If you read my first blog post (here) you’ve gotten a glimpse into how I got started with personal finance. It is an incredibly simplified version of events and does not get into how I ended up with a particularly avoidant money psychology in the first place (surprise, it is a learned mindset!) or how problems still show up for me today. Change for me has been exponential, sure, but there have also been step changes along the way and times when I have even backtracked both in money psychology and in my systems around money.
However, just like the S&P 500, the trend is always positive and little steps at a time have gotten me to this place. So what were the crucial steps that I took to build a better personal finance psychology and life? I’ve laid out the steps below and would be interested to hear what you all think.
Number 1: Get familiar and get curious
I started getting familiar with personal finance concepts by listening to podcasts and getting curious about concepts that I heard over and over again. Slowly, things started piecing together for me. I learned about, what money can be used for, how it works and flows, and how it is a tool in achieving freedom and financial independence (not needing to work and living off of your investments). This foundation was critical in getting comfortable with the topic on my own time from experts that I enjoyed listening to and trusted.
The first podcast I couldn’t put down was The Financial Feminist (Her First 100k). You can scroll back to her earliest episodes where she breaks down things like money psychology, the financial game plan, what investing is and how to do it. The basics! I listened to these nonstop and sometimes went back to episodes of hers that were especially helpful (the financial gameplan is epic!). As someone who knew close to nothing about personal finance, this was a helpful and accessible place for me to start.
As I progressed in my personal finance journey, I started listening to Ramit Sethi and the Money with Katie Show. I would highly recommend both. Interestingly, Katie also started with podcasts as her first step in familiarizing herself with personal finance.
Number 2: Take informed action, but DON’T OVERTHINK IT
The experts I mentioned above are great resources and generally beginner friendly. There is so much information out there, so go to your trusted sources; they will have the perspective and information you are seeking. I would even recommend understanding where they differ. For example, comparing Tori Dunlap’s (Her First 100k) perspective on the “order of operations” of money vs. Katie’s. Neither are right or wrong, there are just slightly differing perspectives and it is up to you what resonates most with your personal situation.
Once you have some ideas on how to get started (I started with investing some money and opening an HYSA account for my emergency fund). Try it. Go for it. Follow the instructions that these experts lay out and see what happens in two weeks, one month, etc. If you are building an emergency fund, don’t overthink what platform to use. It’s more about taking small steps in building your confidence versus making the “perfect” decision. The world won’t end when you start your emergency fund with Ally, for example. You can always change platforms!
Number 3: Get clear on your goals and continue to check back in
It is important to understand your short and long term goals. And don’t worry, they can change! Just because it is a goal to take an awesome vacation next year that you are saving for, you are allowed to change your mind and decide to use that for something new. The point is to build the muscle of understanding what you want in life so that your money systems can get you there.
My advice is to just start setting some goals and checking in on them every so often so that:
- Your goals still align with what you really want, and
- You are building habits to come back and check in with yourself and your progress
This is the foundation for getting started and maybe even moving beyond that to a higher level of thinking when it comes to long term goals.
In the comments let me know if you have anything to add or what is challenging you most right now!
If you do nothing else, just take consistent steps every day whether that is listening to a podcast for 10 minutes or finding a personal finance blogger that you like. There are many resources out there that promise you can learn personal finance in 1 hour. Or that they have the complete guide, or you need to start with budgeting. With anything in life it is more complicated than that. So be patient with yourself, get interested, and just listen to one podcast or read one chapter of a book every day.
Let me know if you’d like some advice on where to start!
Warmly,
Your personal finance friend