The simple technique to never again run out of money before the end of the month

never-again-run-out-of-moneyYour latest paycheck is in the bank and life is good. Until the end of the month. Suddenly, you need to pay the credit card bill, and you don’t have enough money. What happened? You should have had enough money, but somehow, it’s just not adding up. If this feels familiar, today’s short post will give you the relief you’ve been searching for.

Keep it simple

We make things too complicated in life, when it’s usually the simplest solutions that work the best.

I’ve been working on new ways to stay organized, and there’s a simple approach that works so well: choose 1 thing and do that first.

Sure, I have to do 20 things today, but what’s the 1 most important? The 1 most likely to be procrastinated? The 1 that must be done so I can do others? Today it’s writing the first draft of this post. That way later on I can edit it, add a photo, and so on. So the key is to do this first instead of leaving it for later and getting stressed out if I run out of time and can’t get it done. By doing this first, I will feel relieved and relaxed. And then I can do the rest of the items on my list and feel good about my productivity.

Why not do the same thing with your money?

The absolutely unavoidable must-pay items

Make a quick list of the bills you pay every month and circle the ones that must be paid no matter what. You know the ones. Probably your rent, the electric bill, last month’s credit card bill, any other debt payments, and a certain amount of groceries.*

When you get your paycheck, pay those immediately. No matter what. If you can’t pay them that day (maybe you won’t do a month’s worth of grocery shopping on payday) then put that money into a separate account. Right now. Or take it out in cash and put that cash into envelopes clearly marked for each purpose. That way you won’t accidentally spend that money on something else.

If you get multiple paychecks per month, you can divide these expenses between the paychecks. However, your goal should be to eventually pay these bills with your first paycheck of the month and to use any other paychecks for discretionary expenses, which we’ll get to in just a minute.


By taking this one step, you just assured that you will not run out of money this month for your most important expenses. Whew! That’s a relief, right? So let’s take it one step further.

Pay yourself second

Now that the most important bills have been taken care of, it’s time to pay yourself. Put some money into your nest egg. This could be a retirement account, emergency fund, or savings for travel. It could be $5 or $5000 – do what works for you at this moment and plan to increase it later.

You just got paid today and you’ve already taken care of your most important bills and you’ve put money into savings. Way to go!

Spend without worry

Now that your non-negotiable expenses and savings are taken care of, you can’t possibly run out of money before the end of the month. Whatever you have left can be spent, and it’s up to you to choose how you’d rather do that. You can go out to dinner, buy a new sweater, or buy a plane ticket for your upcoming trip without worry or guilt.

Be sure to do this spending using a debit card or a prepaid credit card, because if you often run out of money before the end of the month, you don’t want a credit card to give you a false sense of increased funds.

What about X?

Right now you might be wondering about all of the items I didn’t include. Well, those are up to you. Gas for your car might be a non-necessity, a luxury, in which case if you can’t afford it at the end of the month, you’ll be riding a bike and walking a lot. Or it might be a necessity so you can get to work every day, in which case you’ll put money aside for it in step #1.

In the end, everything will fall into one of these 3 categories:

  • necessary expense/debt payment
  • savings
  • everything else.

It’s up to you how you prioritize each one.

Goodbye stress!

After your first paycheck, you should start to notice a decrease in stress. This isn’t the only technique you’ll use to manage your spending, but it’s an excellent way to get things under control so you have the emotional space to address the details of your finances. Give it a try, and then let me know in the comments how it works out for you!

*If you are unable to cover these bills with your paycheck, then you have a problem. Go through each of your “necessities” and see which can be lowered or cut out completely. Then look at ways to increase your income. You must find a way to earn more than the cost of your necessities.

3 easy recipes for people who don’t cook

Have you ever thought, “I know cooking would be healthier and save me money, but I don’t have time/don’t know how/am bad at it”? Yeah, me too. All 3. That’s why I want to give you three easy ways to get started cooking at home. Because believe me, if I can do it, you can do it.

Side note: All of these can be gluten-free by substituting where needed – if you’re gluten-free, you’ll know what to do.

Keeping it simple

I was known as a terrible cook. Occasionally I’d make something decent and whoever ate it (including me!) would be truly shocked that it wasn’t horrible. And I really hated cooking. I’d rather spend my time doing so many other, better things.

Eventually I decided enough was enough. For my health, my budget, and my self-esteem (time to get on with this being-an-adult business) I figured it was time to learn.

So I started simple. Very simple. And went from there. Like with so many things in life, simple was the way to go. So we’re starting with simple.

The basics

These meals are all inexpensive because I’m the Nest Egg Chick after all. But they’re also healthy, because I value my health and yours. (I’m no nutritionist though, and everyone is different, so make sure you’re eating the foods that work for you.) Most of us include certain basics in any meal: vegetables, carbs, protein. Keep that in mind whenever you create a meal.

#1 Veggies, beans, and rice

2016-09-21-19-24-00This is one of those meals that looks harder than it is. Ah, just the way I like it. I posted this recipe in the Nest Egg Chick Facebook group recently, so if you’re in the group, you might recognize it. If you’re not a member yet, please join us!

~$6-9 in ingredients should produce enough for 4-6 meals.

  1. Boil water and add rice – follow the instructions on the bag or box. While that cooks, do the rest.
  2. Peel and cut up garlic, throw it in a pan with some olive oil. Use however much garlic you like – if you’re like me and you like a lot of garlic, use more (4-5 cloves.) Put on medium-low heat. (Don’t let the garlic burn.)
  3. Wash and cut up veggies. In this case I used 4 carrots, 1 summer squash, and 2 zucchini. Add to the garlic. (Hint: add the harder veggies first – in this case I put in the carrots and let them cook for several minutes while I cut up the squashes.)
  4. Let cook for a while. Stir every couple minutes
  5. Rinse a can of cannellini beans. These have lots of nutrients. Dry beans are even better, but we’re starting easy. When the veggies have started to turn soft and are almost done, add the beans. These cook fast.
  6. Add some salt and pepper. Add other spices you like (I used parsley.) Start with a little, taste, and add more as needed. This can mean you’ll do a lot of tasting – one of the best parts of cooking!
  7. Eat!

This was so fast that when the beans and veggies were done, I had time to read for a bit while I waited for the rice to finish.

#2 Eggs, avocado, toast, and veggies


Eggs are awesome. They’re inexpensive and nutritious. They’re also easy to cook and super versatile. You can poach them, fry them, scramble them, hard boil them, soft boil them, and so much more.

Today we’re keeping it simple:

~$2 for a meal.

  1. Put toast in the toaster.He
  2. at a bit of oil in a pan – not too much.
  3. Crack each egg into the pan. Don’t worry if the yolks break – as you practice over time, img_20160922_184534you’ll get the hang of it.
  4. Add stuff to the eggs. Sprinkle evenly over the top. I like to add some cut up garlic (1/2 clove), cut up scallions (2), a pinch of salt, a pinch of pepper, and in this photo there’s also parsley.
  5. Check the eggs after a few minutes (in the meantime, move on to the next steps.) When the bottoms are golden brown, put a spatula under them and flip them over. This takes some practice, but you’ll get it. Cook until the second side is also brown.
  6. Cut an avocado in half. Cover 1/2 with plastic wrap and put it back in the fridge.
  7. I like steamed veggies with this. Put the vegetable of your choice (frozen spinach works well) into a bowl with just a splash of water. Cover the bowl and put it in the microwave for 1 minute. If it’s not done, stir it and put it in for another 30 seconds. Keep returning it to the microwave until it’s finished. Add a bit of salt, pepper, or other spices if you want.
  8. Put the toast on a plate. Add the eggs on top. Scoop avocado on top of the eggs. Add the vegetables on the side. Yum!

This is a favorite of mine when I want something fast and warm, but without much effort. It also doesn’t involve many dishes, so cleanup is fast.

#3 Not your average saladvegetables-449950_1920

Wait a minute! I know I just used the word “salad” and you immediately pictured lettuce and tomatoes for lunch, but that’s not quite what I’m suggesting. That totally wouldn’t do it for me for a meal. No, my salads are a lot more. Here are my components:

~$2-6 for a meal.

  1. Vegetables. Throw in whatever you like. Lately I’ve been eating romaine lettuce, carrots, cucumbers, and snap peas.
  2. 1/2 avocado. This is healthy and filling.
  3. Protein. Sometimes I add nuts. Sometimes it’s tuna. Add cheese, chicken, tofu, or whatever else you like.
  4. Fresh dill. Trust me. (Warning: you’ll never want to eat a salad without fresh dill again.)
  5. Extras are fun. Add dried cranberries, apples, hummus, corn, sesame seeds, or whatever else you can think of.
  6. The dressing of your choice.
  7. Eat up!
  8. For a fork-free approach, wrap everything in a tortilla.

I eat a lot of these salads on the go because they don’t have to be refrigerated, aren’t messy, and can be thrown together fast whenever I realize I don’t have any leftovers handy. In fact, I’ll be eating one tonight because I’ll be eating dinner on the train. I’ll just throw a container of this in my bag along with a fork and I’ll be all set.

