The Personal Finance Podcast - 17 Tiny Habits That'll Make You RICH

Episode Date: April 16, 2025

In this episode of the Personal Finance Podcast,  we are going to talk about the  17 Tiny Habits that'll make you rich. How Andrew Can Help You:  Listen to The Business Show here. Don't let another year pass by without making significant strides toward your dreams. "Master Your Money Goals" is your pathway to a future where your aspirations are not just wishes but realities. Enroll now and make this year count! Join The Master Money Newsletter where you will become smarter with your money in 5 minutes or less per week Here! Learn to invest by joining  Index Fund Pro! This is Andrew’s course teaching you how to invest!  Watch The Master Money Youtube Channel! , Ask Andrew a question on Instagram or TikTok.  Learn how to get out of Debt by joining our Free Course  Leave Feedback or Episode Requests here.  Car buying Calculator here Thanks to Our Amazing Sponsors for supporting The Personal Finance Podcast. Shopify: Shopify makes it so easy to sell. Sign up for a one-dollar-per-month trial period at  shopify.com/pfp Chime: Start your credit journey with Chime. Sign-up takes only two minutes and doesn’t affect your credit score. Get started at chime.com/ Thanks to Fundrise for Sponsoring the show! Invest in real estate going to fundrise.com/pfp Thanks to Policy Genius for Sponsoring the show! Go to policygenius.com to get your free life insurance quote. Go to joindeleteme.com/pfp20 for 20% off! Indeed: Start hiring NOW with a SEVENTY-FIVE DOLLAR SPONSORED JOB CREDIT to upgrade your job post at Indeed.com/personalfinance Turn your business dream into reality! Apply now at www.oneday.org/pfp  Go to Acorns.com/pfp and start automating your investments and get a $5 bonus today! Delete Me: Use Promo Code PFP for 20% off! Shop Data Plans and Save Big at mintmobile.com/pfp   Relevant  Episodes:  19 Habits of People Who Always Have Money (Save Like The Rich) 11 Unpopular Opinions That Will Make You Very Rich How to Build an Amazing Network To Help You Get Rich With Jordan Harbinger (PFP Vault) How to Get Rich and Buy Your Freedom with Justin Williams Connect With Andrew on Social Media:  Instagram  TikTok Twitter  Master Money Website  Master Money Youtube Channel   Free Guides:   The Stairway to Wealth: The Order of Operations for your Money  How to Negotiate Your Salary  The 75 Day Money Challenge  Get out Of Debt Fast  Take the Money Personality Quiz Learn more about your ad choices. Visit megaphone.fm/adchoices

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Save the Everyday with Amazon on this episode of the personal finance podcast, 17 tiny habits that'll make you rich. What's up, everybody, and welcome to the personal finance podcast. I'm your host, Andrew founder of mastermoney.com. And today on the personal finance podcast, we're going to be going through 17 tiny habits that'll make you rich. If you guys have any questions, make sure you join that master money newsletter by going to mastermoney.

dot co slash newsletter and don't forget to follow us on Spotify, Apple Podcasts, YouTube, or whatever your favorite podcast player is. And if you want to help out the show, consider leaving a five star rating and review on Apple Podcasts, Spotify, or your favorite podcast player. Cannot thank you guys enough for following the show and leaving those five star ratings and reviews. Now, today, we are going to go through 17 tiny habits that will make you rich. See, everyone wants to build wealth and everybody wants to achieve financial independence, but a lot of times it is making sure you get some of the really big things right, but also looking at where your habits are and some of the things that you have in your life that could impact your money dramatically. And so today,

I'm going to give you a bunch of those little habits that I have done over the course of the last 16 or so years that have helped me tremendously when it comes to my finances. And these tiny habits have completely transformed my finances. If you do all of these things well, you're you will have a very well-oiled financial machine as time goes on. Now, from creating distance from negative people to making sure that you were tracking your net worth, to building a wins tracking system. These habits are truly the building blocks to success. So get ready, and let's break down some of these habits that could change your life forever.

All right, number one is a big one. And I think a lot of people don't realize that this is happening in their life, but it is very important to make sure that you monitor this and you are very aware that this is going to happen. Most people are going to have negative people in their lives. And what I want you to do is create distance from negative people. And I want you to stop caring about others' opinions. Now, this is way easier said than done. But what do I mean by this? How does this help your finances to remove negative people from your life? So identifying negative influences and limiting your time with them is going to help you change your mindset. If you are

someone who struggles with your financial mindset, you don't have a growth mindset. You don't think that there is abundance in this world and everything in life seems to be negative. Maybe your plate is really full and you are just struggling to find time. Or maybe you feel like the world is out to get you and you are never going to be able to build wealth. And what's happening is if there are negative people in your life that are reaffirming those specific thoughts, that is not a good situation for you to be in if you want to achieve financial freedom or if you want to pursue wealth. This is going to be a very important thing to think through. So I want you to surround yourself more so or make an attempt to surround yourself with positive and growth-minded individuals.

Because if you can surround yourself with more folks who think in the same direction that you want to go in, that is going to dramatically impact your actions in the future. There have been so many studies done that the people you surround yourself with is going to impact your actions. And if you don't change who is in your circle, it is going to dramatically impact your result at the end of the line. Now, there have been stories of people, obviously, who have had negative people in their life who can still achieve these goals. But you need to make sure you identify who is in your life and how much time you are spending with them. And are they negatively impacting your wealth going forward? Now, ask yourself this question.

