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Paying off debt and saving money are the building blocks of a healthy financial life, but the statistics are dire: One-third of Americans haven’t saved a single penny for retirement, 38% of households have
20% to savings, which starts by building a three-month emergency fund and then allocating savings to a retirement fund thereafter. If you have credit card debt, Warren suggests allocating that final 20% to debt repayment before you start saving. Otherwise, you’ll just backslide as interest mounts on your existing debt. If you’re able to save more than 20%, adjust the ratios accordingly. If you can’t save 20% just yet, start with less (even 1% each month adds up!) and make a goal to increase your savings by 1% each month or quarter. THE ANTI-BUDGET STRATEGY If Warren’s budgeting strategy feels too complicated, try financial expert and “Afford Anything” podcast host Paula Pant’s anti-budget. Each time you get paid, skim 20% (or whatever your current savings goal is) off the top, put it in a savings or retirement account, and spend the rest however you’d like. Pant’s logic here is that if you tell yourself you’ll save “whatever’s left over at the end of the month,” you’re unlikely to save anything. Free yourself from the worry by saving first, then spend the rest guilt-free.
credit card debt, and 44% don’t have enough cash saved to cover a $400 emergency expense. If you see yourself in those numbers, there’s no better time than now to start working on
healthier financial habits because April is Financial Literacy Month.
Even with myriad apps available to help, budgeting can still feel intimidating. So, why not keep it simple with these two systems you can implement today?
THE 50-30-20 STRATEGY Before she was a U.S. senator, Elizabeth Warren was a tenured law professor at Harvard, specializing in bankruptcy. During that time, she published the widely acclaimed personal finance book, “All Your Worth: The Ultimate Lifetime Money Plan.” Some 16 years later, her advice still holds up. That’s because Warren’s approach to money is simple and flexible.
If 20% feels like too lofty a goal, start with whatever feels doable and work to increase that by 1% each month or quarter.
She suggests allocating 50% of your income to needs like housing, groceries, and utilities; 30% to wants like entertainment, vacations, and eating out; and
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If you’re a football fan, then you probably know the NFL is having its draft later this month. For my nonfootball fans, that means each team will take turns picking college players for their roster. With seven rounds of picks along with a lot of trading, bartering, etc., it’s a ton of drama over three days! The sooner a college player is picked, the more money they make, period. If you’re picked in the first round, your average compensation will be in the $19 million range for five years. If you’re picked in the last round, then you’re looking at around $600,000 IF you make the team. Teams are willing to pay the top draft picks more because of the contribution they feel those players will make RIGHT AWAY. It really comes down to the return. If a team pays out a $19 million salary, the return must be sizable ... right?
Those returns usually come in as long as the player has the “total package” of intangibles. These “intangibles” include how he behaves (no history of abuse, drugs, trouble with the law, etc.). Even if you’re the best player out there, you won’t be a first draft pick if you have “intangible” issues. So, why am I rambling on about NFL football? Well, the way I see it, apartment community ownership is likev having your very own first- round draft pick and ALSO scoring big time on the intangibles! This is especially true over five years. If you invest today, you WILL see results mirroring a first-round draft pick — yes, EVEN during and after the pandemic. Apartment communities will return sizable amounts of income, equity, and overall returns to their owners. In fact, I think the level of returns will be something we haven’t seen
in a long time. Other investments, though they may look “hot,” will not stay that way. (Remember GameStop?) I’m not just talking about the rate of return here, either. I’m also talking about those “intangibles,” like the protection of your money and wealth, lower risk, and security from theft and fraud. ALL of these items are part of the package! If you want to be on not just a WINNING team but a CHAMPIONSHIP INVESTMENT TEAM, make sure you have an apartment community or two in your list of draft pick(s)! –Darin Garman
2 DARINGARMAN.COM
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