Also, they’re super healthy, which means I can eat more chocolate later. Wait, no, I didn’t mean that. Really.

Bonus: The easiest way to add chicken to dishes

Sometimes you want to eat something like chicken but you want it to be quick and easy. Maybe you want to add it to the salad above. Or a meal looks a bit light and you know that adding some chicken will totally do the trick.

Personally, I don’t like cooking chicken often, especially if I only want a single portion. It’s too much effort and besides, I don’t always have it in the fridge. That’s why I freeze it after it’s cooked!

Cook the chicken however you like best. Fry it, bake it, or use my method: the crockpot. I put 1-4 pounds of chicken in my crockpot (also called a slow cooker,) set the timer, and walk away. Hours later I have perfectly cooked, moist chicken.

Once the chicken cools, I shred it, then put it into ziplock bags in single serving sizes. You’ll have to estimate the amount here, and try not to do this when you’re super hungry. The last time I did this when I was hungry, my portions were huge! I put all of these individual bags into a freezer bag and into the freezer. Then, whenever I want some chicken for just one meal, I pull out a baggie of cooked chicken!

This has been incredibly helpful and again, it just makes things easier.

Getting started

If you’re not in the habit of cooking, it can be hard to get started. Instead of saying, “I’ll get to it,” make it a priority. Put a note in your calendar right now. Choose one meal that you’ll prepare at home and block out time to make it. Go to the grocery store in advance so you have all of the ingredients that you need when you’re ready to start. Then enjoy eating healthy, inexpensive food at your own convenience!

Saving $$$

Do this just twice a week and be amazed at how much money you save. As you cook more often, you’ll see bigger savings. Figure out how much you’re saving and put that amount into your nest egg account every week so you can be sure you’re putting it towards your priorities. I have seen clients save hundreds of dollars every month by cooking more for themselves.

And it all starts with making one extra meal at home. So what will you start with? Please comment with one of your quick, easy, or otherwise favorite dishes so we can all get ideas for new ones to try!

Debts be gone! Turn past regrets into future successes


“A year from now you’ll wish you’d started today.” — Nick Loper

I have 2 questions for you:

  • What do you wish you’d done a year ago?
  • What would you like to have done one year from now?

These questions apply to a lot of areas of our lives, but right now, let’s talk about money (because, you know, this is Nest Egg Chick after all.)

The “I wish I’d….” feeling

It’s so easy to look back and say I wish I’d done something differently. I wish I’d eaten less sugar. I wish I’d learned out how to change the oil in my car. I wish I’d saved up $500 so that now I’d have the money for that thingamajig (yes, that’s the technical term) that I need.

But we often say these things in passing and then forget about them. Instead, I’d like you to pull out a pen and paper and write down 5-10 things you wish you’d done in the last year.

Done? Good.

Now it’s time to stop wallowing in the past and get excited about the future!

The crystal ball approach

If you’d had a crystal ball, maybe you’d have done a few of the things on your list. But what if you had a crystal ball and could see ahead to 1 year from now? Life is hard to predict, but we’re only talking about 1 year from now, so take a guess: what do you think you’ll wish you’d done 1 year from now?

(Hint: some of those things are probably on your list from the past year and others probably aren’t on the list yet.)

If you stay on your current path, do you think that 1 year from now you’ll wish you’d saved up money for that trip to Prague that you’ve always wanted to take? Will you wish you’d put money into your retirement account? Will you wish you’d paid off your credit card bills?

Be specific

Those things are all well and good, but it’s too easy to skip out on general stuff. Let’s get specific!

How much will you need for that trip to Prague? $4500? How about the retirement fund? Will you wish you’d saved $100? $1000? $10,000? How much will it take to pay off the credit card bills? $3000? $20,000? Write down your numbers!

Make the future you happy

Knowing this stuff is nice, but it doesn’t help you at all unless you do something about it. So let’s do something!

Write out everything on your crystal ball list. Then choose the 1-3 most important items, the ones you’ll have wanted the most. Remember, you might not be able to do everything you’d like to do this year, so choose the things you’ll care about the most.

Be realistic. If you earn $60k per year, paying off $20,000 in credit card bills might not be doable. So maybe your goal is to pay off $10,000 and to finish it off the following year.

Now stretch your goal. If you earn $60k per year and you have no debt, then saving $500 for retirement is good, but I bet you could save a whole lot more! Why not aim for $2000? (In fact, you could probably save $10,000, but if you’ve never done it before, then it’s ok to start a bit smaller and build up later.)

Let’s do this!

Write out your list with your specific number goals and put it someplace where you’ll see it every day. The bathroom mirror or your phone’s home screen are great spots. This is your list of inspiration and focus. 1 year from now, you’ll be thanking yourself for doing this!

Divide your numbers into manageable chunks. Divide by 12 to get a monthly goal, or 52 to get a weekly goal. Maybe divide by 365 and put that amount aside every day.

Put this money someplace separate. Don’t leave it in your checking account where it can easily disappear. Put your Prague travel, debt, retirement, or whatever other dollars into a separate bank account so it will be there 1 year from now when you need it (except for the debt payments, of course, which will be there for your monthly payments.)

Next, figure out how you’ll make it happen. Remember, there are exactly 3 ways to increase your savings and/or pay off debt: increase income, lower expenses, or do both. I prefer both, but do what works for you.

Check out my tips on lowering expenses and consider ways to increase your income. Take a look at out this post on fixing your finances in 5 minutes per day. Then implement these ideas!

Thank yourself

One year from now, be sure to thank yourself! Today-you did a very good thing for next-year-you, and next-year-you must appreciate it!

In one year, as you’re happily exploring the streets of Prague, watching your credit card debt disappear, or whatever else, you can be thankful that today-you took these steps. Then you can again set new goals for the coming year and kick ass even more!

So what will today-you do to make next-year-you happy? Please share in the comments!

The 3 biggest reasons I see budgets fail

3 biggest reasons budgets failBudgets are one of those things that are great in theory, but the reality leaves a lot to be desired.

What we’re (not) taught

I think a lot of the problem is the way we’re taught to do a budget:
– write out what you earn
– write out what you spend money on and how much you spend on it
– play around with changing the numbers until they all add up

And then, not surprisingly, the end of the month comes around and your plan didn’t work out. Because we were never taught how to make a realistic budget, a probable budget, a budget we can implement.

So here are the 3 biggest reasons that I see budgets fail:

#1: Failing to plan for the unplannable

Let’s say you’ve listed out where you spend your money and how much you think you spend in each area. First, be sure you’re tracking your expenses because if you aren’t, chances are your numbers are way off. Everyone’s are. Mine too. That’s why I keep track now.

When you list out your spending categories in your budget, you probably include rent, food, utilities, transportation, and hobbies, right? What about irregular purchases? If you take a cab home from a club once or twice a month, do you have a category for that? If you know you’ll be buying a new bed next year, have you budgeted for that?

And don’t forget about those random expenses you don’t see coming. They’re the things that, when you look back on your last 6 months of expenses, you say: “Oh, I don’t need to include that, it was just that one time.” Uh huh. The thing is, even if that was just once, something else was also just once. There’s always a random thing that was just that one time. You need to budget for those.

This isn’t the same as your emergency fund. That’s for big emergencies, like a sudden car repair or medical expense. Your miscellaneous category is for that unexpected baby shower gift, replacing the lamp you accidentally broke, or a tattoo you randomly decide to get. These things aren’t emergencies, they don’t fit into your budget anyplace else, but you need to have the money available to pay for them.

When you don’t plan for the unplannable, you run out of money before the end of the month. On the other hand, if you find yourself with fewer unplanned expenses, just carry that money over to the next month. If you continue to have extra funds, you might be able to budget a bit less and throw the extra dough into your nest egg. So you either use the money and avoid budget shortfalls, or you don’t use it and it goes into your nest egg – it’s a win-win!

#2: Failing to prioritize

Based on what we’re taught, most of us budget for what we want to have happen. And it seems perfectly reasonable because we’re looking at a spreadsheet or a piece of paper. It’s not the reality.

It’s like my to do list. I have great intentions, but too often I write down what I want to do today. I usually don’t consider just how long each item will take; if I did, I’d realize I’m trying to cram 30 hours of stuff into 6 hours and I would instead prioritize the most important items.

Your budget is the same: it’s all about priorities. A common reason I see budgets fail is because they aren’t prioritized. They’re all stick and no carrot. It looks good to say you’re going to cut back on your expenses in all areas, but is it realistic? Will you do it long term? Will you be happy if you do?

The numbers in your budget might add up, but if you stretch yourself too thin, you’ll burn out and get tired of it.

Instead, ask yourself: “What are the most important things in my life? What makes me the happiest?” Then do your best to put more money towards those. And they might not be immediate items. It might be that saving for a house is what makes you happy, so when you cut back on dinners out, you need to remember you’re doing it for your house. Or when you do yoga with YouTube you’ll remember you cut back on classes so you can pay off your debt faster and have the joy of living debt-free.

