Do This EVERY Time You Get Paid (Paycheck Routine)

0:00it's Friday just got paid new shoes new

0:02restaurant movies and it's gone when it

0:05comes to Payday it's hard to know the

0:07best things to do with your money so

0:09today I'm going through step by step the

0:11eight things you need to do with your

0:12money as soon as you get paid the first

0:14and most important thing you need to do

0:16is find your financial Baseline when it

0:19comes to personal finance most people

0:20feel like it's too much work but that's

0:23why most people struggle 64 of Americans

0:26live paycheck to paycheck because they

0:28commit one of the worst Financial

0:30mistakes in Psychology they call it

0:32mental accounting basically it's when

0:34you mentally categorize your money

0:36instead of physically writing it down in

0:38May you might receive a tax refund from

0:40the IRS and you mentally categorize this

0:43as extra fund money you get excited and

0:46start spending it a new PS5 a new TV or

0:49Mr magic lamp the problem is just money

0:51is the same as your regular income you

0:54just pay too much in taxes and the IRS

0:56is just returning it the good news is

0:58the solution is simple open up a spray

0:59spreadsheet and take account of all your

1:01monthly expenses rent internet pineapple

1:04pizza floss so putting all this together

1:06in a Google sheet was a great way for me

1:09to discover how much I needed to survive

1:11every month with my current lifestyle

1:13I'm self-employed so my income varies

1:15widely and this is just a great number

1:17to know all right now for the real work

1:19delete the expense items that aren't

1:21your core Essentials yeah that means

1:23Netflix staplers your Candy Crush

1:25subscription and then sign up for my

1:27free Weekly Newsletter rethinkable to

1:29build a wealthier and healthier life

1:31link below after a grueling

1:33self-reflection moment you should end up

1:35with just a few core expenses first

1:38housing which could be rent or mortgage

1:40generally you want this to be under 30

1:42of your income second groceries and food

1:45about 10 of your income third insurance

1:48and utilities like internet cell phone

1:50and electricity about 10 this number now

1:53becomes your financial Baseline the

1:55absolute bare minimum you need to

1:57survive each month aim to keep your

1:59Finance Baseline under 50 percent of

2:02your total income if it's over look for

2:04expenses that you can easily swap for

2:06cheaper ones do you really need that

2:08apartment with an indoor pool a phone

2:10plan that has satellite coverage or free

2:12range organic pasture-raised avocados

2:14knowing your financial Baseline builds

2:17the foundation for the next step what

2:19would it feel like to have saved up to

2:20six months worth of expenses in your

2:22bank account at all times imagine the

2:25kind of freedom and peace of mind you'd

2:27have knowing that if you ever got sick

2:29lost your job or get injured you'd be

2:32completely fine this is why having an

2:35emergency fund is crucial mathematicians

2:37explain why with the Murphy's Law

2:39basically everything that can go wrong

2:42will go wrong instead of asking your

2:44parents for money again or pulling out

2:46your credit card going further into debt

2:48you will have something to fall back on

2:50a study found that as much as 56 percent

2:53of Americans can't afford an unexpected

2:55one thousand dollar expense and 22

2:58percent don't have any merge agency fund

3:00at all I remember when I got into a car

3:03accident when I was 20 that cost me

3:04about five thousand dollars to fix if I

3:07didn't have any emergency funds saved up

3:08I might have needed to take out a loan

3:10and paying back that loan with interest

3:12would have easily cost more than seven

3:14thousand dollars generally you want your

3:17emergency fund to cover six months of

3:19your financial Baseline if your Baseline

3:21is three thousand dollars a month you

3:22need to save eighteen thousand dollars

3:24for emergencies emergencies don't

3:26include a wild Night Out Vacations or

3:29pineapple pizza Cravings the money

3:31should only be used when all hell breaks

3:33loose when your house floods when you

3:35get stranded in the middle of nowhere

3:36and have no other options basically when

3:39your life is Fubar that's when you use

3:42your emergency fund once you fill your

3:44emergency fund immediately move to the

3:46next step 77 of American adults are in

3:49debt and this is something that we've

3:51just all accepted as the norm maybe we

3:54bought luxury clothes we didn't need to

3:56keep up a lifestyle we couldn't afford

3:58or purchase new furniture sure when we

4:00could have used Craigslist one of the

4:02worst things with debt is that it

4:04strangles your monthly income when

4:06you're paying hundreds of dollars or

4:07more for your credit cards your car

4:09loans it quickly eats up the amount you

4:12can save and invest so forget about

4:14cutting back on Avocado toast and iced

4:16coffee because paying off your high

4:18interest debt will save you thousands in

4:20interest and fees if you have a credit

4:22card balance of sixty five hundred

4:24dollars with an interest rate of 19.5

4:26percent and you decide to only pay the

4:29minimum payment of a hundred and thirty

4:31dollars per month it's gonna take you

4:33eight years eight years to pay it all

4:35off with an additional six thousand

4:37dollars in interest so what's the best

4:39strategy to pay off your high interest

4:41debt early there are two ways to do this

4:43you could tackle the high interest rate

4:45loans first credit cards payday loans