Does this person's opinion truly matter for my long-term goals? Does this person actually help me achieve some of my long-term goals? If not, limit your time with them. You don't even have to completely cut them out of your life. But you need to limit your time that you spend with them. Now, sometimes there are situations where this specific individual may not be avoidable. maybe they are at work or maybe they are someone who is in your life like a family member that you love but they are just negative all the time if that's the scenario try to limit conversations with

them or just have a conversation with them going forward i don't want to have some of this negative talk happening uh and then that way you can actually have you know a very straightforward conversation now another way that you can do this if you can't find people who have this same or common goals as you uh what you could do is build your own environment and i love to do this i love building my own ecosystem This is what I did early on when I didn't know what to do. I didn't know who to talk to. I didn't know how to find people who were interested in the same things as me. So I built my own ecosystem.

The way that you do this is you can do this with podcasts just like this. Part of the goal of this podcast is to motivate you. That is one of the pillars of this podcast is to help motivate people to stay on their path towards financial independence. And so podcasts are a great way to surround herself with thoughts that are positive that are going to help you achieve your goals. Another one is books. Reading more often is going to. you help you tremendously with your mindset. And this is really just protecting your mindset. That's what you were trying to do, is protect your mindset and make sure that you are

continuously feeding your mindset with positive thoughts when it comes to building wealth. And this is learning. Learning is the real way to do that and the only way to do that. And then finding groups who may be interested in the same things. Is there an investing club in your area? Is there a real estate investing club in your area? Is there a small business owner club in your area. Just kind of meeting up with more people who have the same thoughts and mindset can be a really, really powerful thing that you can do. So number one is to create distance from negative people, stop caring about others' opinions, and making sure that you are protecting your mindset. That is one of the most powerful things. The people who are in your circle are going to impact your outcome.

Make sure you protect that circle. All right, number two is to make sure that you are setting specific goals and that you know your retirement number. So what I'm want you to do is I want you to think through what are my financial goals. And we have a very specific course that does this. It's called Master Your Money Goals that teaches you my specific system. If you're interested in that, you can go to Mastermoney.com slash courses. But in Master your Money goals, we teach you exactly how to set goals. And you have to make sure that you are doing that. It is a very small habit as time goes on, but you have to make sure that you are doing that so you know where you are going. Okay. So here's an example. My wife and I have a very big goal over the course of

the next decade that we want to achieve. And in order to achieve that goal, we need to make sure that we are making the right decisions that move towards that goal. So there's a lot of decisions that will come across my desk. I get a lot of emails from people proposing different things or different investment opportunities or different ways to make more money or different things I could be doing with my time. But if it does not help me take the next steps towards my next goal, I will say no. And so having financial goals helps you say no to a lot of different situations. Let's say, for example, your big goal this year is to max out your Roth IRA, okay? And you want to get $7,000 into that Roth IRA this year.

You love the benefits of the Roth IRA. You think it's an amazing option for you moving forward. And so to max out that Roth IRA, you need to come up with $7,000 over the course of the next 12 to 14 months. So to do that, you need to make sure that you are saving money every single month. You're automating it into that Roth IRA. But then someone comes to you and says, hey, I want to go on. a vacation this summer, we're going to go to Napa with all of our friends. Okay. We're going to go wine tasting. We're doing all these amazing things. It's going to be awesome.

And you go and look and you say, well, 10 days is going to be pretty expensive to go through this process. I'm going to have to miss out on work. I'm going to have to miss out on earnings. And really does this help me achieve my goal? Now, you have two questions here. A, you can go on the trip. You can go for a shorter period of time, save the rest of the money and kind of move on. Maybe you go for five days or six days, but 10 days may be too long. Secondarily, you can make the choice to go for 10 days, but you have to sacrifice something else in the future. Maybe you reduce the amount that you eat out over the course of the next couple of months. Or maybe you change some of your hobbies and you don't go to all those workout classes that you typically go to. Or maybe you just pull back on some

other categories that you spend on. But you're going to have to make some shifts in order to achieve your goal. So having a goal allows you to make conscious decisions. And this is a really important thing and a really important caveat to having goals. And so that is really, really important to know that. But secondarily, one big, big goal that you have to know is what your retirement number is. You need to know what that financial freedom number is. And I call it a retirement number. Really, a retirement number, calling it a retirement number is not the best word. It's really your financial freedom number because being retired is not an age. It is a number. It is a number that you have invested that will help you know when you can retire. So what is?

is that number? Well, there's something out there called the 4% rule. And in order to figure out what this is, we need to use the 25x rule to calculate our financial freedom number. So how do we do this? Let's say, for example, you spend $80,000 per year. Well, if you spend $80,000 per year, you multiply that by $25. That means that you have $2 million there that you need to have invested in order to spend $80,000 a year. Because 4% of $2 million is $80,000 per year. So that's how we get to that number. And so really you need to make sure that you understand that number. But we also want to create shorter term goals. We got these big, hairy, audacious goals that we want to achieve. But we also want to have these short term goals. Maybe you want to start

negotiating some of your bills and getting a few dollars back so that you can allocate it towards something else. Or maybe you just want to cut back on some of these subscriptions or make sure that you were tracking your spending every single day. All of these are fantastic goals. And so for these short term goals, we want to make sure that we are breaking our goals down from yearly, down to quarterly, down to monthly, down to weekly, down to daily. Because daily is going to allow us take those daily actions towards our weekly goals. Our weekly goals are going to allow us to take those actions towards our monthly goals. Our monthly goals are going to allow us to take those actions towards our quarterly and towards our yearly. This is how you achieve big goals is to break

them down into micro chunks. And so we have to have those goals set up in place. And then we want to every single week be reviewing our goals, adjusting our goals, and making sure that we are on track. So setting very specific goals and knowing our retirement number is number two. This absolutely changed my life once I did this because it changes the way you make decisions. All right. Number three is to create a wins tracking system. Now right now we are working on a personal finance academy. It's actually going to be called Master Money Academy. And in Master Money Academy, one big things we are going to have is everybody in this community is going to be sharing wins with each other. So every time someone has a big win, we're going to be celebrating that win together.