And remember, this how to plan to spend your money right now. There’s no law saying you can’t change your mind later. This year might be all about concerts and debt payments. Next year might be all about tennis lessons and saving for a house. You can’t do it all at once, so prioritize for the now.

#3: Failing to change behavior

You finally have your budget. You’ve planned for the unplannable and you’ve prioritzed to focus on only the things that matter most to you (and those you can’t avoid.) Congratulations!

Now what are you going to do about it?

Because it’s not enough to say you’re going to cut back on dinners out. You need to plan some meals to make at home, buy the ingredients at the grocery store, and schedule time to cook. If you don’t, you’ll just end up ordering takeout again.

Taking fewer cabs and Uber rides is a good idea, but if you don’t buy a bus pass today or fix up your bike, you’ll end up taking Uber when you’re too tired to walk.

It feels great to decide to pay off your credit card debt faster, but if you don’t have plan for putting that money aside, it might accidentally be spent on something else.

If you keep doing what you’ve done before, you can’t expect a different outcome. But all too often, that’s what happens. If you want a different outcome, you need to do things differently. And it’s not as hard as you think!

Don’t try to change everything at once. That’s too much. Change one behavior per week. And make a plan. Write out each change you’d like to make, and how you will make it happen. Do it now and start slow.

This week, cook one extra meal at home. Next week, buy a bus pass. The following week, set up an automatic transfer from your checking account to a new account you’ll use just to pay down your debt. Keep making small changes and you’ll be amazed at the results!

Why I don’t like budgets

At this point, you’re probably shocked to hear that I don’t like budgets. But if you look back over all of my posts so far, you’ll see that I never discuss them. Budgets aren’t mentioned anywhere in this site’s name. I think budgets can serve a good purpose, but they frustrate me.

It’s too easy to fail at budgeting for the reasons above and for others. Then when someone almost inevitably fails, it makes them reluctant to continue working to improve their finances.

It makes sense. You try the thing that you’ve always been told is the best and only way to do it. You fail. You give up. I don’t blame you.

Or you fail, but you keep at it without knowing how to fix things, and you don’t see your financial situation improve.

So many people give up when they could have succeeded, if only they’d had better tools.

Budgets and you

Budgets aren’t for everyone, but if you like them, go for it! Just be sure to avoid the pitfalls above. Then please come back here and let me know how you’re doing in the comments! And ask any questions you have – I’ll be glad to answer them.

Save money by wearing your favorite clothes

Save $ by wearing favorite clothesI’ve said it before and I’ll say it again: we all make money mistakes, so don’t feel bad about yours. Learn from them. Then move on. But today isn’t about your money mistakes. It’s about one of mine and how you can avoid making the same one (or recover from it if you’ve already made it.)

I didn’t even notice

It started so innocently (as they often do.) I’d recently reconnected with an old friend and she invited me to join her on a shopping trip. I was used to shopping alone or sometimes with someone who had a very different style than me. This was a very different experience. She dressed in a similar style to mine, but better. And she shopped in similar kinds of stores to the ones I liked, but ones that were new to me. So I felt like I was improving my style. And I suppose I was, to some extent.

She liked to shop. A lot. And it was fun to go together. We always shopped the sales and used coupons that we got through the stores’ mailing lists. And these weren’t high end stores, either. So the clothes weren’t that expensive.


Collectively, they really added up. But I didn’t think about that until much later. At the time I didn’t think of it at all. After all, it’s not like I was going into debt. I could totally afford it.

Uh huh.

I wasn’t going into debt, but I could have been putting that money towards so many better things. I wasn’t keeping track of my spending back then, so I had no idea how much I was really spending. I glanced at the credit card bill, and it always looked ok so I never gave it another thought. And I definitely never added up the clothing costs over the months and years.

couple-1298432_1920The shirt

On one of those shopping trips I got this shirt that was great in theory. It was sexy but not obvious. It fit just right. But I kept seeing it in my drawer and never putting it on because it wasn’t really me. I just couldn’t find a place to wear it.

And then it happened: I had the perfect occasion. I finally cut off the tags and did my best to rock that shirt. Yes, it was a good purchase!

Then one winter, as I did my biannual clothing swap (summer clothes away, winter clothes out or vice versa) I noticed that shirt. I’d owned it for at least 2 years and I’d only worn it that one time. Why did I buy this again?

I looked at the other shirts I was pulling out. There were some that I didn’t wear much. I didn’t even like some of them as much as I used to. Same for the pants. Hmm.

Time for a change

I didn’t think I was buying all that much. I usually only bought a couple things when I shopped, sometimes less. The problem was that I’d shop on a Saturday afternoon if I had nothing else to do. Or if I wanted to hang out with friends who liked to shop. It wasn’t because I needed anything.

Then again, I often looked at my wardrobe and felt, “I have nothing to wear.” I’m sure you know what I’m talking about.

But I had that shirt and other clothes that I almost never wore. And I was having trouble squeezing everything into my dresser. So something was wrong.

Taking baby steps

I sorted out my clothes. From now on, I decided, every time I wore something I would move it to a specific drawer. After several months I looked at the “not worn yet” drawer to see what was left and I decided it was time to get rid of those. Well, some of them. Maybe. It was hard to let go.

Around this time I started reading about Project 333. I just came across it randomly, but it appealed. The idea is that you wear only 33 items of clothing for 3 months. After 3 months you choose another 33 items. Everything else gets packed away to the back of the closet. I couldn’t imagine doing that, but if all of these people could get buy on 33 items, surely I could wear less than I had been, right? Many people wear even less than that.

But it got me thinking.

Eventually I decided that I had enough clothes and it was time to get away from the “I have nothing to wear” mindset. If I didn’t love to wear my clothes, I shouldn’t have them. More than that, I should only buy clothes that I would want to wear a whole lot. That’s the point of Project 333: if you only wear 33 items, you’re going to make sure they’re items you love, and that means you’ll end up wearing your favorite clothes every day.

clothingAnd then a leap

Surprisingly, I ended up doing Project 333 after all. Even more surprisingly, I love it! I look forward to switching out my wardrobe every 3 months. And when I do, I remember the hell that switching seasons used to be. It would take hours to lug multiple suitcases/duffels out of the closet, sort through everything, try things on to see if I still liked the way they fit, and find a way to make it all fit in my available drawer and closet space.

Now it’s quick and easy. I take one suitcase of off-season clothes out of the closet. I pull everything out, decide which 33 items I’ll wear, and take a few minutes to consider if I should keep the rest – after all, I don’t like them enough to keep them in my 33. The newly off-season clothes go back into the suitcase and into the closet. The whole thing takes maybe an hour. Easy!

Shopping without a budget

I still buy clothes, but it’s rare now. Usually twice a year I’ll consider if I need anything new for the season. After all, clothes get worn out, misshapen, and stained. They go out of style. They stop fitting. If I do need something new, I’ll buy one or two things to round out my wardrobe and that’s it. I have fewer clothes, so I know exactly what I’ve got and what I really need. And I’ll be sure I really love them. After all, they take up precious space within my self-imposed limit of 33 items.

It’s easier and faster to buy only a few items a year, but even better, I don’t think much about the cost! Ok, I’m not shopping in stores that sell $500 jeans. And I do check price tags to be sure everything is reasonable. Still, there’s a lot more leeway when you know you’re only buying a couple of items and that will be it.

Funnel clothes $ to your nest egg without major limits

If you’re at the point I was at 10 years ago, limiting yourself to 33 items sounds ridiculous and impossible. But you might still want or need to cut your clothing budget. You’ve probably already heard advice like:

  • pay for clothes only in cash and limit the amount of cash you carry with you and
  • stay away from the stores (and web sites) altogether.

I happen to think these are great ideas, but they aren’t for everyone. So what can you do?

Follow the money

There are all sorts of estimates out there for what people spend on clothing but those numbers mean nothing. What matters is what you spend.

First, pull out some recent credit/debit card statements and add up your clothing purchases. Don’t guess; look at the statements. How much have you spent? Figure out how much you’re spending per year. Now multiply that by 10. If you’re spending $100 per month (to use a round number), that’s $1200 per year, and $12,000 after 10 years. Think what you could buy with $12,000! That’s a car. It’s a good start to a downpayment on a house. It’s many vacations. It’s even more than $12k if you invest it.

Why 10 years? Because it’s not so far in the future that you can’t picture it. Imagine 10 years from now if you’ll be wishing you’d spent more money on clothes that lay neglected in your closet or on those other things. My guess is it will be those other things. It is for me, anyway.

high-boots-1531280_1280What’s in your closet?

Now that you’re sufficiently motivated to save some of that dough for other things, let’s forget about money for a minute. Instead, let’s talk clothes.

Grab and pen and paper. How many shirts do you think you need? How many shorts? Pants? Skirts? Dresses? Shoes? Coats? Take a guess for each category. Include everything. Just make a quick list and put a number next to each category. This should only take a minute.

Now, how many of each category item do you think you own? How many pants do you have? Bras? Shoes? Take a minute to write these down. These are guesses. No one else will see the list. So just make some quick notes.

