In this episode, I talk about the importance of having clear financial priorities so you have a roadmap and guide for setting financial goals and creating a budget you can stick to. I outline four main priorities that you can use to help you set financial goals and to validate how you are spending your money. I highlight the importance of an emergency fund, clearing high-interest debt, and investing for long-term financial security. Towards the end of the episode, I share details for my new one-on-one coaching program, 'Emergency Proof Your Money'.
00:01 Introduction to Money Moxie Podcast
00:53 Personal Update and Introduction to the Episode
01:26 The Struggles of Starting a Financial Journey
02:44 Creating a Financial Roadmap
03:21 Introduction to Financial Priorities
04:24 Priority One: Necessities
06:19 Priority Two: Building an Emergency Fund
08:12 Priority Three: Paying Off High Interest Rate Debt
10:10 Priority Four: Setting Financial Goals
13:52 Recap of Financial Priorities
15:07 Announcement of New Program: Emergency Proof Your Money
15:57 Conclusion and Invitation for Feedback
Emergency Proof Your Money Program - Work with Elizabeth to review your finances, define your money goals, and setup an easy to follow and flexible budget that is in alignment with your values and goals. Schedule a 1:1 with Elizabeth or reach out via email (elizabeth@elizabethmchelle.com) for more information.
Welcome to Money Moxie, the podcast that's all about taking control of your financial destiny. I'm your host, Elizabeth Michel, and I'm here to help you on your journey to financial empowerment. In each episode, we'll dive into personal finance, wealth building strategies, and mindset shifts that will help you master your money. Whether you are just starting on your financial journey, Or looking to level up your money management skills. Money Moxie is here to provide you with the knowledge, inspiration, and motivation to help you thrive. Are you ready to unleash your inner financial powerhouse, improve your money mindset, and make savvy money decisions so you can secure your financial future? Then you're in the right place. Let's get started. Hello everyone. And welcome back. So I feel like it's been a minute since I've recorded my last episode. I hope all of you listening out there have had a wonderful holiday season so far. My husband and I were able to host our family in our new home this year, so that was great to have everybody there. Very busy, lots of amazing food. I was in a food como. And what felt like days, but loved every minute of it. So I want to get into this episode and talk about priorities when it comes to money. One of the things I see people struggle with a lot is knowing where to start when they're managing their finances. And when I first started out with my own financial journey. I was all over the place. I wanted so many things all at once when I started, earning my first paycheck. So when I thought about my finances, it was hard to set goals because I didn't fully understand. What my priorities were or really what they should be. I started budgets and I'm one of those who loves my spreadsheets, but then I'd scrap it because I wasn't sure how I should allocate my money, like how much goes where. How much do I put in this bucket? What do I do with this other money? Or I would set really strict goals, but something else would come up and something that I did need to take care of. And then I would feel guilty if I didn't meet my goal that I had set, or if I had to adjust it to take care of whatever financial responsibility came up. But now, I have a roadmap that I follow, and I want to share it with you because I think it is so valuable in creating a foundation and a direction for setting money goals and creating a sustainable budget that is also flexible. I'll also be sharing details for my new one-on-one coaching program called emergency proof. You are money. So stay tuned until the end of the episode for more details. Now let's get into today's topic.So first, like I said, I have a roadmap where I have clear priorities for how I spend my money, and this really doesn't change. So having this defined set of financial priorities is something you can use as a guide and something you can refer back to regularly. And it's so important to have it as a foundation for managing your finances. These priorities are what help ensure that you're taking care of yourself, like covering all of your basic living necessities, that you're also contributing money towards your goals. and enjoying your life right now. This priority list is also a great reference to have as you set new goals, as you adjust the goals you have, and also to help you validate how you're spending your money. I have four main priorities that I follow and recommend, and I'm going to review them in order with the most important one first. Priority number one, necessities. Before everything else, first and foremost, you want to make sure you are taking care of your basic necessities first. These are things that you need to live. So things like your mortgage and rent, food, utilities. Now, necessities are not one size fits all. They're very much based on the individual, everyone is different. Everyone has different situations and different commitments and our lives change all the time. So what you need may be different from what someone else needs to live. When you sit down to identify what these needs are, you ask yourself, do I need this to live? Or is this something I can live without if I really had to? Now for me, I love my streaming services because I really love watching movies or a great series. It's something that I do to decompress. And this time of year is my favorite time of year, hands down. I love the holidays. And one of my traditions with my husband is to watch all of our favorite Christmas movies. movies. So we rewatch our Christmas movies every year. Some of the ones on my list are The Holiday, absolutely one of my favorites, and Home Alone, classic. nOthing better for me than curling up on the couch when it's starting to get cold out, having the Christmas tree lit, a nice glass of wine, and popcorn, and enjoying a holiday movie marathon. However, I don't need my streaming services to live, so those would not be part of my number one priority as far as the money priority list. So Getting into priority number two, build an emergency fund. And I can't stress this enough, but I believe an emergency fund should be a top priority in your money plan if you don't have one already. And yes, it should go even before paying off your debt. And this is why. An emergency fund gives you the ability to cover your necessity expenses while you write out whatever emergency that comes up that you are experiencing. For example, like a job loss. If you're focused on other goals like paying off debt first or saving for a house and something unexpected financially comes up, you could be in a situation where you're not able to cover your basic necessities if you don't have that emergency fund. And honestly, the last thing you want is to have an emergency and not be able to deal with or process the mental and emotional stress that comes with it