And I want you to do that for every single milestone that you have on your financial journey. Now, you may not have people that you are sharing this financial journey with, which is A-OK. That is completely fine. Some people want to be private with their finances, which I recommend you having like an accountability partner. But if you don't, that is A-OK. This community is actually there to fill in that spot because it's people that are not in your day-to-day life.

And so you can hang out with some of these strangers on the internet and be able to have accountability partners. That's going to be part of this. As time goes on, I'll give you more information. on that. But we also want to kind of talk through and think through recording some of these small daily wins. Let's say, for example, you did the five-minute drill over the course of the last month, and you did it for 30 days in a row. And you're like, man, I just did the five-minute drill for 30 days in a row. I feel so much more clear about where my dollars are going. I am so excited about how

I'm spending my money. And this is absolutely amazing. Well, if that is the case, you want to share that win with somebody so that you guys can start to encourage each other together. And so that is a really, really important thing that I think we need to create a wins tracking system. So when you have big wins, you know, write this down. Maybe it's in a journal or maybe you just have a Google Doc of the big wins that you achieved over the course of the last couple of months. And then every quarter, I want you to review that. And then every year at the end of the year, you get together with either your friends or maybe it's your spouse and you go look at the sheet and you say to each other, look at all the things that we did this year. Look at these amazing achievements that we made.

Last year we didn't do any of this stuff. And look at how cool and how much progress we have made over the course of the last year. And you can categorize these wins by financial. I do it by personal and professional growth as well. And you have these wins in place that help you stay motivated. This is why we set goals and we achieve goals. We celebrate those milestones. I think it is so incredibly important to recognize the things that you achieve because what does this do? A, this makes you grateful. But B, this motivates you to work harder as time goes on. And I think that's really, really important. And it helps reinforce positive progress. as well. So create a wins tracking system. You can even use bullet points if you want to,

but create this wins tracking system. And this is going to be a great way to celebrate milestones, either with yourself or together with other people. All right, number four, micro habit number four, is to automate your money. Now, this is one of the most powerful ones. And I would argue this is the most powerful thing that you can do is automating your savings and investment. Now, the way that you do this is you can set automatic transfers to savings and investment accounts. I like to do it A, and my high-yield savings account, I like to do it with all my investment accounts and my retirement accounts, my brokerage accounts, all those different things. And I also like to make sure that my money is

going exactly where I wanted to go. And automation allows you to do this. But thirdly, I also automate all my bill payments. So every bill payment that I have that I can automate, I will automatically make sure that that gets paid. So I do not have to think about it again. Now, if you do not automate your bill payments and you're manually still paying bills, it is 2025 at the time I'm recording this. You need to make sure that. You need to make sure that. you are automating those bills, it is really important to reduce just the mental strain that you have around finances. Now, one thing I want you to do is think through, hey, once I start my automation system, I don't have to rely on my willpower anymore. Your willpower is the enemy when

it comes to finances. There are going to be days that you don't want to do it. There's going to be days that you just don't want to transfer money over. You'd rather blow that money on some frivolous purchase because you had a bad day. And that's okay to feel. that way, but automation, make sure that that doesn't happen because it automatically transfers money out of your account into the accounts and the places that you wanted to go towards because you set a plan in place, because you had goals in place, and this is going to be the way that you grow your wealth over time is automation. So you've got to make sure that you were automatically saving and investing. If you don't know how to do that, we have a ton of stuff coming out that's

going to teach you exactly how to do that. But the last thing it does is it minimizes decision fatigue because if automation is your default, you don't have to make all these different micro decisions all the time. You don't have this decision fatigue coming into play. Instead, you know where your money's going. You know what you're investing it in. You know what you are going to do with these dollars when they are automated. Now, the last thing I would say is the other piece that you can automate is your spending plan or your budget.

You can use tools like Wynab or Monarch Money. There's a bunch of great ones out there. I think Ramsey has every dollar. I think there's one called ethos. There's a ton of different tools out there that you can use. And making sure that you automate that spending plan, really important. Even if it costs a little bit up front, it is worth every penny because it saves you so much more by making you aware. You save way more money than the cost of these apps because

you are aware. And I cannot believe sometimes the pushback I get for like $10 a month for some of these apps. It is unbelievable. Right now I have no affiliation with any of them. I've had Marlark money as a sponsor in the past. I've used Winark the past as well. Right now I personally use Bonark money. But there's a bunch of them out there. They're all great. And it is one of those things that you need to make sure that you are utilizing. Right now I have zero affiliation with any of them, but I think it is worth every single penny to make sure you at least use one of them. So making sure you automate your money is really, really important. If you don't already do it, I would highly recommend giving it a shot. Number five is to audit your 55, 25, 20, 20, at least

once a year. Now, this habit is going to be something that I really like to do to make sure that I am on track with the way that I'm spending my dollars. And so the way that I do this is you can break your income down into 55% of your baseline expenses, what you really should be spending on baseline expenses. So this is things like necessities. And really this is a range. So it's really 50 to 60% on necessities. Now you can spend less than that, but going above that is just going to be way too high. And that's where I really think that most people need to make sure that they audit their necessities. Because if it is way too high, you either have an income problem or you have a spending problem. And so one of those two things need to be adjusted based on your baseline or your necessities.