Do you have your list? Good! Now set aside some time to actually count what you’ve got. If you live in a climate like mine, you might have off-season clothes packed away. Count those too if you can. If you don’t have time now, just do what you have out. Go through your drawers and closets. Count it all and note the numbers on your list. Were your guesses right?

If you have a lot more than you thought (and you probably do) don’t feel bad. The point now is to consider this the next time you shop.

Oh, and don’t worry, I won’t ask you to get rid of anything. That’s not what we’re doing here. Just ask yourself: how many pairs of pants do I need? Are 3 enough? Do you need 10? And how many have you got? If you think you need 5 and you actually have 12, then you have plenty.

Shop your wardrobe

The next time you have the urge to buy clothes, look at your list. Let’s say you want to buy a new sweater. Check your list. You figure you need 5 sweaters. You have 8. Pull them out and take a look. Maybe there’s something in there you forgot about. There’s a good chance you don’t need a new sweater after all.

Or maybe you look through your sweaters and 1 is stained, 2 don’t fit anymore, and another is completely worn out. You decide to buy 1 new sweater, and you know you won’t buy any more, so you make sure it’s one you love. As long as it’s in your new and improved clothing budget, go for it!

5 minutes once a month

At the end of each month, take 5 minutes to pull out any clothes you haven’t worn recently. Put them at the top of your drawers. Move them to a more obvious part of your closet. Make sure they don’t get hidden under the clothes you wear more often.

If you notice that you’re pulling out the same clothes every month, ask yourself why you aren’t wearing them. Why are you letting these clothes take up precious space? Would you miss them if they were gone? If not, consider donating them.

And be aware of these clothes. Every time you want to shop, ask yourself, if you have clothes you don’t wear, do you really need to buy more?


Forgetting money again, think about how much time you’ve spent shopping for clothes. Maybe you love shopping. Maybe you just bought things with a click of the mouse. But it was still time. If there’s anything you want to do and you hear yourself saying you just don’t have time for it, here’s your chance!

Now that you’ll be shopping less, spend more time on a hobby, hanging out with friends, getting stuff done, exercising, volunteering, or whatever else you’ve been wanting to do. You’ll easily fill up the time and you’ll wonder how you ever had time to do so much shopping to begin with. If you can’t figure out how to fill up that time, comment below and I’ll help you figure out something fun to do.

Saving money without thinking about money

As you’ve noticed, the point here is to save money without focusing on the money part. Instead, it’s about being satisfied with the clothes you’ve already got. If you feel that you don’t need to own more, you won’t buy more. And not wanting more is the easiest way of saving money I’ve ever found.

All that’s left is to take that newfound savings and throw it into your nest egg funds!

How will you change your wardrobe? Comment below and let me know. I’d love to hear all about it!

For more tips on increasing your savings, please sign up for the Nest Egg Chick mailing list below:

Start fixing your finances in 5 minutes per day

Start fixing your finances in 5 minutes per daySomething unexpected happens when you write down what you do.

I did a food diary once. Ok, I’ve done them a few times, but the first time was the one that surprised me the most. It wasn’t just what I ate that surprised me, but also how my diet changed immediately simply because I was recording it. The same thing happened when I tracked how much time I spent on Facebook. And when I tracked my spending. The changes were small, but they made a difference.

And the thing is, you don’t need to track all of your spending to get started. I think that’s a great thing to do, don’t get me wrong, but if you’ve been putting it off because it feels like too much, there’s a simpler way to get started.

We’ll start with the surprises I discovered, then I’ll explain this simpler approach.

Surprise #1: The whats

I guess the first surprise was sort of expected, but still…. We all think we know what we’re eating, spending, and looking at online. The thing is, we’re usually wrong. We want to   believe something, so we convince ourselves it’s true, or at least close to true.

My eating, spending, and Facebook habits were worse than I’d realized. D’oh! Well, at least now I knew.

Surprise #2: Avoiding the thing to avoid the writing down of the thing

The part I hadn’t seen coming was how I’d avoid doing something just so I could avoid writing it down. I wouldn’t reach for that cookie, because I didn’t want to have to put it in my food journal. I wouldn’t click over to Facebook because I didn’t want to log the time. I’d pass on buying the doohickey so I wouldn’t have to note it down.

In hindsight this makes perfect sense, but I hadn’t seen it coming. Just the act of keeping cookies-1387826_1920track of these things changed my behavior. This was true of my food journal, which I knew my nutritionist would be reading, and of my spending log, which was only going to be seen by me. Why did it matter? I knew it shouldn’t, but writing each thing down made it real in a way that simply thinking about it did not.

Writing it down turned it into a hard fact, something undeniable. I had to admit the truth at this point. When the truth felt good, there was no problem. When the truth felt bad, there was an internal conflict. It was easier to avoid the thing than to convince myself that my values were completely wrong. Sometimes the easy way out is a bad way to go. In this case, it’s perfect!

Surprise #3: A little awareness saves a lot of money

I wouldn’t think that making such tiny changes would have an impact, but it did. My diet changed, my spending improved, and I’m spending less time on Facebook and more time doing other things that I had felt I didn’t have enough time for. Have I reached my ideal goal for each thing? Not entirely. It’s a process. But I have seen significant improvement and I’m happy with that.

Go small

Instead of tracking everything, try tracking one thing. It can be anything, really, but for books-1394336_1280obvious reasons let’s focus on spending. Is there an area that you suspect your spending is a bit high, but you’re not quite sure? If I asked, how much money do you spend on books/clothes/snacks/entertainment could you give a fairly accurate answer? Choose one area and track every penny you spend in just that area for 1 month.

Why 1 month? Because it’s enough time to see a bit of a pattern, but not so long that it’s overwhelming. This shouldn’t take you more than 2-3 minutes per day.

Keep it simple

There are a lot of ways to track this stuff, but don’t get fancy. That just distracts from what you’re actually doing. Use a pen and paper that you always carry with you, or a notepad app on your phone, which is the e-version of a pen and paper. Simple.

Every time you purchase something in your category, write down these four things:
1) The date
2) The amount
3) The purchase
4) Any relevant notes – (optional)

So your log might look something like this:


Then what?

Like I said with surprise #2, there’s a good chance that you’ll make some small changes in your purchasing decisions just by writing everything down. You’ll be more aware of everything, and you might not want to have to record something. But there’s another step I’d like you to take.

At the end of each day, glance at your log for the day. Add it up and write down the total (writing the total will help you add up all the days later on.) Ask yourself, does the total surprise you? Don’t feel bad if it does, just acknowledge it at this point.

Now, at the end of each week, do the same thing. Just take a quick glance again and note the total, and notice how you feel about it.

At the end of the month it’s time to really take a look at what you wrote down. Set aside an hour for this. You might spend less time on it, but you don’t want to feel rushed.

First, what’s the overall total? Is it what you expected? Less? More? Why is it different? Did you spend a lot on a particular day? Did you spend more on weekends or weekdays? Was your spending even throughout the month?

Look at the subcategories. Did you spend more in one area or another? If you tracked books, maybe you spent more money at used bookstores and less online than you’d expected. If it’s food, maybe you spent more on coffee and less on dinners than you’d thought.

What does this mean?

Every month is different, but to get an idea of how you’re spending could add up over a year, take your total and multiply it by 12. If you spent $200 on clothes, how do you feel high-boots-1531280_1280about spending $2400 per year on clothes? If you spent $30 on apps, how do you feel about spending $360 per year on apps? If you spent $130 on coffee and pastries on the way to work (as based on the example chart above,) how do you feel about spending $1560 in a year on coffee and pastries?

And if you’re looking to build up your savings, a great way to do that is by cutting back on spending a bit. You don’t need to go extreme. Start small. Do you think you can cut back on some of your spending in this category that you tracked?

If your answers to those questions are that you feel good about those amounts, then great! Track a different category next and see if you find some room to trim the spending there. (Note: If you’re trying to pay off debt, make an effort to cut back in every category, even if it’s a small amount.)

If your answers are that you don’t feel good about it at all, you’re spending way more than you thought, and you’re wondering how it happened, then the next step is to consciously make some changes. Try different ways of changing your spending until you find what works for you. Keep tracking your spending so you know what’s working and what isn’t.

To continue with the example above, if you feel that you spend too much money eating out, try cutting out all stops for coffee on the way to work. Eat breakfast at home, or use the coffee machine at the office. If that doesn’t feel like the right move, try cutting back to only 3 days a week. If that works but it’s not enough of a savings, try bringing your lunch to work 2 days a week.

You don’t need to change everything at once. Choose one approach and just see what happens. Compare your new spending log to your old one and appreciate the improvement!

Are we millionaires yet?

Like I said in the title, this is a great way to get started. You won’t get rich overnight. And I’d be cautious about anyone who promises overnight riches with 5 minutes of daily work. But this will work over time.

Once this works for you in one category, you’ll probably be excited to try tracking more of your spending. Choose another category or, if you’re ambitious, track all of your spending! The more you do, the bigger the results you’ll get.

