How We Started Our Financial Freedom Journey
First of all, we are NOT financially free. Let’s just clear that up haha.
I started this journey at the end of January after my friend, Dominique, recommended we watch the video “Secrets of the Millionaire Mind” by T. Harv Eker on Youtube. It’s a really long video, but it’s totally worth it. I broke it up in pieces and took a lot of notes.
I thought it would be hard to only live off 55% of our income, but we canceled a lot of our subscriptions, consolidated our debt, and really put ourselves on a budget to make sure we were able to tuck away 45% of our income for our savings.
I set a goal for our finances so we could afford to put a down payment on a house before Summer 2021, and we reached 75% of the goal by the end of 2020. So when I tell you this works, I’m not kidding.
Google Spreadsheets is my friend.
I’m a math nerd. I love numbers. I made myself an extensive spreadsheet that breaks down all of our accounts, all of our income, all of our spending, and how much money we need to save for taxes (hello, multiple steams of income). I log into our bank account at least 3 times per week to plug numbers in, and the spreadsheet lets me know exactly how much money I need to put into each account based on our income. I also set it up to tell me how much money we have left to spend for the month, and how much I need to transfer to Digit to save for Taxes.
Check out Digit. It's a service that automatically saves your money, so you don't have to think about it. Get $5 when you use my link.
Here is the breakdown of our accounts:
Financial Freedom Account
10% of our income
I decided to make Betterment our Financial Freedom Account. I’ve been using Betterment since September 2011. I created a “Cash Reserve” account because of the 1.8% APR at the time. The pandemic/recession caused that rate to drop to .4% (APY varies with the Federal funds rate). But that’s still better than the 0% rate my current savings account has. So the Cash Reserve is a great choice.
Start investing with Betterment. Use my invite link to get started with a special offer today.
Education Account
4% of our income
You’re never too old to learn, but I also know we don’t need to have a ton of money saved up for our own Education. So that’s why we’re only dedicating 4% of our income to this account. I decided to use Acorns for this. The “Round-Ups” are set to Automatic, and we also have a “Recurring Deposit” of $12.50 every Thursday (basically $50/mo). With the Round-Ups and Recurring Deposits, the spreadsheet helps me figure out what else is due to the account.
Start investing with Acorns today! Click here to sign up, and get $5 when you use my invite link.
Stock Market/Savings
10% of our income
Betterment was the only thing I knew in terms of investing, and then I found Robinhood and my life changed. I have earned almost $1000 since starting my account in March. And I’m a NEWB at trading. So yeah, it’s pretty cool. But with the way the economy is going with the new wave of stimulus checks that are literally being created out of nothing, the value of the American Dollar is decreasing and Crypto Currency is the safer way to go. So just be careful and do your research before you dump 10% of your income into the stock market.
8 Things Every Stock Market Noob Needs to Know
Join Robinhood with my link and we'll both get a free stock
Play Money
10% of our income
This is the most important account. T. Harv explains why this account is so important in the video. We use Cash App for this. I add 5% to my account, and I sent 5% to Roody. I actually invest most of my cash app money into the stock market to turn $20 into $25 (or $20 into $65 like I’ve done with Tesla), and I use the rest of the money to buy silly stuff that I find on Instagram.
Giving
11% of our income
We are proud Christians. Tithing is a part of worship. 10% is what the church asks for, but I like to give offering as well. That’s where the extra 1% comes in. If we earn $500 for the week, we give $50 for tithes and $5 for offering. Simple. And we give via Venmo.
Was that a lot? Trust me, this is only the beginning. I plan to write a lot more about this throughout the year, so hold on tight! It’s going to be a wild, incredibly fulfilling ride :)
