online for under $100. Even places like Legal Zoom make it easy for you to be able to sign up for a will. So, I had a friend whose apartment flooded last year. Mhm. Her $15 a month renters's insurance covered $7,000 worth of stuff. And that's what I call a really good investment. So, you going to get brunch or you going to get some insurance. You decide.
So, there you have it, family. Financial literacy in 10 minutes. To recap, track and manage your spending. Build that emergency fund. Next time, I want to hear that you have built it. Okay. Tackle your debt strategically. Invest early and consistently and protect what you're building. The most important thing to remember, financial freedom is not just about being rich. It's about being able to say yes to opportunities and no to situations that don't serve you. And all my ladies, you need that. Start where you are and use what you have and do what you can. Even small steps add up to big results over time. And y'all, if you have been having some successful money habits or some money flops and some difficulties or some previous stories you want to share here, go ahead and put them in the comments. We learn from each other here. We learn and we grow with this community. Ain't no shame in our game. So, drop your questions in the comments. Y'all know I love to chat with you. And don't forget to like and subscribe for other real talks about money. and check out the links below for my LTK where I share my affordable fashion hacks and favorites and skincare and hair care and everything in between for you. All right, y'all. I got you. Dr. Nina signing out. Peace. [Music]