What to do with the extra dough

As you cut back on your spending, sometimes intentionally and sometimes accidentally, you’ll need to do something with that money. Look at your tracking notes to see how much you’re saving, and make sure you don’t randomly spend that money on other things. It’s time to put it to work for you!

You need to decide what to do with that money. What are your goals? Make careful choices to use it for paying off debt, building a travel fund, adding to your retirement savings, or whatever else you’re aiming for. If you keep putting that newfound savings into a savings account for, say, a car, then before you know it, you’ll have the cash you need and car payments will be a thing of the past! Maybe you’ll even split it: put some money towards one goal and some money towards another. Now that you have some extra money each month, you have all sorts of options!

Your homework for today

You’re reading this because you want to see some improvement in your money situation. There’s no time like the present! This will only cost you about 5 minutes a day (2-3 minutes each day to track what you spend, and 1 hour each month to review it.) So what have you got to lose? Try it for one month and see the results! I dare you to try and prove me wrong 😉

Your homework is simple. Step 1: Choose one category right now that you will track for the next month. It can be anything you spend money on that that isn’t a fixed monthly price (your rent isn’t the most useful thing to track, since you already know what that is.) Pick anything! Clothes, music, groceries, hobby crafts, sports equipment, meals out, entertainment, or anything else.

Step 2: Commit to tracking your spending for 1 month.

Step 3: Decide how you’ll keep track. Personally, I like using a pen and paper. You can also download a notepad app, which is a plain text app. Or you can use my tracking spreadsheet. Enter your email in the box below and I’ll send it to you today.

Now go get started! There’s nothing to lose and lots to gain. Remember, you won’t get rich over night, but these small steps will add up to big success!

What happens when you buy $1000 of llamas on a credit card

$1000 of llamas on a credit card 1 (2)Credit is an awesome thing. You can take something home or have an experience without even paying for it! Yet. Because you will pay eventually. And when you do, it can be surprising how much it costs. But we’re not taught that part up front.

I’d love to say I knew exactly how credit cards worked when I got my first card in college. I remember being really excited. I also remember not having a clue. Because no one ever taught me this stuff. They rarely teach it in schools and the few times they do, we’re 16 and think we know everything so we hardly pay attention. (Oh come on, admit it, I know I wasn’t the only teenager who thought that.) You take out a college loan because that’s what you’re supposed to do and besides, everyone else does it too. You use loans to buy a car because how else will you do it? And then suddenly you have piles of debt.

You want to get rid of it, but it feels insurmountable. You’ve been told it will hold you back, but you can’t see how it really matters. It doesn’t seem to affect your life, but it’s niggling at the back of your mind. Sound familiar?

So let’s talk about debt, how it works, and what to do about it.

The messages we hear

“Debt is no big deal.” “Debt is the devil!” “Everyone has debt.” “No one should ever have debt.” “It’s not like you can avoid debt.” “It’s so easy to avoid debt.”

I hear these things all the time. Everyone has different opinions on debt and I think that’s great. It’s good to have opinions.

The problem is that news articles talk about debt being bad, but not why or how. Ads point out the benefits of credit cards and loans, but not the downsides. Credit is handed out and accepted like ice water on a hot day. There’s a lot of talk, but not a lot of information.

“Good debt”

Then there’s the talk about “good debt.” Personally, I don’t think there’s any such thing. Yes, making regular payments on your debt can raise your credit score. But you can also have a high credit score without having any debt at all. My friend Jane never had any debt in her life and her score is in the mid 700s.

The only debt I can ever imagine having is a mortgage, and that’s because buying a house without a mortgage is impossible for most people. But that’s it. And that debt still isn’t good! (Some people get stuck with medical debt and that is a failing of our healthcare system. It should never happen, but it does all too often. The best you can do is pay it off as soon as you’re able to. I’ll get to that in a minute.)

I believe any other debt is bad.

A car loan is unnecessary.

Credit card debt is evil and will weigh you down.

And school loans should be avoided as much as possible, though I recognize that won’t always be an option. If you want to be a doctor, for example, you have to go to medical school and you probably won’t have the cash for that up front. But you’ll be working in a high paying job so you can pay it off soon after you graduate. I can understand school loans that lead to degrees that in turn lead to well paying jobs. I can not get behind school loans for degrees that won’t pay well. I’ve learned a lot since I got my degree in Spanish. (Yeah, I did the liberal arts thing.) Unfortunately, few people make that distinction during their senior year of high school when they apply for loans.

Now, I hear what you’re saying. If you want to get a degree in some liberal arts field that won’t pay well, you should be able to do that. I get it. The thing is, you’ll be chaining yourself to that debt for the next 30 years, so you better be very sure that’s what you want. If you’re ok with it, that’s fine, but make sure you fully understand it. Everyone else does it, but that doesn’t mean it’s the best approach. My big problem with debt isn’t simply that people have it, but that they take it on without understanding what will happen. It’s hard to explain this, so let me show you.

And don’t worry, if you already have debt, I’ll show you what to do about that, too.

What you’re really paying for those llamas

Ok, I admit that I have no clue if you can buy llamas with credit cards. I’m using llamas as an example because they’re more interesting than most things I can come up with, and lama-190040_1280   because I was reading a book about crochet today that just made a funny joke about llamas and alpacas. Plus, look how cute they are! And you just can’t argue with that kind of logic.

So let’s say you decide to buy $1000 worth of llamas. (Or a new iphone with accessories. Or a plane ticket.) You don’t have the cash, so you put it on your credit card. How much will the llamas cost you in the end?

Aside from their food and shelter, of course.

Well, that really depends on when you pay off the credit card. Let’s check out a few possibilities. We’ll assume the interest rate on the card is 18.99%. Some are more, some are less. This is a good middle ground. And we’ll also assume you don’t put any other purchases on this card until the llamas (iphone, plane ticket, whatever) are paid off, because it just makes things simpler to follow.

Option 1: Pay it all when the bill is due

If the bill comes and you pay the full $1000, then the cost to you is $1000. Now you just need to ask yourself why the hell you spent $1000 on llamas, especially since you live in an apartment. Your roommates aren’t going to like this!

Option 2: Make minimum payments until you get down to $25, then pay it off

You set up your account to automatically withdraw minimum payments from your bank each month. Then you forget about it. Eventually you check in, and when you see the balance at $25.01, you just pay the darn thing off already.

Because at this point it’s been 30 years and 8 months since you bought the llamas. The llamas died, and you were still paying for them! If you used that $1000 to buy an iphone, you’ve gone through about 15 phones by now, and you’ve moved on to 3D holograms and teleportation, but you’re still paying for your old 2016 iPhone6 and accessories. You’ve now paid $1542.92 in interest. That’s in addition to your original $1000 charge. That means you’ve paid a total of $2542.92 for $1000 worth of llamas!

$1000 was a great deal for those llamas, but would you have knowingly paid $2542.92? Would you have paid $2542.92 for the iphone or for the plane ticket?

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Option 3: Make minimum payments plus an extra $25 every month

You did the math and you decided that minimum payments weren’t the best way to go. Instead, you figured you’d throw some extra money at the llamas every month. You decide you can pay an extra $25 and still have enough left over to keep the llamas happily gorging on hay.

Your first month’s payment is $50.83 (the minimum balance of $25.83 + $25 = $50.83.) You set up the automatic payments and forget about it.

2 years and 10 months later you make the final payment of $12.06. The llamas are a bit older, but they’re doing fine, munching on hay and doing whatever else it is that llamas do (hey, I’m a city girl, I’m just getting my information from Google.)

You end up paying $258.05 in interest. When you add back in your original $1000, the llamas cost you $1258.05! That’s a whole lot less than Option 2, but still a lot more than you’d planned to spend. Would you have still bought the llamas (or phone or plane ticket) if you’d known you were really spending $1258.05?

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If you’d like to play around with your own numbers, keep reading and I’ll give you the tool to do it automatically.

Here’s the point, and what you should do instead

Whether your debt is currently $50 or $500,000, the important thing is to understand the role that interest plays in it and to know how much you’re actually paying in the end.

Sometimes debt is your only option, but usually it isn’t. In most cases, if you can’t afford to lama-841217_1280pay cash for something, you can simply not pay for it. Maybe you could put off buying the llamas for a few months, until you can earn some extra money to pay for them up front. Maybe you can use your phone for another 6 months because it’s really doing decently. Or you could buy a used one for cash, instead. That vacation can wait until next year. Or you could go camping locally instead. Or cash in some frequent flyer miles. Do whatever you need to do so that you don’t have any debt!

And when you are considering taking on debt, look at the real cost of what you’re going to buy. Are you paying $1000 for those llamas, or $1500? Are you paying $500 for that laptop, or $800? Are you spending $2000 on that cruise or $4000? Then ask yourself, is it really worth it?

Because you might love how your ass looks in those $50 jeans, but be honest: would you think it looked as good if you were going to end up spending $125? Maybe not.

The role of monthly payments on your monthly budget

There’s another reason why debt is a problem, and this is too often overlooked. While you’re paying down your llama charge every month, what are you not spending your money llamas-451195_1920on?

