Money Musings: 💭 The beauty of being a beginner 🤪
I often find myself a beginner again. Either learning a new skill, doing something I’ve never done before or taking my business in a new direction.
Some examples...
When I decided to interview people for my book (I had never conducted interviews before)
When my social media manager finally 🤪 convinced me to make reels
It’s a funny feeling. As we get older, we can get used to being good at things - or at least them feeling familiar.
I notice the opposite with my kids. I easily navigate using scissors (or as easily as a leftie can!) but for my older one it's a completely new skill. I walk over a bump in the sidewalk no problem and my toddler falls flat on his face.
Being a beginner and fumbling through something for the first time is humbling and potentially extremely frustrating but it is also somehow magical and invigorating.
Why?
It tests us in new ways
Opens up creativity
Changes up the routine
Reminds us it’s okay to make mistakes
AND keeps us from taking ourselves too seriously 😆
I can be joyful! This of course applies to our money just like anything else we do.
If we’re budgeting or investing for the first time, we’ll get that beginner feeling (and frustration that comes with) but we’ll also experience all the positive side effects. Not to mention reap the financial rewards! 💰💰💰
When’s the last time you were a beginner? How did it feel?
MONEY MOVE OF THE WEEK
PAY YOURSELF FIRST.
How we traditionally save money doesn’t work. We earn money, pay everyone else first (our bills, 💡 live our life 🍽, even get gifts 📦) and then we hope there will be money left to save (a.k.a. pay ourselves). There’s typically not.
We earn more and think we’ll finally start saving. Still no. What gives?
To pay ourselves first, we want to treat saving like any other expense. Set up an automatic transfer to your online savings account where it’s out of sight, out of mind.
If you’re thinking, “Ashley, there’s no way I can save… I’m living paycheck to paycheck,” start with as little as $5 per paycheck. Check in and up the ante when you don’t miss it.
This same strategy applies to investing and giving.
How will you start to pay yourself first? Or if you already are, can you increase the amount?
YOU GOTTA SEE THIS
DEFINE: CRISIS FUND VS. RAINY DAY FUND VS. WALKAWAY FUND.
These three types of funds are all about having cash savings on hand but they have different definitions and apply to different situations. Here’s the rundown:
DEFINE: CRISIS FUND (a.k.a. minimum rainy-day).
Having some savings for emergencies is of top priority. In my conversation with Lauren Anastasio, a CFP and director of financial advice at Stash for Financial Adulting, she made the distinction between a crisis fund and a rainy-day fund. You want to have your crisis fund saved first and foremost, which might be a month’s worth of expenses or $1,000. I call this your “minimum rainy-day fund.”
DEFINE: RAINY-DAY FUND (a.k.a. fully-funded rainy day).
The rainy-day fund is the crisis fund, but bigger. The typical recommendation is to have three to six months of expenses saved for an emergency. The idea is that if you lose your job, you have some time to find a new one or if someone in your family gets sick, you can take time off to take care of them. Start by building your crisis fund and then the goal will be to have a fully funded rainy day fund.
DEFINE: WALKAWAY FUND
Dasha Kennedy urges all people, especially women, going into a relationship to have a walkaway fund saved in a bank account that only they have access to. For her, that means. “If I needed to pick up tomorrow and walk away, I have what I need for housing, basic necessities, and day-to-day expenses. That’s a fund I will always keep.” Dasha recommends having six months of expenses set aside for anything you’d spend if you were to walk away. This may or may not be separate from your rainy-day fund.