Now, what falls under necessities? This is going to be your home payment, your rent or your mortgage. This is going to be your transportation costs. So that is going to be your car payment. That's going to be your car insurance. That's going to be your gas, those three things, and repairs. This is also going to be things like your health care. This is also going to be your debt payments.

And it is going to be your groceries. Those are going to be the necessities that come into play for most people. Now, for folks who have young kids, daycare is going to be one of those line items as well. But necessities are the things you have. absolutely can't live without, obviously like toiletries, those types of things. And so this is something that you definitely want to make sure that you identify first as necessities. It needs to be between 50 to 60% of your income or less. It could be less than 50% also, but it needs to be 50% to 60% of your income. Now, things you love is the next item. So that's going to be 20% to 30%

is what that range is, but we just call it at 25 because we call the 55, 25, 20, 20. And so 25% is things that you love. So maybe it is hobbies or things. I want you to use your dollars on things that you value. And so part of managing your money correctly is so that you can allocate more dollars towards the things that you love. And the reason why we do this is because things like experiences with your family are going to be the things that you cherish most in life. And the last thing you want to be doing is just hoarding cash and not being able to enjoy your dollars. There are way too many people in the fire movement who hoarded cash early on and they are not enjoying their dollars as much as they want to. And so that is something I want you to avoid if at all possible. Now, I have become way more

flexible when it comes to the way that I spend my dollars over the course of the last decade, where very early on, I was extremely frugal. And then later on down the line, I started to spend more. And I want you to kind of think through this, maybe you spend too much right now. And so you need to get more frugal. It might be the opposite ends of the spectrum. But everybody has their own journey on that. And I want you to think through that. But I want you to spend a certain amount on things that you love. This could be less than this range. This could be more of this range, but you've got to give somewhere else. Now here's the non-negotiable one. Okay. The last one is 20% towards your future south.

Now, this is 20 to 30% towards your future south because really, I want you to be saving at a minimum 25%. That's what real wealth builders do is they save at least 25% of their income. The minimum is 20% though for the starting point. So if you're starting off, you can save 25% of your income. And so that's why we have this range of 20 to 30%. When you think about this, I want you to really make sure that these dollars are either going to two places.

Investments, meaning retirement accounts or investments, or two, they're going to towards your emergency funds. And so your emergency fund is the other side of this. If you're still building out the 136, then you got to make sure that that goes towards your emergency fund as well. But these dollars are going towards your future self. And then what I want you to do is I want you to think about these spending categories. And you say to yourself, well, how do I track these? Well, those tools we just talked about will track them. But if you don't do that, you could take your last three months of bank statements and go through there and categorize all your spending.

You can do this in a spreadsheet. You can do wherever else you want to do. And you want to identify the categories where you are consistently overspending. I want you to figure out where you are overspending and trying to make some of those adjustments. And then I want you to compare your. ideal allocation to your actual spending. So before you even do this exercise, one thing you can do is say, hey, how much do I think I'm spending on my 55, 25, 20? 20. And then you look at it and you say to yourself, well, I think I'm spending 50% on necessities. I think I'm spending 25% on my investments.

And I think I'm spending 25% on the things that I love. Well, if that's the case, let's take a look at it. And when you take a look at it, if it is way out of whack, then we need to start making some adjustments and auditing this. Now, you're going to get better at this. as time goes on, the first time you're going to be way off. And that's okay. But you're going to adjust and you're going to reallocate and align based on your financial goals. And so I want you to do this at a minimum once a year to make sure that you're really allocating. But a lot of you who are going to follow some of the plans that we are doing, we're going to be doing this more frequently to make sure that you are on track with your financial goals. And so making sure

you're auditing those finances is a really important micro habit that I love doing. All right. Number six. So lately, I've been noticing how fast things are changing. at home. The kids are growing like crazy. Clothes don't fit anymore and routines are changing. And it just hits you. Life is expanding. And when your life grows, your responsibility grows with it. That's something I've been thinking about more this spring, making sure the safety net we have in place actually matches the life that we're building. And that's where PolicyGenius comes in. PolicyGenius is an insurance company. They're an online marketplace that helps you compare life insurance quotes from some of the top insurers in America, all in one place for free.

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What I realize pretty quickly is most people absolutely hate the B-word. They absolutely don't even want to hear that B-word. If I put the B-word in a title of a podcast episode, that will be my least downloaded podcast episode of the entire year. Now, what's the B word? It's a cuss word to a lot of you. It's budget. And so most people don't like to budget.

I don't like to budget. And so it is something where you are not alone when it comes to that. Some people love it. I know there's people out there who love it and there's listeners who are probably saying to me right now, oh, you don't like to budget. No, I don't like the budget. But it's okay because it's fun kind of when you're in there. But then, you know, it's whatever.