Because your income is finite. That means that unless you’re taking on more debt every month (and if you are, see “What to do about it”, below) then your spending is finite. What aren’t you paying for?

If you hate living paycheck-to-paycheck and you’re paying $150 towards your credit card bill every month, imagine how fast you could built up some savings if that $150 went into the bank instead (hint: $1800 per year.)

If you wish you had more money to spend on vacations and you’re paying $220 every month towards your car loan, imagine how fast you could build up that vacation fund if you could put $220 towards it every month (hint: $2640 per year.)

If you worry that you’re not saving enough for retirement and you’re paying $500 towards your student loans every month, imagine how much you could be putting towards your 401k if not for the loans (hint: $6000 per year, plus whatever tax breaks you’d get.)

And if you’re paying for all 3, you just got a sinking feeling when you realized that adds up to $870 per month, which is $10,440 per year.

What to do about it

I bet reading that sucked. Big time. So let’s do something about it!

Because you can do something about it. I’m not saying you’ll have your debt paid off tomorrow, next month, or even next year (depending on the size of it and your income) but I can promise you this: if you don’t make a plan to get rid of your debt, it will continue to haunt you.

Now, as I always say, there are 3 ways to increase your savings: earn more, spend less, or do both. The same is true for paying off debt. I recommend doing all three. But first you need to do something else.

The absolutely positively MOST important step to paying off debt

The first thing you must do is stop making more debt. This might not happen overnight. If you’re used to spending money on credit cards that you can’t pay off right away, you’ll need to change that habit first. Take those credit cards out of your wallet. Remove them from your online shopping accounts. Hide them away for emergencies and only use cash from now on (a debit card works, too.) That way you can’t overspend.

Next, commit to making destroying your debt your new #1 priority. You WILL destroy this debt!

If you have one debt

Decide right now how much money you are going to put towards your debt every month. This needs to be well above the minimum payments. Use this calculator (just enter your email address and I’ll send it to you) to figure out how different payment amounts will affect when the debt will finally be gone and how much you will have paid in total.

Start small if you need to. $5 or $10 per month is a great start. Then plan to increase it as much as you possibly can. After you reach that amount, do even just a bit more than that.

Check out how to cut back on overspending and how to save more each week for some ideas. There are countless ways to earn extra income. Look at your calendar. Find some time to sell unneeded items from around the house. Do some dog walking. Call your cable company and temporarily stop service. Cut back on all expenses asap. The only way you’ll get rid of your debt is to throw as much money at it as you can. Remember, you’re doing this so you can gain freedom. Once the debt is paid off you can resume reasonable spending, but right now, it’s all hands on deck: the debt must be destroyed!

Are you questioning if it’s worth that much effort? Check out “What happens next” below.

If you have multiple debts

Like with paying off one debt, first you need to figure out how much you will put towards paying off your debts every month. Follow the links above for ideas to earn more and spend less. Then, make a plan for how to address each debt.

Having multiple debts can be overwhelming. You might have 9 different college loans, 2 credit cards with balances, and a car loan. Where do you begin?

Most people are tempted to take any extra money they have each month and put a little towards each debt. The problem is, by putting just a little towards each debt, the extra money gets eaten up by interest and it feels like you’re just not making any progress.

Others prefer to put all extra money towards the debt with the highest interest rate. This makes a lot of sense logically. The problem is that if this particular debt has a large balance, it can take a long time to notice any progress and that can be discouraging. It doesn’t matter how logical a plan is; if you quit, then it’s no good.

That’s why I’m a big fan of the snowball method. A friend spent years trying to pay off debts using the two methods above and kept getting discouraged and giving up. Then he tried the snowball method and suddenly he saw progress! Just a few years later he was debt free!

The snowball method is simple:

  1. Order your debts by balance, from smallest to largest.
  2. Make minimum payments on all of your debts.
  3. Take all extra money you have available each month and put it towards the debt with the smallest balance.
  4. When the debt with the smallest balance is paid off, take all your extra money each month (which should be more now, because you have the minimum payments from that smallest debt available now that it’s paid off) and put it towards the second smallest debt.

That’s it! Here, let me show you how this works:

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The advantage to this method is that you’ll quickly see progress as one debt after another gets paid off, and that will encourage you to continue. And remember, the more money you can put towards your debts, the faster you’ll pay them off.

What happens next

As you pay off each of your debts, you’ll begin to feel lighter, freer. Soon you’ll be excited to make even more progress, and you’ll probably surprise yourself by finding ways to earn a bit of extra cash or cutting back on expenses that you thought were untouchable because you want to see that debt disappear asap.

Once the debt is gone, you’ll have many possibilities before you. All of that money you were throwing at your debt every month will now be available for other things. You might choose to cut back on your income-earning activities. You might decide to resume some of the spending that you’d cut back on. But now that you have a taste of the debt-free life, you’ll be committed to making sure you never go back to the days of debt again.

You’ll beef up your emergency fund first. Then you’ll increase your retirement savings. You’ll put some money towards big future expenses: a car, travel, a wedding, buying more llamas, a house. Now that you have hundreds of dollars available every month, you’ll be able to save for these things.

You won’t worry when the bills come. You’ll pay every one on time and in full – no more debt for you!

Does this all sound lovely? This is what you’re working towards. If you feel frustrated at any point, just return to this lovely image. It’s yours for the taking! I have no doubt you can do it. The key is to go all in. A half-assed approach won’t work. But treat your debt as your #1 priority and you’ll be amazed at the great progress you make towards kicking its butt out the door!

The choice is yours

You now have the tools you need to move forward and pay off that debt. Go for it! You never again have to pay $2500 for $1000 of llamas. So what will you do? That’s what I thought! Congratulations on taking the first steps to the new debt-free life you deserve!

Did you find this helpful? Please take a moment to share this on social media with those buttons below so that your friends can get some use out of it too – after all, they shouldn’t have to overspend on llamas either.

7 ways a nest egg will make your life better

7 ways a nest egg will make your life betterSaving money is boring. Well, it’s boring until you realize all the awesome things it’ll do for you!

I could spend days talking about all the great ways a nest egg (or probably, more than one nest egg, each for different purposes) can improve your life, but today let’s focus on these 7. My guess is that at least one of them will get you itching to build your own nest eggs asap. They sure did for me! So at the end, I’ll hook you up with some easy ways to get started.

#1 Quitting your job

We’ve all had jobs we’ve hated. Think back to one you really couldn’t stand. Maybe you didn’t like your boss. Maybe you had to spend too many hours on your feet. Maybe it was boring. Whatever the reason, you wanted out! But you stayed because you needed the paycheck, right?

What if you didn’t need the paycheck, at least not right away? What if you had enough money in the bank that you could be out of work for 6 months? Or a year? Or 5 years? Would you have quit?

There’s something really freeing about having F-You Money sitting in the bank. You won’t quit your job every time you have a bad day, but you’ll know if that you’re really unhappy, you can leave and still pay the rent and buy food.

#2 Moving

Moving is expensive, and we all do it at least a few times in our adult lives. When you were cats-796437_192020 you might have borrowed a friend’s pickup truck and enlisted a few other friends to help you carry stuff in exchange for pizza and beer. But at some point, you started paying for more than pizza and beer.

As you move into more expensive apartments, the costs go up. First month’s rent, last month’s rent, a security deposit, and realtor’s fees could easily add up to $4000 or more. You might get a security deposit back from your last place, but not before you have to put money down on the new one.

At some point friends aren’t interested in carrying your stuff anymore. And let’s be honest, you’ve got nicer furniture now so you’d rather have the pros anyway. You might want to move out of state. But even a local move could cost $5000 or more. How will you move if you don’t have any cash in the bank?

On the other hand, if you have money saved up for your move, all you have to worry about is finding an awesome place to live and figuring out how to get Fluffy into her travel carrier before the movers arrive to take care of the rest.

#3 Not going into debt for every emergency

At some point you’re going to have an expensive emergency to deal with. It could be a broken water heater like Marisa’s or a sudden medical expense. Maybe you have to help your sister out of a jam or you get an expensive speeding ticket.

Those things all suck. But they suck even more if you have to go into debt to pay for them. Having a nest egg lets you pay for these things without going into debt, and that’s a huge relief. It means there’s a bit less suckiness in your life during an emergency, and don’t we all want that?

#4 That thing you’ve always wanted to do

We all have something that we’ve always wanted to do but that we haven’t for one reason or another. Personally, I’ve always wanted a dog. Dogs are expensive. Good thing I have a nest egg! Sure, food and groomings shouldn’t come out of the nest egg, but it’s reassuring to know it’s there in case my canine pal gets sick. (No, I don’t have a dog. Yet. But stayed tuned for an update on the pooch front in the near future.)

I’m not suggesting you can spend all of your savings on every whim you’ve got. But if there’s something you’ve always wanted to do, and you have enough money in your nest egg that you’ll still have plenty left for an emergency fund and your other savings, then why the hell not? Maybe you’ll even start a nest egg specifically for your bucket list.

If you’ve been wanting to see the Aztec pyramids, go scuba diving, or learn to play the piano, now’s your chance! With a nest egg, money is no longer your barrier. Go for it!

