Financial Success In 3 Easy Steps / by Mrs. Financial Lifter

In November, I ordered the Mindful Budgeting Planner from Cait Flanders. I wanted December to be the first month I started tracking my spendings and earnings. I’ve used apps like Mint and YNAB (You Need A Budget) but it wasn’t working for me. I preferred to manually track everything.

What’s Your Net Worth?

Your net worth is defined as assets minus liabilities. Robert Kiyosaki defines an asset as anything that puts money in your pocket. A liability is anything that takes money out of your pocket. Liabilities are car payments, student loans, and credit card debt. Assets are stocks, bonds, and real estate property. Your net worth can either be negative or positive.

Cash Flow Patterns in  Rich Dad Poor Dad  by Robert Kiyosaki

Cash Flow Patterns in Rich Dad Poor Dad by Robert Kiyosaki

I’m grateful because my parents paid for college so I wouldn’t have any student loans. I went to San Francisco State University and worked my ass off to graduate in 4 years. When my oldsmobile broke down and the gaskets needed replacing, my dad sold me his 2010 Honda Civic. We sold the oldsmobile for what we could and $4,000 later, the Honda Civic was paid off. Other than paying my credit card in full monthly, I don’t have any liabilities.

Calculating/Tracking Your Net Worth

I use Personal Capital to calculate my net worth. The app allows you to register and link your accounts (401K, IRA, mortgages, loans, checking and savings). Best part about it is that it’s free and can be accessed on various platforms.

Spendings And Earnings

I’ve tried tracking my spendings monthly before and it was too stressful. I felt overwhelmed looking through receipts and bank account statements. It wasn’t until I got the Mindful Budgeting Planner that I started tracking daily. I like this planner for multiple reasons, one of them being that it’s evergreen. That means the dates aren’t pre-filled and you can start whenever you’re ready. I highly recommend this planner because it’s been a life changer for me.

Set Up Automatic Contributions

For many years, I fell into the habit of saving only what was left over after paying my bills. The amount was never consistent and it was the bare minimum. When I started working full-time in April, I set up automatic contributions so I could max out my 403b and IRA by the end of the year. The money is taken out prior to getting paid and it isn’t taxed. By paying myself first, I’m consistently increasing my net worth and putting myself into a lower tax bracket.

“But what about having enough to pay your bills?” You’ll figure it out. I know I did and 7 months later, I’m doing just fine.

In Conclusion

  1. Start tracking your net worth via Personal Capital. Whenever I see my net worth increase, I know I’m one step closer to early retirement and financial freedom. It helps me reevaluate how and where I’m spending my money.

  2. Tracking your spendings can seem like a chore but it’s the best thing I’ve done. I spend 2 minutes (probably less) at work figuring out what I spent the day before and write it down. At the end of the month, I calculate the total. I visually see the areas I need to make adjustments in and where I could have saved more or spent less.

  3. Set up automatic contributions and aim to max out your retirement accounts.

Statistics have shown that the typical working age American has no retirement savings and they’re working longer because they can’t afford to not do so. Saving for retirement is important and the earlier you start, the better off you’ll be.

Spend less than you earn-invest the surplus-avoid debt-J.L Collins