Get Good with Money - Book Summary

Master your finances: How to achieve financial wholeness and reclaim your future

Once thriving as a preschool teacher with a healthy savings account, Tiffany Aliche's life was turned upside down by the double punch of a recession and an unscrupulous financial scammer. Left unemployed and drowning in debt, Aliche hit rock bottom—forcing her to find a lifeline in the very abyss of her financial despair.

From the depths of financial ruin, Aliche crafted a revolutionary approach to money management. Unlike the elusive allure of get-rich-quick schemes or the complex world of investment strategizing, her method, which she calls "financial wholeness," is straightforward and achievable for anyone. It doesn’t just aim to patch up financial wounds temporarily; it seeks to heal them permanently.

This transformative method is built on ten core principles that have guided over a million women to collectively save and extinguish millions of dollars in debt. The beauty of these principles lies in their simplicity and their power to demystify the often-intimidating facade of personal finance.

By delving into these insights, you will unravel:

- The basic tenets of effective budgeting — understand where your money is going and how to harness it towards your goals.

- The wisdom of the squirrel—yes, squirrels! Learn why their instinctive habits of gathering and saving can be a metaphor for sound financial planning.

- Strategies on becoming "rich-ish" — it’s not about amassing wealth overnight but growing it responsibly over time.

Aliche's journey teaches us that rising from financial breakdown isn’t about quick fixes, but about rebuilding with the right tools and mindset. This resolute approach to money management not only restores control but empowers individuals to construct a stable and prosperous future.

Cultivate a positive financial mindset to unlock personal wealth and happiness

Imagine suddenly facing a financial emergency—how would you handle it? The recent global turbulence has shown that job security and stable income are more volatile than ever. Yet, achieving financial wholeness means transcending such insecurities, ensuring each aspect of your finances is resilient and robust, no matter the external challenges.

Financial wholeness is achievable for anyone, irrespective of your living situation or starting point—it's about having all areas of your finances working in harmony. Before embarking on the ten steps toward this goal, however, it's vital to address your current mindset surrounding money.

Central to thriving financially is fostering a healthy perspective on money. Begin by understanding the origins of your financial attitudes. The perceptions and habits surrounding money are often deeply ingrained, handed down through families and shaped by societal norms. To initiate change, start by scrutinizing these predefined patterns. Document your financial behaviors—identify their roots, acknowledge the emotions they stir, and recognize how they may be hindering your financial objectives.

Equally crucial is developing your financial voice. Visualize yourself as someone proficient with money management. This isn't about merely working harder but smarter—shift your paradigm to see your money working for you. When you adopt the mindset of being in command of your finances, your decision-making process fundamentally changes.

Additionally, integrating gratitude into your financial journey can significantly alter your outlook. More money alone won’t lead to happiness beyond a certain threshold. The discomfort you feel while adjusting your financial habits signifies growth—embrace it and be thankful for it. Each day, nurture this sense of gratitude by jotting down what you're thankful for.

Surrounding yourself with positive influences and accountability is another key step. Evaluate the influence those around you have on your financial attitudes. If they aren't supportive, consider seeking out and fostering relationships with those who will encourage and celebrate your financial strides.

Finally, empower yourself with the knowledge that you possess all the necessary tools for financial prosperity. Your current situation is merely a starting point on this journey. With the right mindset and strategies, you can transform your financial landscape and pave the way toward a prosperous and fulfilled life.

Building a robust budget to steer your financial voyage

Crafting and maintaining a budget is like setting up a navigational chart for a long journey — it's crucial for reaching your financial destinations, whether it’s soaking up sun on a tropical getaway or investing in educational pursuits. Learning this art is your stepping stone towards financial wholeness, and your budget is your empowerment tool that enthusiastically says "yes" to your aspirations.

Managing a budget is hardly a passive affair. It demands a clear understanding and meticulous tracking of your monthly income alongside a thorough breakdown of your fixed and variable expenses. The more detailed you can be during this process, the better.

The cornerstone of this approach is crafting a solid budget that underpins your financial future.

Start the process by cataloging every source of income in a 'money-in' list. Then, create a comprehensive 'money-out' list by examining a typical day's expenses. Consider every aspect, whether it’s a hefty data plan, spontaneous online purchases, or casual outings. Document each expense without criticism. Determine the sum of your monthly expenditures, and then from here, solve for your initial monthly savings by subtracting these expenses from your income.

Delving into your finances might stir up emotions, so consider setting a calming atmosphere with soothing music or a pleasant scent. Calculate your starting monthly savings, and be prepared for surprises; remember, this is a judgment-free zone!