#5 Not sweating artisanal cheese

We all have things we’d like to splurge on. A nest egg won’t let you splurge on everything all the time, but it does mean you can have an occasional splurge without worrying that you won’t be able to cover some other bill before your next payday. With plenty of savings on hand, you don’t have to stress over an extra few dollars here and there. Keep it reasonable, and you can splurge here and there without sweating it.

Now excuse me while I go have some brie.

#6 Not missing out

Your friend’s wedding 3 states away. Your sister’s baby shower. Spending a week’s vacation with your best friend who now lives overseas. These are all wonderful things that you shouldn’t miss out on, but when you don’t have a nest egg, sometimes the money just isn’t there.

Now imagine getting a phone call from your best friend: she’s getting married next year and wants you to be a bridesmaid! Oh, and it will be a destination wedding! This is exciting, but you start adding it up: bridesmaid dress, shoes, gifts, bachelorette party, plane ticket, hotel…. without any savings, this would feel completely impossible. But with a nest egg, you can be happy for your friend without worry! It’s a lot of money, but you’ve put it aside so that you can have fun with the people you love, and this sure counts. So now you can relax and celebrate. (But good luck with the dress!)

#7 Your savings will grow faster

An interesting thing happens when you have money in the bank: it grows. Sometimes it grows from interest. If you invest it, you might get dividends. Or maybe it grows because subconsciously you want it to. .

I know that sounds strange, but think about it. When you’re stressed out about not having enough money, you avoid thinking about it. You avoiding checking your bank balance. You avoid adding up your bills. So what do you think will happen when you have savings? Right. You’ll enjoy looking at your bank balance. You’ll still want to avoid thinking about all those school loans and such, but they won’t stress you out nearly as much. The idea of money won’t feel stressful. So you won’t pull away from it. And when money doesn’t stress you out, you come across more of it.

Suddenly you’re willing to work a bit more for some extra cash. You cut back on spending without even thinking about it, because you’re so happy about having savings in the bank that you don’t want to diminish them, and you’d even like to grow them. You throw any extra money at the end of the month into your nest eggs without giving it much thought.

And then the next step comes along: you start doing these things intentionally! Then the money grows even faster! It doesn’t feel like effort, and you actually enjoy it, because you love the feeling of freedom you have every time you need money for something and you don’t have to stress about it.

Don’t believe me? Start a nest egg, and then prove me wrong. I dare you! Because once you get a taste of the freedom a nest egg gives you, you’ll do whatever you can to avoid going back.

Of course, first you have to get started. Put $100 in your nest egg this week by choosing one of these ideas (just enter your email address in the box and I’ll send them right to you,) then try out the others and watch your nest egg continue to grow!

Then please come back here and let me know how it’s going, because I just love hearing nest egg success stories and helping those starting out find their way to nest egg success!

Soar to nest egg success with an emergency fund

Soar to success with an emergency fundIf you’ve read any decent books or blogs about personal finance, budgeting, or anything money, I’m sure you’ve come across the term “emergency fund.” It sounds great – a bunch of money you can use on emergencies as needed. Who wouldn’t want that? But then it comes with all of these “rules” and “expectations” and it can be super confusing. And no one wants that. That’s why I’m breaking it all down for you, right here, right now.

What is an emergency fund, really?

An emergency fund is literally just money that you put aside to be used only for emergencies. Plain and simple. It can be a separate bank account (I recommend that) or money within your regular accounts that you know is separate.

Why bother with an emergency fund?

Nothing is more damaging to your quest to build a nest egg than accumulating debt. And a great way to accumulate debt is to not have money available for emergencies.

For example, a friend found herself having to go to the hospital in the 2 weeks that her husband was between jobs, and therefore without health insurance. She’s fine medically now, but now they have $6000 in medical bills! If they had some emergency money available, they could pay it off right away. But they don’t, so they aren’t just paying that $6000, but the interest on it, too!

I have seen people struggle to buy plane tickets for a loved one’s funeral. Or to fix a leaking roof. Or to not be able to buy food when they lose their job. No one wants to be in those positions.

I’ll give you a great example in a bit of someone who went from struggling without an emergency fund to…. well, read on and you’ll see!

Does it have to be called an emergency fund?

Some people don’t like that term. If for whatever reason you don’t like the name, change it! Call it your “just in case fund” or your “ice cream with sprinkles fund.” It really doesn’t matter, as long as you have some money set aside.

How much should be in it?

Ah, now we get into the “difficult” questions. I put “difficult” in quotes because I’ve seen a lot of people struggle with this, but when you break it down, it really isn’t difficult to figure out at all.

You might have read that you should have 6 months’ worth of expenses in your emergency fund. Or 1 year. Or $5000. But those are general numbers. Let’s talk about you.

First, how much do you spend each month? How much of that could you easily cut out if you had to? Maybe you can’t get rid of your rent, but you could go out to fewer concerts. Figure out your reduced but realistic budget. It should be something you can live on for up to a year.

Now, if you lost your job tomorrow, how long would it take you to find a new job? Be realistic. Then add 1 month to that, because it could take 2-4 weeks before you get your first paycheck. Then add a few more months because life never goes as we expect it to.

So now we know that you need at least enough money in your emergency fund to cover your reduced budget for the time you’ll be unemployed. Let’s say your reduced budget is $2000 per month and you think you could get a paycheck again in 5 months so you use a safety number of 7 months. That means you should have $14,000 (because 2000 x 7 = 14,000) saved up.

Make sure you consider your spouse or partner’s income. Can you live off of one income if you need to? That could affect how much you need to save in case of unemployment. Calculate how much you would need to save if the higher-earning person lost their job.

But wait, there’s more! Do you have any very large and unpredictable potential expenses? The most common ones are a house and children. If so, you need to put more money into your fund. What if you suddenly have to replace the roof of your house? Chances are that you won’t have to do this while you’re unemployed, but that’s a large expense and you need to make sure you have the money for it. You’ll see why in the example below.

Finally, do you have a high deductible health insurance plan? If so, make sure you have enough in your fund to cover that deductible, in addition to money to cover a period of unemployment. If your deductible is $10,000, one unexpected hospital stay could cost you a lot all at once. Be sure you have that money available! (If you have a high-deductible plan, you have access to an HSA, which is a great way to save up money for your deductible. If you don’t have access to an HSA, you’ll need to save this money with the rest of your emergency funds.)

So you’re going to take your reduced budget and your potential unemployment and multiply those numbers. You’re going to add in enough to cover your high deductible health insurance plan and then some. And then you’ll add in enough to cover one large house/child/other expense, because the odds are good that you won’t have more than one of these occur at once. Now you have your number – congratulations!

But this is too much, isn’t it?

The amount of money you need to have in your emergency fund is going to feel like a lot, especially if you’ve never done this before, but it’s necessary. When you have an expensive emergency (and over the years, we all have several of these) you’ll be glad you have it! For now, start small.

Right now, aim to put $1000 into your emergency fund as soon as you can. That’s enough to cover smaller emergencies. Once you have that, you can slowly build it up some more. Set reasonable goals for each additional $1000. How much time you need is specific to you, so do what feels right.

If you’re having trouble saving, start very small. Put $1 per week into your emergency fund this month. Next month, make it $2 per week. The month after that you can contribute $3 per week. Keep it up, and one year from now your fund will have $312! That’s a great start! Keep increasing the weekly savings until it feels right, and contribute until your emergency fund reaches your goal.

Yes, it’s tempting to put all of your savings into other things. Saving for retirement feels safe. Saving for a vacation feels fun. Saving for an emergency fund is boring. I won’t pretend that it’s not. But it’s necessary. When you hear Marisa’s story, you’ll understand why.

When to spend the emergency fund

There are so many times we need a little extra cash for something, and it’s tempting to borrow that money from the emergency fund. The problem is, even when we think it’s ok because we’ll replace that money with our next paycheck, something gets in the way and it doesn’t happen. Or it’s delayed. Or it starts a new habit that’s hard to break.

Just. Don’t. Do. It.

Your emergency fund is only for emergencies. Springsteen tickets aren’t an emergency. Fixing a flat tire is an emergency, especially if you have to use your car to get to work. Upgrading to the newest iphone is not an emergency. Buying a last-minute plane ticket to take care of a very sick loved one is an emergency. Resist all temptations and spend this money only on emergencies!

And then, as soon as you spend it, start putting money back into the account again to replace what you’ve spent.

Where to keep emergency money

It’s important that you have ready access to your money when you need it. Everyone’s situation is different, but chances are this is all you need to know:

Put your money into a checking or savings account to have easy access to it. Boom! Done.

But if you’d like to try something else, and only if you have a credit card that you pay off in full every month then you can try something else. You know that you’ll pay off any emergency charges to your credit card at the end of the month, so in an emergency you can put a charge on your credit card. That means it’s ok if you need a few days to access your money. And that means you can put your money into a breakable CD, or even invest it. Of course, if the market is down at the time that you need your money, you could end up losing a lot, so I wouldn’t recommend doing this. You could also mix it up, like putting part of your emergency fund into a savings account and part of it into a breakable CD.

