If this post is totally unrelatable/boring/annoying please let me know in the comments and I won’t do any more finance posts!
The other day I wrote about how I bought my house. I think it was the first time I really talked about finances on this blog, but it made me wonder if finances are something we should talk about more? Mostly every one who reads here is around my age, and therefore certainly has money on their mind. Whether that’s learning to budget better, wanting to save for a house, just trying to pay the bills or needing to put more money away for retirement, we’re all thinking about $$$.
Today I want to talk about how I got my finances on track. Just five years ago I didn’t think it would ever be possible for me to buy a house or save enough for retirement and now I feel confident about my finances. That all came down to one thing for me: taking a good hard look at my spending habits with a financial advisor.
When I turned 25 I started seriously thinking about my future and what I wanted it to look like.
Meeting with a Financial Advisor
I didn’t know anything about financial planning so I decided to meet with a financial advisor. My goal was to find a way to plan for three things:
1. Paying off my student loan.
2. Saving to buy a house.
3. Being able to retire early.
Before I met with my financial advisor I was asked to send a few things over in advance of our meeting including: bank statements, 401K statements, student loan statements and credit card statements.
I was scared to send these things to a stranger, but I took comfort is knowing that his job was to help people get on track. Surely he must meet with people from all walks of life. I couldn’t be the only person just treading water, unsure of what I needed to be doing to meet my financial goals. I learned a lot of things in school but how to pay my taxes and how to save for retirement were not on any syllabus I ever received!
My advisor went through all of my statements before we met and put together a 3 year, 5 year and long-term plan for me which we covered in our first meeting. He looked at my income, savings and bills and then told me how much of my money I should be allocating to various things each month. He told me how much I needed to save and put into investments in order to retire early and maintain a high quality of life.
My advisor looked through my spending habits and brought some things to my attention. He didn’t tell me that I should cut back on any one thing (eating out, Starbucks, etc.) he simply showed me how much I was spending on these miscellaneous items each month and let me come to my own conclusions.
Basically I Was Throwing Money Away!
Seeing the amount of money I was spending each month on things like eating out and getting Starbucks made it easy for me to decide for myself that I had to make a change. Shamefully I was averaging about $700 per month on eating out and getting coffee
sometimes usually twice a day. Those $5 coffee purchases add up quick!
When I exclaimed “OMG, this must stop!” my advisor told me to ease into it.
I didn’t say “I will never eat out again” because that’s not reasonable. Adam and I often eat out as a social activity with each other, with friends and with family. Sure there are other things we could do but eating out is convenient and it’s enjoyable!
Instead of scaling back to $0 I scaled back to spending $250 a month on eating out. That meant my grocery bill went up a bit higher but not nearly by as much as it cost me to eat out. Now I do little things like making my own coffee at home. That alone saves me about $200 per month!
The additional ~$450 I started saving went to good use! I could pay extra on my student loan payment to meet my goal of paying it off. I also put part of that $450 into my savings account which eventually helped me put a big down payment on my house. I also started investing which is helping me to pad my retirement savings. I have an IRA through my employer but I opened an independent investment account as well.
Investing and Saving
I don’t manage my own stocks, but I would like to someday! A coworker and I were just talking the other day about how to pick good stocks. She said she invests in Trojan because she can’t envision a near future in which condoms aren’t needed. We also discussed how toilet paper companies are probably safe to invest in! 😀 One of my goals this year is to learn more about stocks and to use that knowledge for good!
I can’t recommend seeing a financial advisor enough if you feel unsure about your future or meeting your money based goals. Many times one of your employee benefits will include free sessions with an advisor, and if not many banks offer free meetings with financial advisors. I paid to meet with someone I found on my own, but Adam has met with the financial advisor provided through our bank (Bank of America) and has had really good experiences!
You may be thinking that your finances are too out of whack to even think about meeting with an advisor. Maybe you don’t have any savings at all, or you’re not contributing to your retirement plan. That’s okay, even more of a reason to meet with a financial advisor!
If you’re in credit card debt, your car payment is a struggle to make or you’re otherwise feeling sick about your finances now is the time to speak with an advisor. Did you know that a financial advisor can provide you help in lowering your credit card interest rate? And also provide advice on how to refinance your car loan into one that is more affordable?
There are so many little tips and tricks for saving money and spending money wisely that the general population (aka most of us) just don’t know! I really think meeting with a financial advisor was one of the best decisions I ever made.
BTW this is my favorite financial advice blog to read!
Ask me anything about what its like to meet with a financial advisor!
-I can’t give you financial advice but I can tell you about my experiences!
Do you invest in stocks? How do you choose which stocks to buy?
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