Personal Finance is a journey, but the path is well defined no matter when you start. Despite the financial world becoming more complicated, the access to advice has never been easier. One time in college I started to ask my Art History professor, "I googled this painting and - ". Before I could finish the sentence he cut me off. Google was not a viable option for discovering knowledge. It was probably solid advice at the time, but today "Just ask Chat" - a phrase you hear more and more these days eferencing the use of ChatGPT - is actually good advice. It's a tool that everyone can use (OK - same goes for Google's AI search tool, but I'm partial to Chat) to better understand their financial plan.
So how do you start? We think understanding basic knowledge through multiple-choice questions is a fun way to learn. Whether you're needed a refresher on budgeting so that you can get yourself out of debt or how to best use high-yield-savings-accounts, or you're ready to allocate your earnings into a 401(k), we've hopefully got a place for you to start your personal finance journey.
For me, it took years before any of my W2 paycheck was being saved. In my 20s life things seemed cheaper, but the money came as fast as it went. I was fortunate that my debts were small so paying them off was priority number one. After that though I wasn't very savvy and basically let a cash pile accumulate while the market began to get hot. I missed out then and realized it too late. I had to start putting my money to work. I signed up for a brokerage account and started to automatically allocate a portion of my paycheck monthly to the account. Every month or so I'd rebalance, but I was picking individual stocks that I like and losing as much as I was making. After a lot of activity without a lot to show for it I came across the Bogleheads approach - set and forget into broad based ETFs or indexes. Sure I still pick some stocks, but the majority goes to a total US market ETF (VTI) and it's served me well without the regular upkeep. I mix in a few other Vanguard ETFs that cover bonds, real-estate, emerging and European markets.
Stay tuned for another blog on robo-investors. It's not something I've personally used, but the appeal is clear for those who really want to automate investing.
Once a regular monthly or quarterly routine is in place for savings, then the strategy becomes tax avoidance through 401(k), Roth, IRA, etc. accounts. And most importantly, the strategy becomes about TIME and PATIENCE. Stick to the plan, contribute regularly, and ask for help along the way. There will be market swings and times when savings may decrease or pause for major life events likes mortgages, kids, etc. These deviations are expected and should be celebrated so long as the original path remains clear and you can navigate back to it.
Just remember that journey is measured in months and years and built on strong daily habits. Clear CC debt, build some savings, invest that savings, be smart with your money. Pay your taxes, but not more than you need to! Over time the trickle becomes a creek and then a widening river as financial indpendence and retirement comes into view. That river eventually meets the beach where we'll meet again with our feet in the sand.