So anyways, for me specifically, what I do is the five minute drill. And so the five minute drill is every day. And it's usually around noon every single day. Sometimes I'll do it early in the morning. But right now it seems to be right around noon, right before I am going to eat lunch. Like maybe I'm heating it up or whatever else.

I will go and I will do the five minute drill. And I will go and log into my budgeting app. And I will categorize my expenses. And also I'll just kind of take a look at my big metrics. So the big metrics I look at are things like net worth. And I look at how much I am saving. And I look at how much am investing and all these different things. But really what it's for is to categorize your expenses that you spent money on yesterday.

And so when you do the five-minute drill, this allows you to five minutes or less every single day. You have a perfectly categorized budget and you don't have to worry anymore. Five minutes a day. That's all it takes. If you don't want to do it on the weekends, you know, maybe make a 10-minute drill on Monday and every other day is five minutes. That's all you got to do. And really every other day, I say five minutes, it's usually way less than five minutes. For me, it takes about two minutes because how many things do you spend money on per day? Is it two, three, four, or five, if you're a family, if you are just single, there's going to be days you don't spend any money. And so this is one of those things that you just want to make sure that you can do this

and just stay consistent day in and day out. If you know that you're going to be doing it every single day, you just log into your app. And this is why I love using those apps because you log in your app, boom, boom, boom, categorize really quickly and you're done. So it takes you literally how fast you can move your fingers is how long it's going to take you. That's about it. And so we call it five minute drill. It should not take you longer than five minutes. And at the end of the month, everything is done. You're not spending two hours going through your budget, making sure everything is lined up perfectly. Instead, you just do the old-fashioned five-minute drill. So this is one of those micro habits that I absolutely love and is one of my favorites.

All right, number seven is to learn about money weekly. So this is something I think really, really helped me early on in my financial journey and I have stuck to it as time has gone on. So what do I mean by that? Really early on when I decided I'm going to turn my money around, I made the commitment to start reading one book every single week. And so when I did that, I dedicated about one hour per day to learning about finances. But this actually turned into a lot more than that. And I'll explain why in a second. But I wanted to at least dedicate one hour per day to learn about finances.

Now, you don't have to spend an hour a day. You can read a couple of pages a day. But you just want to learn about money every single week. If I were you, I would dedicate one hour every single week to learning about finances. And that may just be plenty for you. Maybe it's 10 minutes a day. maybe it's five minutes a day. You do your five minutes real. You do 10 minutes of reading and boom, boom, Bada boom, you're done. Okay, that's what you could be doing. How do you do this? Well,

you can read books. You can listen to podcasts just like this. If you listen to one of these podcasts every single week, you spent an hour dedicated to learning about finance. And that is the big thing that you can do in order to learn more. You can watch educational videos. We have this podcast also on video. If you like video, you can search my name. And so between all those things, I'm making way too many sound effects today. Sorry about that. So between all of these different things, this is how I really, really accelerated my path to learning. Now, what I did a lot is when I was in the corporate world, I would sit in my office or at the beginning I was in a cubicle and I would sit there and listen to podcasts. There was a bunch of early podcasts that I would listen to. One was called

the Dole Roller Podcast, which is now Rob Burger Show. Great show. First, just had a dedicated podcast. Now he has a YouTube channel. Really, really good stuff. I would listen to shows like Radical Personal Finance, Joshua Sheets, another great show. And I would listen to all different kinds. my friend Joe Saul, see hi, I would listen to stacking Benjamin's. There's a bunch of shows that I would love to listen to back in the day. And so I was spending time learning more about finances, which was very important to me. And so when we started that journey, that was really helping me was I was reading a little bit every single day. And then I was listening to podcasts. And that made a tremendous difference in my specific life. Now, if there are really big ticket items that you

want to learn and writing down notes and having summary keys can be really, really helpful for you. and then continuously just expanding your financial knowledge is really, really important. Now, what do I mean by that? What I mean by that is kind of go deeper into some of this stuff as you start to get the baseline stuff. So maybe you understand, you know, emergency funds and you understand budgets and how to do certain things? Well, let's go deeper.

Well, how do I minimize my taxes? Okay, you got all these different things mastered. Okay, now how do I figure out my estate plan and how do I put that together and kind of just think through some of those things if you're interested in the topic? But really all you need is the basics first. And if you're trying to turn your finances around, you need the basics. and you don't have to go further than that if you don't want to. But if you love this stuff, like if you're a nerd like me about this stuff,

then you can definitely go much deeper. Number eight is tracking your net worth. So tracking your net worth is a really, really important thing. I think a lot of people probably need to consider doing it at least quarterly or yearly. You can do it monthly too if you're really a nerd about it. One of the best things to do overall with your net worth is just to utilize it as a scorecard. So you break down your assets versus your liabilities and you can see your progress clearly. So a lot of those budget apps that I talk about, they all do that for you.

But if you don't want to do that, there's another tool called Empower that is completely free that will also do it for you. Or you can use a spreadsheet. You can get a network spreadsheet going. Maybe we need to create a network spreadsheet for you guys. That's free so you guys can have one available. We'll look at doing that for those who don't want to kind of plug their bank accounts into some of those apps. But with your net worth, this is a really important scorecard to have. No, I like to track it because it will tell me kind of where I am.