4:47car loans stuff with an interest rate of

4:4910 or more pay off the highest interest

4:51rate first and then move on to the next

4:53loan this is called the Avalanche method

4:55and mathematically speaking is the

4:57cheapest and most efficient way to pay

4:59off your loans another option is called

5:01the snowball method although it is less

5:03efficient it takes a more psychological

5:05approach instead of focusing on the

5:07interest rates you tackle the smallest

5:09loan amount first you'll be able to pay

5:11these off quicker which builds momentum

5:13and motivates you to keep going for me

5:15when I first got serious about personal

5:17finance and paying off my debt I

5:20Consolidated everything into a Google

5:22spreadsheet it contained each debt the

5:24amount I owed and their interest rate

5:26every time I made a payment I would open

5:28up the spreadsheet and manually adjust

5:29the remaining amount every other day I

5:31would visualize paying off the debt

5:33until everything went to zero and this

5:36motivated me to keep pushing after you

5:38pay off your high interest debts you'll

5:40have a bit more wiggle room with your

5:42monthly income but before you do

5:44anything you need to prioritize the next

5:46step when it comes to investing most

5:49people think of flashing screens day

5:51trading and aggressive screaming but

5:53apart from what you've seen on Wolf of

5:54Wall Street investing doesn't need to be

5:57hard or overwhelming the basics are easy

6:00and once you're familiar with them you

6:02could make millions in your lifetime

6:04Einstein once said compound interest is

6:06the eighth wonder of the world he who

6:08understands it earns it he who doesn't

6:10pays it compound interest is the reason

6:13that you should have started investing

6:14yesterday over time the stock market

6:17returns about 10 percent a year meaning

6:19your money will essentially double every

6:2110 years without you needing to do

6:23anything if you invest six thousand

6:25dollars each year from 25 to 65 years

6:27old with an annual return of 10 you'll

6:30end up with a total of over 2.7 billion

6:33dollars if you choose not to invest and

6:36instead you just keep that money under

6:37your mattress you're gonna end up with a

6:39total of two hundred and forty thousand

6:41dollars that difference is huge and that

6:43can easily change your life you can get

6:45my free investing starter kit to learn

6:46the basics of Stock Investing to easily

6:49and confidently start investing today

6:51link below the problem is which

6:53investing account should you invest with

6:55first taxable brokerage 401K Ira HSA a

7:00knowing which to prioritize will

7:01maximize your returns and minimize your

7:04taxes for most people you should first

7:06put money into your 401k account a

7:08workplace retirement plan that offers

7:11matching contributions essentially free

7:13money if your 401k plan offers this

7:16match contribute enough to meet the

7:18matching amounts when it comes to your

7:19401k not only can you get free money you

7:23can also lower your taxable income if

7:25you earn ninety thousand dollars a year

7:26and your employer matches up to three

7:28percent of your salary that means

7:30they'll give you twenty seven hundred

7:31dollars of free money if you contribute

7:33ten percent of your 90k income to your

7:36401k plan when tax season comes you'll

7:39only pay taxes on eighty thousand

7:41dollars instead of your 90k salary after

7:44you max out your employer match with

7:45your 401k contribute to a Roth IRA

7:48account unlike the 401K where

7:50contributions are pre-taxed with a Roth

7:52IRA contributions are post tax which

7:55means you'll first pay taxes on your

7:57ninety thousand dollar salary before you

7:59can add it to your Roth IRA the

8:01advantage of a Roth ra is that you don't

8:03have to pay taxes on any of the earnings

8:05in this account and you can withdraw

8:07your contributions at any time so even

8:09though you're contributing money into a

8:11retirement account you can withdraw

8:13money from the principal whenever you

8:15want after taking advantage of your

8:16retirement accounts it's time to invest

8:19with a regular taxable brokerage unlike

8:21the 401K in Roth IRA there aren't any

8:24obvious tax advantages but it is one of

8:27the next best places to invest your

8:29excess money for me personally I've been

8:31investing with MooMoo for years and for

8:33a limited time if you create an account

8:35with my link below and meet the deposit

8:37requirements you can get up to 16 stocks

8:40for free with all my investment accounts

8:42I primarily invest in low-cost mutual

8:45funds for the long term when you invest

8:47for the long term you're not checking

8:49your account every day week or month

8:51you're putting your money in you're

8:52making sure you have everything set and

8:54then you're checking it maybe twice a

8:56year but you're not stressing out every

8:57time the stock market is having a pen

8:59attack the problem is most people just

9:01can't stomach the ups and downs the

9:03market takes and over the past year

9:05things have been looking a bit dicey

9:08normally this is when people make one of

9:10the worst Financial mistakes in finance

9:12they call this timing the market

9:14basically it's when the market isn't

9:16doing too hot so you decide to stop

9:18investing or pull all your money out and

9:20wait on the sidelines to get back in the

9:22right time there's two problems with

9:25this first you don't know if the stock

9:27market is going to go lower or higher

9:29because no one knows just like how

9:31economists have predicted 30 out of the