Whatever you do, just make sure you can get to your money when you need it. Often in an emergency, time is a big factor.

And like I said above, you can put some of your emergency fund into a tax-deductible HSA if you have one. That can cover some medical expenses.

Marisa’s story

This all sounds nice in theory, but it’s not like it really matters in the real world. Or does it? FreedomWhen it comes to emergency funds, my friend and client, who wants to be called Marisa in this post, learned first-hand how valuable they can be.

When we started working together, Marisa had a lot of credit card debt. A large chunk of it came from an unexpected problem with her water heater. She didn’t have an emergency fund or much money in her checking account, so when the bill came, she put it on her credit card. She couldn’t pay it off right away, so those huge interest charges built up. She just couldn’t get ahead of it.

As we worked together and Marisa paid down her credit card debt, I encouraged her to start an emergency fund. She was hesitant to put money towards it, but finally agreed. We took part of her tax refund and seeded the first $1000 of the account. She slowly added to it while she paid off her debt.

She protected that money. When her dishwasher broke, she washed dishes by hand. When her stove started acting up, she used the burners that worked better. But when her fridge died, that was the final straw.

Knowing she had her emergency fund available, Marisa quickly shopped around and considered her options. She got a good deal by buying all 3 at once: the stove, the dishwasher, and the fridge. She paid $1500 in cash. She emailed me,

I paid in cash.  Crisp, green dollar bills.  That was my largest cash purchase ever.  It felt great.  🙂  The guy ringing me up kind of acted like he forgot what to do when he gets paid in cash.  We had a good laugh….  Saving does pay off.

She walked out of that store and didn’t owe a dime on any of her shiny new appliances! Wow!

Compare that to the year before, when she was still paying off the credit card bill that had built up from that darn water heater several years earlier. What a difference! She felt so free!

But Marisa wasn’t done. She had one more thing to do. As soon as she bought her new kitchen appliances, she began putting money back into her emergency fund to build it up again.

Now Marisa has a solid, healthy emergency fund so when something goes wrong, she doesn’t panic. She doesn’t go into debt. She takes out her debit card and makes the payment.

Do you want to be a water heater chick or a fridge chick?NestEggChick

Which situation would you rather be in? Would you want to put an emergency charge onto a credit card and spend years paying it off? Or would you rather put aside a little bit of money each month so that when you need it, it’s ready for you?

Most of us are in a water heater situation at some point. But wouldn’t it be better to be a fridge chick?

3 seconds

It’s SO important for everyone to understand money basics like emergency funds! It upsets me SO MUCH that this isn’t covered in school. It should be taught in an age appropriate way in every grade!

You might not have learned it back then, but you can learn it now. Take 3 seconds now to sign up for my mailing list by just entering your email address at the top of the screen. Let me show you how to build your nest egg so you have the money you need, when you need it. Then please take a moment to share this post, so your friends can learn how to cover their emergencies, too. I believe there are few better gifts we can give than teaching one another how to be happier and more in control of our own lives. Understanding money and building a nest egg are a big part of that!

Then, check out this 1-page printable cheat sheet of 5 quick and easy ways to save an extra $100 this week, and use that money to start and grow your emergency fund!

Investing made easy: The Simple Path to Wealth

Investing made easy- The Simple Path to WealthI always say that everyone makes financial mistakes and so you shouldn’t feel bad about yours. I’ve certainly made mine. My biggest mistakes all involved investing, and I’m certain that’s only because I hadn’t yet figured out JL Collins’ approach.

To be fair to myself, JL hadn’t started blogging at that point. I did some reading on my own, but I was just too scared to take the plunge. I was worried because I didn’t understand how investing worked. Those fears were understandable, but they cost me. A lot. Don’t let them cost you.

Anyone can do it

Gone are the days when you needed huge gobs of money in order to invest. You don’t need a broker or an advisor. You really don’t need much at all. With just a few dollars and access to the internet you can buy your first shares of stock. But how do you do it? Where do you begin? What do you buy?

My approach

A while back I started asking folks why I couldn’t just invest in the S&P 500 in order to get a broad range of stocks in my portfolio. The S&P 500 is, after all, a collection of the 500 largest companies in the stock market. No one could give me a good answer one way or the other. I figured that idea was too simple so I did other things instead. Big mistake. I should have gone with my instincts.

Then I came across JL’s blog and it Blew. My. Mind. Suddenly it all made sense! That’s why I recommend it to all my clients and link to it on the Nest Egg Recommendations page (which has affiliate links, as does this page, so you pay the same price you always would, but I might get a small commission if you purchase.) Suddenly I not only understood that my instincts were right, but why and how.

You see, JL doesn’t just offer good advice and insights. I mean, that’s useful too. Obviously. But it’s more than that. He breaks down these complicated, obscure, opaque terms and processes in a way that actually makes sense! Suddenly regular people like you and me can understand it!

Then he did something even more incredible. He started writing his Stock Series on the blog! I was totally hooked. I read every single post, and many of them twice or more. I couldn’t get enough.

So you can imagine how excited I was when he wrote a book. I couldn’t wait to get my hands on it.

My take on The Simple Path to Wealth

Lucky for me, I didn’t have to wait as long as I would have expected. JL actually offered me an advanced copy so I could review it! I was honored, not to mention intrigued. I read every word. I didn’t have to; most reviewers don’t. But I knew I’d want to read every word eventually anyway, and I don’t recommend anything that I haven’t thoroughly checked out. As it turns out, to my surprise, I actually learned some new things!

That means that even if you read the entire stock series, you could still learn some new things from this book, too!

So you’re probably wondering what I thought. Overall, I think The Simple Path to Wealth is a fantastic resource full of useful, well thought-out, simply broken down information. It has its faults, as all books do, but I definitely recommend it. I think it’s a great book for anyone to read so they can learn more about the often-intimidating world of investing in a way that isn’t intimidating at all.

Some details

I’ll admit there are some things I didn’t love about this book. Everyone has styles they SPW cover finalprefer, and that’s really subjective. Personally, I wasn’t crazy about the writing style. That’s me. Maybe it’s perfect for you. But while it wasn’t my preferred style, it wasn’t hard to read, and I think that’s the most important thing.

I also wasn’t completely thrilled with the organization. I felt the book got ahead of itself at times. I would have liked to see certain concepts defined and explained a bit earlier in the book.

But then, it has fantastic examples. Every concept is clearly explained. Do this, get that result. Do this other thing, get this other result. See how they compare. It makes dividends, index funds, and the rest so much easier to understand.

It’s also a quick read. Granted, I already knew a lot about investing. Still, I’m a very slow reader. And I had a bad habit of stopping throughout the book to pull up my own portfolio and compare it to what was being discussed. Or to click a link to a calculator and play around, only to realize that 20 minutes had passed and I was totally distracted. (But it was fun!) So for me to find it a quick and easy read is actually a really good sign. It’s not too long or too dense.

Sure, I would have liked to see a more thorough explanation of certain things (What’s the Dow? What’s the Nasdaq? What are some more examples of compound interest?) but you can get by without those. More importantly, JL explains what the market actually is and how it works. He covers investing in bull markets (when prices are going up) and bear markets (when prices are going down.)

Mostly, I love JL’s overall wisdom about the market. Like when he lists all of the market downturns in his 40 years of investing and points out, “The market always recovers. Always. And, if someday it really doesn’t, no investment will be safe and none of this financial stuff will matter anyway.” He has a point.

He thoroughly explains why his approach is the best. You still might not agree, but it’s pretty convincing. Of course, I was convinced before I started reading. But I bet you’ll see what I mean. It’s a pretty darn good argument.

Then he talks about different retirement accounts and their associated tax advantages. This is complicated stuff and once again, JL breaks it down in a way you can understand. Of course, these are specific to the U.S., but you can probably work out equivalents in your own country. He tells you how to prioritize the different kinds of accounts you might have access to and what to do with any excess money.

Finally, JL lays out his plan for his daughter, which is what started this all. He offered this plan on his blog so that his daughter would know what to do with her money, and readers loved it (including me!) The Stock Series followed from there. I sure wish I’d been lucky enough to get this kind of advice when I was his daughter’s age! But hey, better late than never. I still have time to benefit from it, and I’m guessing you do, too.

What about you?

So what will you do with the information you glean? Will you implement it right away? You should! Don’t delay! Delays cost money!

Read the book for yourself and make a few simple changes for your own benefit. Start small, and build from there.

And if you’re not read to read the book yet, please read the first few posts of the Stock Series on JL’s site. You won’t regret it.

Ask an investing question in the comments below, and I’ll do my best to answer it, or to tell you if The Simple Path to Wealth answers it!

How to start on your investing journey

If you’re like most people, you’re probably excited to try out this hip new investing craze, but you just don’t have the money to get started. Never fear! Check out this free 1-page cheat sheet on how to save $100 and do it this week because there’s no better time to start than right now! Before you know it, you’ll have built up the F-You Money that JL talks about on his site and in the book!


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