Now, if you do it on a monthly basis, it's going to fluctuate a lot. Why? because the market shifts all the time. And so that's why I don't love looking at it on a monthly basis all the time, but I will look at it if it is connected to something like one of these apps. And so you got to make sure that you have those in place first before you go through that process. But also you want to make sure that you were simplifying some of the tracking with some of these other notes. Now, this is going to be a big part of your goals, is when you think about your net worth,

you want to kind of set up some of these net worth goals in place. So when you're thinking about your goals, set goals to increase your net worth incrementally. So my first one, for example, was to get to my first $10,000. in net worth. You may have a negative net worth right now. If you're in debt, your net worth will be negative. But if you are someone who is goal oriented, you can set these up in a way where, hey, maybe it's first $10,000, then it's getting to $25,000, then it's getting to $50,000. You're starting to ladder up to your first $100K. Now, you know, your first $100K is the hardest place to get to with your finances. But after that, everything starts to get slowly much easier where you will see your

net worth. And so maybe your first big, big goal is to get your first $100k net worth and then go on from there. This is a great way to start setting goals and big goals for your financial life as well. Number nine is we want to create a once list. So this is a micro habit that can help a lot of people who find themselves just spending money frivolously on Amazon or Target or Walmart or wherever else and you know who you are. If you were the person who just puts things in your shopping cart and goes out and buys them, you may want to create a once list. Now this is a list that you could put together in order of operation. Now, what do I mean by that? This means that. This means that, you put your most wanted thing at the top of the list and your least wanted thing at the bottom

the list. So you create a list of things that you want in life. Maybe, I don't care what it is. You could be a list of things like you want a brand new hobby or maybe you want to start taking a workout class or maybe you want to buy new shoes or maybe you want to buy a new handbag or maybe you want to buy a new shirt or maybe you want to buy new golf clubs or maybe want to buy a new fishing pole. I don't care what it is. But creating this wants list and putting it in order of operations from best to worst is going to be really, really important. Now, why is this really important? Because this gets a hit list going for you.

You know how expensive this stuff is going to be. And so if you put it in order, you can start to look at these things and say, hey, I have some extra cash on hand. I have my fund money, my 25% that we just talked about. I have this extra cash on hand. And now I have enough saved up to buy the first one. Okay? Then we go down the list.

Now I have enough money to buy the second one and the third one. Now, you could do this in the notes app on your phone. You could do this on a spreadsheet. It doesn't really matter where you do it. But this just helps you get organized on the things that you want to buy, specifically the bigger ticket items that you want to buy. You probably know someone in your life who doesn't spend any money whatsoever. And then all of a sudden they get this big, giant purchase that they make. Well, the reason why they do that is typically probably in their head, they have a wants list. And they're thinking through, okay, I've got to save for a few months to buy this thing or I got to save for a year before I can buy this thing. And so that is a really great way to make sure your dollars are going towards the things that you value. That's exactly what we want you to do. is ensure that those dollars are going towards things that you value. A once list helps you to do that. All right, number 10, this microhabit is a really big one.

I think most people will benefit from this if they actually do this. And here's where this stemmed from. Very early on, when I used to cut back on some of my expenses, I would realize pretty quickly that the money that I cut back would just go back into my checking account, it would get commingled in my checking account and just disappear. And I said to myself, well, why do I continuously doing this? So instead, I created what I call the CIA method. What does CIA stand for?

This stands for cut, identify, and then automate. Now, let's go through this. Cut is to eliminate any unnecessary expenses or subscription. So if there are expenses that you have within your budget that you absolutely do not care about, it does not bring you value. A big one for a lot of people is streaming services. Maybe you have HBO Max, you have Apple TV, you have Paramount, you have Netflix, you have Amazon on Prime. You have all of them. You got them all. And you do not watch all of them every single month.

Maybe you're watching one show on one and then the next month you're watching another show in a different one. But you do not use all of them every single month. Well, if you have all of those subscriptions, you're paying $70 plus for all of them. So instead, what C is for is to start cutting back on some of those subscriptions. But I comes into play, and this is very important, because I is identified. So once you cut back on something, you cut out a subscription or maybe you just cut out an expense from your life, once you cut it, you need to identify where this money is going to go, okay? Because if you put it back into your checking account, it's just going to get lost, it's going to go towards random things that you do not care about. So if you identify where this money

is going to go, then you can choose how you want to allocate this. For me, specifically, I always like to put it towards something like an emergency fund or something towards investments. That means my money is going to grow or it's going to go towards future me to achieve financial freedom. Okay? So when you identify where it wants to go, then you, A, automate it. C-I-A. So automation means that you take that money and you start automating exactly where you wanted to go. So let's say, for example, that you're saving for a new house. And so you're trying to cut back so you can start saving more money for that new house. Well, if you have a budget line item within your high-yield savings account, for example, then what you can do is you can cut back subscriptions,

you identify that you want it to go to your down payment, and then you automate that money into that savings bucket that is your high yield savings count. Now, this is a very important process because once you automate it, you don't have to think about it ever again. It's just going in there automatically every single month. Maybe you already have an automation set up and you just increase it by 50 or 70 or $100, whatever the number is so that you make sure that money goes where you want it to go. So utilizing the CIA method, make sure that when you cut back money,

you're actually cutting it back and actually saving it. Most people cut back and don't save. They just cut back and spend somewhere else. So instead, you're cutting back and you're saving those dollars towards something that you value. Number 11 is to invest in yourself. So learning how to invest in yourself is one of the most important things that you can do with. If you are in your 20s or your 30s and you're listening to this podcast right now and you're saying, I have never, ever gotten to the place that I thought I would be at this point in time.