because you're too focused on trying to figure out how you're going to pay for it. I really want you to have financial security and the ability to take care of yourself no matter what happens. I talk about this a little bit more in detail in episode one of my podcast. I talked about how having an emergency fund and a solid money plan. It really helped me through my own job loss and also gave me the space and the option to process the loss. That is the biggest thing that an emergency fund gives you is you have options and you have the space to process and you can still take care of yourself. So very important priority number two. Priority number three. Here's where you pay off your high interest rate debt. And when I say high interest rate debt, I mean anything like around 7 percent or more. Debt can really snowball and quickly chip away at your income. And credit cards are typically notorious for having some of the highest interest rates. So I would definitely include those as part of paying off your high interest rate debt if you carry a credit card balance. The reason I say that priority number three is focused on paying off your high interest rate debt instead of all of your debt is because once you're paid off your high interest rate debt, I do think it's worth it to allocate some of your money to investing while you continue to pay off your lower interest rate debt. And that's because a lot of the times when you invest, especially depending on how long you invest, you can see a rate of return in your investments of around 7 percent on average and sometimes more. So investing as soon as possible and taking advantage of time in the market is a great way to create future financial security for yourself. Especially if you want to be able to supplement your income later in life, or if you want to allow yourself to fully retire. Personally, I paid off all of my debt in my early 20s. That was one of my very early financial goals, and that was what I focused on. And now, the only debt I have is a mortgage, and since that has a lower interest rate, I continue to make my monthly payments on it, while I'm also prioritizing my investment goals. And I talk about specifically paying off debt and tips for paying off debt in episode two of my podcast. So check it out. Now on to priority number four, which is the last priority in my list. These are your money goals. Think of your remaining financial money goals as another way to pay yourself first. This is where these are something you are working toward. Either in the short term, long term, or both. And these goals can include investing for retirement, so I touched on that a little bit earlier, or supplementing your income for your later in life, living expenses. And depending on what this looks like for you, having expenses covered for yourself later in life should be a top priority. It's important to set aside money now so you can take advantage of time and so that you can take care of yourself in the future. I think retirements and how we look at retirement can be different for everyone. Some of you may want to fully retire, meaning at some point you don't plan to work. And some of you May not want to retire fully. Personally, My plan is to work for as long as I can. I think I would get bored if I wasn't working and doing something. I just can't see myself sitting around the house every day doing the same thing. So I want the option later in life to work when I want to. So I want to be able to give myself that flexibility. I want to be able to do work and things that I enjoy. And I want to have savings and investments that support me regardless of how much income I have at any given time. So my point is to have a plan that sets you up with options and security for later in life. Now, other financial goals can include things like continuing to pay off your lower interest rate debt. So once you've paid off that higher interest rate debt, you can continue to pay down your lower interest rate debt, while also allocating money towards other financial goals like investing. And I mentioned earlier, I'm also doing that. I'm paying my mortgage off while I'm also allocating money to my investment goals and also to my other financial goals. Some other goals can include things like saving for a house, buying a new car, going on vacation. For me, I went on an absolutely amazing trip to Europe last year for my 40th birthday. It was a trip I knew I wanted for my birthday. I had been thinking about it for years before I reached that milestone. So I saved for it. And I was able to do everything I wanted to do, including first class flights, staying in nice hotels, going on private tours, and eating to my heart's content because I just love trying new restaurants. Think of your money goals as ways that you are taking care of your future self in the short and long term. You're setting aside that money. So you aren't spending beyond what you make or beyond what you have, which means you are not putting your future self in more debt. Super important. You're investing in you, whether it be to have a comfortable retirement, realize your dream of home ownership, or going on that dream vacation. So To recap. The money priorities I recommend, and I think that are such an important foundation to managing your finances, setting money goals, and building a budget that you can stick to, that's flexible, and that's easy, are number one, take care of your living necessities first. These are the things that you absolutely need to live. Number two, build that emergency fund. That way you always have that financial security and know that you are able to take care of your living necessities if anything were to come up. Number three, Pay off your high interest rate debt. And number four, these are your financial goals, like buying a house, a car, vacation. I'll be talking about setting goals and creating a very easy to follow budget in upcoming episodes, and I'm really excited to share that with you because the way I budget is so easy to follow and it's sustainable and flexible because, like I said, our lives change all the time. I'm so excited to share that I am launching a new program called Emergency Proof Your Money. I'll be offering one on one sessions inside this program and we'll work together to review your finances, define realistic and actionable money goals, and create an easy to follow and flexible budget that aligns with your goals. I know the topic of money can feel overwhelming, and I really want to support you and help ensure you start 2024 feeling empowered and confident in your finances and put you on a path to sustain financial security and wealth building. If that sounds great to you and you want to learn more, the details to connect with me will be in my show notes. Thank you so much for listening to this episode of Money Moxie. If you found this content valuable and it resonated with you, please subscribe and leave a review. I'd love to hear from you. And if you want help with improving your relationship with money and creating a solid money plan, check out the show notes for more information on how we can work together. I'd love to meet you and help you on your financial journey.
