How to Financially Beat the Average American
The average American faces rising debt, no savings, and is secretly scared about their financial future. But you don’t have to be average.
My 4 Laws of Personal Finance to Secure My Future
The average American faces rising debt, no savings, and no security about their financial future. But you don’t have to be average. These four fundamental laws have helped me break free from the cycle, build wealth, and secure my financial future. Let me dive into the strategies that have separated me from financially insecure to financially secure.
Law #1: Spend Less Than You Earn (Every Single Month)
This is the simplest form of being good with money. Most people fail to follow it. According to studies, the average American spends $1.22 for every $1 earned. Which is insane 🤯 Here’s how to flip the script:
Track Your Expenses: Look at your statement before paying off your credit card. I do that + I use RocketMoney which connects to all of my accounts and helps me log and track everything. Awareness is the first step to control.
Create a Monthly Budget: I do a basic, here's everything I need/want to spend money on in an excel sheet (or Google Sheet). I sum up the balance and for me it's way less than I make. Then I budget the rest for savings and spending.
Example (not actual):
Income: $10,000/mo post taxes
Expenses:
Rent $1200/mo
Coffee $240/mo
Car Insurance: $160/mo
Phone: $100/mo
Gas: $300/mo
Total Expenses: $2,000
Rem: $8,000
Invest: $2,000
Cash Savings: $4,000
Dates: $500
Food: $500
Tithe: $1,000 (10%)
Rem: $0 (A Zero Dollar Budget)Eliminate Lifestyle Inflation: This is one of the hardest for me, because lets be honest, you want the best lifestyle afforded to you, you want to live in a nice area, you want to drive a nice car, you want to eat at good restaurants etc. But, resist the urge to upgrade your lifestyle in the early years of your life, especially your 20s. Your invested $ is just worth too much in the future. Instead, funnel extra income into investments or, if you have debt, debt repayment. (Will side note* If you have debt, pay it off ASAP. Debt free is the best way to live! There's no better feeling of freedom then a Paid off car, house, or anything else, do not be a slave...be debt free)
Action Step: Start a 30-day spending challenge (official MF7 guide coming soon). Track every penny and cut unnecessary expenses by 10% (save 5% in cash, and invest the other 5% in stocks)
Keep reading with a 7-day free trial
Subscribe to Will Haddock's Journey to keep reading this post and get 7 days of free access to the full post archives.