You need to invest more in yourself. This is one of the most important investments that are out there. And so investing in something that is going to help you make more money is what this is all out. So what I want you to do is I want you to allocate time. I want you to allocate money. And I want you to allocate brainpower towards a specific skill and knowledge that is going to help you improve your earning potential. What do I mean by that? Okay. Let's say, for example, you are a nurse. And if you're a nurse, there's only a couple of different ways that you can make more money. You can start to create, I guess, online nursing content. You could start to go out there

with a side hustle with something related to nursing. Maybe you start a Scrubs brand that competes with figs or whatever else, or you could go out there and you could just go get an additional certification that allows you to make more money day one. Well, if that is you, investing in yourself means investing more dollars into that certification so that you can make more money forever. It is one of the most worthwhile investments that you will ever make. It is the highest rate of return that you will get if you are a nurse because you're going to make more money. Let's say, for example, you want to become a nurse practitioner. Well, if you become a nurse practitioner, you're going to make what, $10, $20, $30,000 more every single year for. For you.

forever. That is an amazing investment to go out and get your degree to make sure that you can continue that education and earn more money. So investing in yourself is a really, really powerful thing. Or let's say, for example, you are in coding. And you're someone who has been coding for a really long time. You've been vibe coding over the course the last couple of months. And then all of a sudden, what you say to yourself is, well, AI is coming up. I got to figure out how to take advantage of this. So you start taking courses and classes on how to maximize your potential within AI. And so you go through this. Now you have this skill that you can utilize forever to earn more money and make yourself more marketable. Or let's say you're a project manager and you know, hey, I got to make

more money as a project manager. And so you go out and get your PMP. Or let's say you're in sales and you start investing more dollars into sales skills or you're in finance and you start to take all these different Excel classes that are going to help you create additional reports. All of these things are investing in yourself and they're going to help you earn more money forever. So we talk about investing in the S&P 500. Alex Hormosey has one of my favorite quotes on this. He calls it investing in the S&P and me. And so this is one of those things where you're investing more dollars in yourself. It's going to help you earn more forever.

And so that is a really, really powerful way to think about this. Number 12 is to use the 1% rule. And so what I want you to do is with the 1% rule, this is going to be a way for you to increase your savings and investment rate and or increase the amount that you're putting towards your emergency fund or decrease how much you are spending every single month. How does this work? The way that this works is it's going to allow you to make small, consistent changes. So let's say, for example, that you are overspending in the grocery category, okay? Let's say you're spending $1,000 every single

month. Well, in month two, what I want you to do is if you want to reduce this down to $700 a month, then I want you to reduce it by 1%. That means you're reducing it down 1% every single month over the course the next 12 months. Where you're going to spend 12% less on groceries if you reduce it by 1% every single month by the end of the year. In two years, it's going to be 24% reduction and it's going to help you gradually reduce that spending. Or let's say, for example, you want to invest more into your Roth IRA. And you invest 10% of your income into your Roth IRA. Well, then what I want you to do is increase that investment to 20%. And the way to do that is to 1% every single month, increase your contribution to that Roth IRA.

And over the course of the next 12 months, you will be investing 22% of your money into that Rolfi IRA. So these small consistent changes removes the friction, and it also just removes the fact that it really is painful at first to make these big shifts in your money. And so small changes can help you over time reduce that impact. Number 13, and this is for those folks who again are really prone to making purchase decisions really, really quickly. And this is to use weight periods before you make a purchase. So you need to establish some windows before you make specific. You need to establish some windows before you make specifically big purchases, but you got to figure out kind of where you want these to land on how you spend your money, specifically on things that are not essential. So let's say,

for example, that you spend a lot of money. You make a ton of $100 purchases, just random $100 purchases on different things. Like, you know, last week you bought sunglasses, the week before that, you went out and you bought something else and you go down the line and you just go look at your purchase and you're like, I'm just spending way too much money all the time. What you want to do is create cooling off periods for yourself? What does this mean? When you want to buy something, If it is a certain dollar amount, you have a specific cooling off period. So let's say, for example, everything above $100, you wait at least three days before you buy that item. What this does is it ensures A, that you actually want that item, but B, it gives you a cooling off period to take the excitement out of the equation, take the marketing out of the equation, and all of a sudden, all the dust settles and you realize, oh, I actually don't really want this thing.

I was just going to buy it really quickly because they had some good marketing. Or, ooh, I really don't want this thing. A lot of things have changed over the course the last couple of days. So here's the way to think about this, is everything that is $100 or less, you wait 24 hours. Everything above $100 to $200. You wait three days. $200 to $500, you wait seven days. And anything above $500, then you're going to wait at least 30 days before you make that purchase.

If you go through this process, this allows you to cool off and it's going to allow you to save so much more money. And you're not going to have to worry about just making these frivolous purchases and said he's actually thought through this process to make sure you actually wanted that item. Number 14 is learning how to ask the right questions. And so when you are thinking about your finances, what I want you to do is regularly assess your actions and making sure that it aligns with your financial goals. So when you are actually making decisions, you want to ask yourself, does this help me achieve my goal? If it doesn't, then that is something you do not do.