Now, refine your budget by categorizing your expenses into three groups: B for bills, UB for utility bills, and C for cash expenses. Cash expenses cover daily variable costs like groceries or personal care. If you find that bills and utility expenses consume most of your income, your earnings might need boosting. On the other hand, if cash expenses are draining your wallet, you'll need to curb your spending.

Begin trimming expenses starting with the 'C' category as these are often easier to adjust. Curtail online shopping and cancel any unnecessary subscriptions. A subsequent step involves augmenting your income, which we'll explore further down the line.

Organize your funds into two checking accounts—one for cash expenses and the other for bills—as well as two savings accounts for emergency funds and long-term goals. Aim to automate as much of this as possible. Automatic transfers and bill payments not only save time but also reduce the chance for errors.

With these steps, you're crafting a budget that doesn’t just manage your money—it proactively says yes to enriching your life.

Embrace the squirrel's wisdom to secure your financial comfort

Imagine squirrels during acorn season: they are the epitome of saving mastery, meticulously collecting and storing acorns for future use. This foresight ensures they have ample resources when resources become scarce, embodying a natural wisdom in personal finance management. Humans, conversely, often indulge when the going is good, adopting a "live for the moment" attitude. However, to truly harness financial security, adopting a squirrel-like saving strategy is essential, marking the second pivotal step toward financial wholeness.

Transform your saving habits from merely saving to spend to saving to secure and grow wealth. Accumulating savings not only builds a robust financial buffer for tough times but also opens avenues for investment.

The guiding message here is: Adopting a squirrel-inspired saving approach can significantly enhance your peace of mind.

Recall the savings subaccounts you established during your budgeting process—it's time they were put to work. Your savings objectives fall into two categories: emergency funds and personal goals. Start by determining your emergency savings target, which should ideally cover at least three months' worth of living expenses. Following this, focus on your personal savings—how much can you consistently allocate to meet your longer-term aspirations, including investments?

To find funds for saving, establish your bare minimum monthly budget or 'noodle budget'. Identify areas in your spending that can be trimmed—perhaps cooking at home more often, opting for DIY grooming, or engaging in free entertainment. This strategy isn't intended to be permanent but to illuminate potential savings.

Furthermore, adopt mindful spending practices. Before any purchase, engage in a simple reflection: Do I need it? Love it? Like it? Want it? This exercise helps prioritize spending on essentials and true desires over mere wants.

Incorporate your savings goals into your budget as critical outlays, setting up automatic monthly contributions to each. Opt for a savings account that offers attractive interest rates, limits easy access to funds for impulsive spending, and ensures the safety of your deposits. Consider online savings accounts, which tend to yield higher returns than traditional banks and add a layer of deterrence against spontaneous purchases.

By embracing the strategic, forward-thinking habits of a squirrel, you not only establish a solid financial foundation but also cultivate a serene and secure financial future.

Clearing debt and enhancing your credit: keys to financial freedom

Debt is often viewed with dread, yet it's an integral part of financial health. Liberating yourself from debt and enhancing your credit score significantly broadens your financial opportunities, allowing for smarter and more profitable financial decisions. This dual focus is a crucial step toward achieving financial wholeness.

The journey begins with a mindset shift regarding how you perceive and discuss your debt. Instead of saying "I'm in debt," which frames it as a condition, rephrase it to "I have a debt to pay," seeing it as a temporary challenge. This linguistic shift helps prevent the feeling of being trapped by financial obligations.

The fundamental message here is: Achieving debt freedom and a high credit score equips you to concentrate on wealth accumulation.

Firstly, organize your debts by listing each one, noting down the owed amounts, interest rates, and payment deadlines. Next, decide on a strategy for repayment. Consider two popular methods: the snowball and the avalanche. The snowball method involves paying off debts from the smallest to the largest, providing motivational boosts with each cleared debt. The avalanche method, on the other hand, targets debts with the highest interest rates first, potentially saving more in the long run.

Choosing between these methods depends on your personal preference for quick wins versus long-term efficiency. Tiffany Aliche suggests a combination of both strategies to benefit from immediate gratification and strategic interest reduction.

Remember, being debt-free is just one aspect of your financial landscape and should not overshadow other financial goals.

Moving on to enhancing your credit score, this indicator plays a pivotal role in securing favorable terms for future credits. In the United States, aiming for a credit score of 740 or above is generally considered excellent.

If upon reviewing your credit report you find discrepancies or a lower-than-expected score, focus on addressing these issues without panic. Key factors that affect your score include your payment history and credit utilization. Ensure timely payments and keep your credit utilization below 30 percent of your limit. This shows you can handle credit responsibly without maximizing your limits, thus steadily building your creditworthiness.