9:33last three Market crashes second even if

9:35you pull out at a really fantastic time

9:37when the stock market was really high

9:39and then it crashes you need to be right

9:41a second time to put it back in at the

9:44right time the best solution based on

9:46hard data in math is to Simply invest a

9:49fixed amount every month consistently

9:50doesn't matter whether it's going up

9:52doesn't matter if it's going down let's

9:54say you invest 200 into Apple stock

9:56every single month for five years if

9:58you're investing a fixed amount amount

9:59of money each time you buy you'll get

10:01more shares when the stock price is

10:03lower and fewer when the stock price is

10:05higher over time this will minimize the

10:08cost per share you pay for your stock so

10:10if you have three hundred dollars to

10:12invest and you're looking at a very

10:13volatile stock called magic lamp company

10:15in the first month it's ten dollars per

10:18share in the second month is five

10:20dollars and the third month is twenty

10:22dollars here's where dollar cost

10:23averaging comes in say you want to

10:25invest a hundred dollars a month for

10:27three months so at the end of three

10:29months you would have bought 10 shares

10:31in the first month 20 shares in a second

10:33month and then five shares in the third

10:35month so now you have 35 shares for 300

10:38for an average price per share of eight

10:41dollars and fifty Seven cents your price

10:43per share isn't the cheapest at five

10:45dollars per share assuming you could

10:47tell the future and bought everything in

10:49the second month but it's also not the

10:51most expensive at twenty dollars per

10:53share if you bought everything in the

10:55third month after you invested move on

10:57to the next step when it comes to life

10:59time is the most valuable resource it's

11:02the only thing we can't buy more of at

11:04the end of the day it doesn't matter how

11:06much money you have or save if you don't

11:08actually have the time to enjoy your

11:10life in economics they call it

11:12opportunity cost basically the time you

11:14spend doing something is time not spent

11:17on doing something else on Sunday you

11:19might spend three hours washing the

11:20floors wiping the windows throwing out

11:22the trash but what if you spent those

11:24three hours working on a side hustle if

11:26you can make ninety dollars in three

11:28hours and you can hire someone to clean

11:30your house for thirty dollars then your

11:32time might be better spent on the side

11:34hustle over time you can use the

11:36difference to invest grow your money and

11:39buy even more time back to do more of

11:41the things you love write down tasks

11:43that you absolutely hate to do cleaning

11:46a toilet mowing the lawn or driving 40

11:48minutes to get groceries write down how

11:50much time it takes you to do each task

11:52how much money you could be making If

11:54instead of doing this test you were just

11:55working on your side hustle then look

11:57into how much it costs to hire someone

11:59else to do the task so putting all this

12:01together was helpful to see if it made

12:03more financial sense to hire someone to

12:05do something or to keep doing it myself

12:07but the most important step of all is

12:10this I remember for a long time I did

12:12everything manually paying my bills

12:14saving for a house investing the problem

12:16is this takes dedicated time and brain

12:19power every week in Psychology they call

12:21it decision fatigue basically when you

12:23make a lot of decisions during your day

12:25the quality of each new decision

12:27decreases over time in the morning you

12:29might be able to make really great

12:31choices one after another but later that

12:33evening when you get closer to ten

12:35thousand decisions you might make

12:37mistakes that you later regret buying a

12:39pair of airpod Max Mr magic lamp or this

12:42overpriced stapler but what if I told

12:44you that you can easily automate your

12:46finances so you never need to think

12:48about it again when it comes to setting

12:50up guideline automation it's going to

12:52save you so much time and headache in

12:54the long run nowadays I don't have to

12:55think twice about whether I paid my

12:57bills if I invest it this week I don't

12:59need track anything because I know it's

13:01already done here's how to do it first

13:03make sure your paychecks are

13:05automatically deposited into your

13:06checking account then with your bank set

13:09up automatic transfers to move your

13:10paycheck into the first of two new

13:12accounts your spending account and your

13:15savings account your spending account

13:16includes fixed monthly bills and

13:18essential expenses like groceries gas

13:20and pineapple pizza by knowing how much

13:23you normally spend in a month set

13:25spending targets for non-essentials like

13:27restaurants movies and Uniqlo then set

13:30up automatic transfers at the end of the

13:32month to move what's left over into your

13:34second account savings from here the

13:37money and savings should flow into

13:39whichever step you're at saving for an

13:41emergency fund paying off high interest

13:43debt investing or opportunity costs and

13:46that leads me to something that you've

13:47got to start accepting and it's not even

13:49if you're doing all these steps

13:51sometimes you still might not feel like

13:53you're not doing a good job financially

13:55and that might be because you don't know

13:57these 14 subtle signs click here to find

13:59find out you're financially doing better

14:01than you think

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