You have to learn to say no more frequently. And if something doesn't align with your goals, then you do not need to be doing it. or a second thing you need to be doing, though, is making sure you're asking the right questions to experts. So if there are people in your life who can help you tremendously with your finances, a great example for me is someone like a CPA. I can ask my CPA a number of different questions, and I have to ask them the right questions to make sure I am getting the optimized

result that I want. And so in order to do this, I need to make sure that I come with a list of questions every time we have a meeting so that we can optimize my taxes to reduce my taxable income. For you, this may be asking someone in your life, you know, how you can save more money, or this could be asking someone in your life, how you can invest your dollars better. But it depends on what your goals are specifically and where you want to get to. But continuously mastering and asking the right questions can be a huge, huge difference maker for your money. Number 15 is to simplify your money. If you're the type of person who has 15 different investment accounts,

you have three different checking accounts, you have four different savings, accounts and you have your dollars all over the place, let's work on simplifying our financial system. Now, here's how you do this. One brokerage account that holds your Roth IRA, your taxable brokerage account, any other investments you have outside of maybe your 401K, which has to be somewhere else. So if you can keep them all in one place, even better. But having one place for all your investments, one place for all your banking and your credit cards and all of that stuff can be in one place as well, but just simplifying and reducing the amount of counts that you have. Married couples, if your money is separate, you have complicated your finances.

And so if you have two separate accounts out there, your finances have been complicated. So if it feels like it's overcomplicated, if you're Venmoing each other back and forth all the time, this may be a situation where you want to have a conversation to simplify your finances. But figure out ways to reduce friction within your finances that is going to allow you to create an easy to follow a process. Sometimes for a lot of people, when I look at their financial situation, the reason why they are having so much trouble is because their system is way over complicated. And if you overcomplicate a system, you will never get a grips on what the heck is going on with your money. And you will never be able to build wealth if you have no idea what the heck is

going on with your money. That is the hard truth that a lot of you need to hear. And if you don't think that that is going to work for you, then just think through a process of how you can simplify more. 16 is to create more than you consume. So if you are finding that you are not where you want to be in life, one big thing could be that you are consuming way too much instead of creating more. What do I mean by this? Go first and look at your screen time right now and go say to yourself, how much time am I spending on my phone, scrolling social media, or doing other things?

How much time am I consuming? Then I want you to think about how much time am I creating value? So how much time am I going out to my job and creating value for my job to earn more money? but outside of that, how much time am I spending creating value for myself? Maybe you're investing in yourself or how much time am I creating value for a business or how much time am I working on a side hustle, all these different things. And if the amount of time that you are consuming is higher than the amount of the time that you're creating, you need to flip that equation. If you're watching Netflix for three hours a day, but you also are not where you want to be financially, then maybe we need

to make a shift. Or if you are someone who is scrolling on TikTok for five hours a day and you are not where you want to be, then let's take some of that time and put it towards creating more. You need to look at your time management and understand where you are and you need to create more than you consume. Now, create means creating value, creating more value. That is the key to making sure that you turn your financial situation around. The last one is to avoid saying yes to everything. So this is something that I had to learn over the course the last couple of years, where people would send me requests for meetings, for example, and I would just think, accept the meetings at whatever time because my calendar was open. And very quickly, I realized that I

had to say no to a lot of different meetings and a lot of different times because I had to protect the specific time that I was most productive. So for me, I am most productive in the mornings. And it's usually from 8 a.m. to 12 is my high production activity time. And so during that time, I do not take meetings for the most part. Majority of the time, I do not take meetings anywhere from 8 a.m. to 12 o'clock. 12 o'clock beyond is when I will start to take meetings and I'd be willing to have conversations with people. But I learned I had to say no to protect this time frame

because I am prioritizing this time frame for what I need to do every single day. Maybe for you, you need to protect time that is going to help you be more productive over time. Or maybe you need to start saying no to specific situations that are causing you to spend way too much money. So there's a lot of people out there and they know who they are.

The movie 27 dresses, for example, is an example of this where maybe you're a bridesmaid in every single wedding that has ever happened within your hometown. Well, if that is you, maybe there's a situation where you've got to start saying no a little bit because these weddings are getting pretty expensive. And so I know that is a hard and a difficult conversation to have, but if people are asking you to be in your wedding

and you don't classify them as one of your best friends and maybe you need to start having some of these conversations to reduce the amount of money that you are spending. So learning to say no is a skill. And if it is not something that you are really, really thrilled to go out and do. It is something you want to make sure that you're protecting your time, your money, and your energy. So I want you to draw three lines on a piece of paper. Time, money, energy. What is sucking the most of those three out of your life? And I want you to say to

yourself, how can I protect myself from these things? This is going to be a really, really important skill to learn. Because once you start to master this, all of a sudden your life starts to come together and you can be more productive. You can build more wealth and you get more of your time back. So think about those three things. Think about saying no first. Then you say yes after you think about it more. Listen, thank you guys so much for listening to this episode. If you guys have any questions, please join the MasterMoney Newsletter by going to

mastermoney.com slash newsletter. And don't forget to follow this podcast on Spotify, Apple Podcast, YouTube, or whatever your favorite podcast player is. I truly appreciate every single one of you being here. And we will see you on the next episode. Let's talk groceries, specifically your groceries. Instacart, you want your groceries just the way you like them, right? Well, the Instacart app lets you do just that.

They have a new preference picker that lets you pick how ripe or unripe you want your bananas. Shoppers can see your preferences up front, helping guide their choices. Instacart, get groceries just how you like.