By diligently clearing your debts and optimizing your credit score, you unlock the ability to focus more on generating wealth and securing a prosperous financial future.

Enhancing your earning potential: A journey of self-worth and side hustles

Now, let's focus on boosting your income streams. If you're feeling constrained by your minimal spending budget and your savings seem stagnant, it's time to channel your inner goose with the golden eggs — metaphorically speaking, of course! Increasing your income is a critical fifth step towards financial wholeness and involves both enhancing your current salary and potentially starting a side hustle.

First and foremost, consider asking for a raise.

The pivotal message here is: Boost your income by recognizing your self-worth, augmenting your skills, and embracing side gigs.

Prepare for your salary negotiation by creating a brag book — a detailed record of your accomplishments and the tangible benefits they've brought to your company. This will arm you with a strong case when discussing a raise. Also, continuously expanding your skillset can make you an indispensable asset to your team.

However, if your current job doesn't adequately value your contributions, it may be time to explore new job opportunities. Boost your negotiation skills and confidence by attending several interviews. Remember, even if you believe you only partially fit a job description, it's worth applying — it's often noted that men frequently apply for jobs when they meet only 50 percent of the qualifications. Why not give your potential a shot?

Should enhancing your primary income prove challenging, strategizing a side hustle is your next best step. Evaluate what skills or hobbies you have that could be monetized. Consult with friends or family about what you excel at to gain perspective on potentially marketable abilities. Set a concrete financial goal for your side hustle, such as earning an additional five hundred dollars per month, to make this venture more tangible and motivated.

Reflect on Tiffany Aliche’s journey: as a teacher, she supplemented her income through babysitting and tutoring, which brought in an additional six thousand dollars annually. This sideline eventually blossomed into her current career as "The Budgetnista," aiding others in financial management.

Up next, we'll delve into the sixth step toward financial wholeness: investing wisely. This not only prepares you for retirement but also significantly contributes to wealth accumulation, representing a profound form of self-care. Investing is how you ensure that your present efforts provide for your future needs.

Unlocking financial growth: Investing in your retirement and beyond

Consider money as a seed—when sown wisely into investment accounts, it sprouts and grows, powered by the magic of compound interest. This financial phenomenon occurs when your initial investments earn returns, and those returns start generating their own earnings. The result? Your wealth multiplies over time.

Embedded in this concept is the empowering message: Activate your money's potential by investing for both retirement and broader wealth.

Investing isn't just for the affluent; starting small and being consistent can also secure a robust financial future. Here’s how to make strategic moves to ensure your investments blossom:

Begin with the end in mind: your retirement. Planning for this phase isn't merely about securing funds for a distant future; it's about caring for your future self. To visualize the funds needed, use the formula—annual expenses multiplied by 25. This calculation bases on the 4 percent rule, suggesting that withdrawing only four percent annually from this nest egg ensures that you never exhaust your funds.

For practical steps, aim to allocate about 20 percent of your income each month towards retirement. This can be invested through employer-sponsored plans like a 401(k) or self-directed arrangements like a Roth IRA. Opt for a mix of stocks for growth potential and bonds for stability. Make these contributions automatic and regular—this not only simplifies the process but also helps in accumulating wealth steadily.

Beyond retirement, consider how you can grow additional wealth. Determine your disposable income after covering necessities, emergency savings, debt obligations, and retirement contributions. The remainder is your investment potential for wealth accumulation.

Reflect on whether you prefer being an actively involved investor or if a passive approach suits you better. If you enjoy research and closely monitoring markets, actively managing stocks could be appealing. However, if you prefer a more hands-off approach, look towards mutual funds or Exchange-Traded Funds (ETFs) as viable alternatives.

If starting your investment journey seems daunting, remember that even minimal amounts can pave the way for future financial stability. Tiffany Aliche, also known as The Budgetnista, began her investment journey with as little as five dollars per month, which gradually increased as she became more comfortable and financially capable.

The core idea is to foster a consistent habit of investing. It is crucial to remember that not investing at all is not a viable option for those looking to secure and expand their financial horizons.

Fortify your financial future with strategic insurance choices

Navigating the world of insurance often feels like walking a tightrope—unnecessary until a crisis hits, at which point it becomes indispensable. As the seventh step toward financial wholeness, mastering insurance is about viewing it not as a grudging expense but as a crucial safety net for unforeseen events.

First and foremost, secure health insurance. For those employed, companies typically offer several options. Self-employed individuals in the U.S. can find suitable plans through resources like healthcare.gov, ensuring they are covered without employer benefits.

Life insurance is another cornerstone of a solid insurance strategy. The general guideline is to skip life insurance if you're single without dependents or significant debt. However, if you have a family, dependents, or substantial debt, aim to insure for at least ten times your income. This ensures that in the event of your absence, your financial responsibilities are effectively managed and your loved ones are cared for.

Don't overlook disability insurance, which serves as a lifeline if you become unable to work due to illness or injury. Additionally, consider property and casualty insurance to protect against potential losses to your assets.

The central insight here is: Effective insurance management is integral to boosting your net worth.

Linking insurance with the other aspects we've explored—such as budgeting, saving, managing debt, enhancing credit, increasing income, and investing—brings us to the eighth step of financial wholeness: growing your net worth.

Tiffany Aliche uses the term "getting richish" to describe a healthy climb in net worth. Although net worth doesn't afford immediate privileges like a credit score, it stands as a vital measure of financial health—a barometer indicating whether you're accumulating wealth or not.

Calculate your net worth by subtracting liabilities (what you owe) from assets (valuable possessions you own). View the resulting figure without judgment, setting realistic goals, such as increasing your net worth by ten thousand dollars over two years. Plan monthly actions focused either on reducing liabilities or increasing assets, and regularly reassess your progress every six to twelve months.

Always make financial decisions with your net worth in perspective. Opt for transactions in cash when feasible—it not only provides leverage in negotiations but also psychologically discourages excessive spending. Additionally, save diligently for substantial purchases to avoid compromising your future finances with credit, which essentially borrows against your future wealth for immediate gratification.

Assemble your financial support team to achieve and safeguard your wealth

To truly achieve and maintain financial wholeness, assembling a robust team of financial experts and supportive accountability partners is essential. This network—your financial team—is the ninth step toward complete financial health and is crucial in helping you manage your financial affairs effectively, no matter the complexity.

Consider your current financial situation. If you're renting, have some savings, and perhaps a 401(k) set up through work, your financial team might be relatively simple. A financial educator could provide you with necessary guidance, and a partner or a close-knit peer group can serve as your accountability partners. Tiffany Aliche refers to such supporters as dream catchers, those who actively encourage and support your financial growth.

However, if your financial landscape is more intricate—perhaps involving multiple income streams, significant investments, or business ventures—you'll benefit from a more diversified team. This might include an accountant to manage your tax obligations, a financial planner to strategize your investment paths, an attorney to handle legal aspects, and an insurance broker to advise on the best policies for your needs.

The core insight here is: Engaging a team of financial professionals is pivotal not only for reaching financial wholeness but also for planning your legacy.

Beyond daily financial management, your money team plays a key role in crafting an effective estate plan, which is the tenth and final aspect of achieving financial wholeness. Dealing with estate planning can be daunting and emotionally taxing, but it's crucial for ensuring that your legacy is handled according to your wishes.

Start by identifying your beneficiaries—who will inherit your assets, and who will take on any debts? Additionally, consider guardianship for any dependents, including children under 18 and pets, ensuring they are cared for in your absence.

Next, draft a will. If possible, consult with an attorney to tailor a comprehensive will; alternatively, several online services offer basic will creation. Also crucial are advance directives: documents like a living will, which specifies your wishes should you become incapacitated, and a durable power of attorney, which appoints someone to make decisions on your behalf.

By systematically embedding these steps into your financial planning, supported by a dedicated team, you ensure that your wealth not only serves you during your lifetime but also benefits your loved ones and supports your ultimate wishes beyond your lifetime.

Unlocking financial mastery: A roadmap to wholeness

Achieving financial wholeness is a structured journey that can be navigated by adhering to ten fundamental steps, each designed to not only secure but also enhance your financial health. The initiation of this journey focuses on building a solid foundation through effective budgeting, strategic savings, comprehensive debt management, credit score improvement, and means to boost earnings. These initial steps lay the groundwork for financial stability, ensuring you are well-equipped to manage your money efficiently.

Progressing beyond the fundamentals, the subsequent steps shift focus towards growth and preservation of your wealth. This includes smart investment strategies, securing appropriate insurance, boosting your net worth, assembling a supportive financial team, and meticulously planning for legacy. Each of these stages serves as a cornerstone in advancing your financial well-being, providing tools and structures that adapt to your evolving financial goals and life changes.

As life progresses and your financial landscape shifts, these ten steps offer a reliable blueprint that you can return to, guiding you through various stages and decisions. This holistic approach ensures that your finances are not just a means to an end but a well-tuned engine driving you towards long-term security and prosperity.