A Guide To Leveling Up Your Finances In 2023
Hey Sis, you might be wondering how to level up your finances in 2023. If so trust me you are not alone. The truth is that a lot of us want to get a handle on our money, know where it’s going, and learn what we can do to make it work better for us. In this guide you will get to meet four BoujeeBeauties that are killing it in the world of Finances, we will also explore some of the best ways to level up your finances in 2023 and manage that money, Honey.
If you're ready to level up your finances, the first step is to understand that it is a marathon, not a race. This means that leveling up requires patience, persistence, perseverance, and time! Please do not expect yourself to make huge strides overnight but instead always remember that you are a work in progress and that it can take months or even years of consistent effort before seeing the consistent results that you want to achieve. However, if you dedicate yourself fully to improving your financial situation and implementing what you learn then there is no limit on how much you can grow financially!
Manage That Money, Honey
Making more money will not solve your problems if cash flow management is your challenge! Sis, you can make all the money in the world but if you don't learn how to manage your money then you will always feel in a constant state of lack and one word that is not in my vocabulary which is 'broke'
Being able to manage your money is an important skill, and it's one that you can't afford to ignore. Money management is all about prioritizing your needs and wants, and determining what you can afford to spend your money on. It's about living a life of comfort and not of excess but ensuring that you can afford that comfort!
You can make a lot of progress by simply being more mindful of your spending habits, how you think about money, and where your money (energy) is going. In fact, one of the first steps in leveling up is to track your spending. Knowing where your finances are being allocated to is essential to understanding how you can re-route them.
Dasha, a financial activist also known as @thebrokeblackgirl on Instagram is a true example of a woman that has learned how important money management & leveling up your finances is and is now able to share her gifts, knowledge & voice with us!
Track Your Spending
It's time to take a look at your finances. If you're feeling overwhelmed by debt, or if your savings account is looking a little parched these days, then it is time to come down to reality and make some changes so that we can get you back on track. If it feels like it will take forever to get on the track that you want, just know that everything seems impossible before we give ourselves the chance to actually do it. A common thought that most people who want a better financial future have one in common is that they know how much money they're spending every month--and they also know where all their cash is going (or should be going). Once you can identify yourself as someone who is building healthier financial habits and mindset and those two pieces are in place, then what once felt like the impossible becomes much more attainable.
In order to do this effectively though, we need some tools for tracking our spending habits--and luckily there are plenty available online today such as Quickbooks. Quickbooks is a readily easy platform to navigate and use for tracking income, and expenses whether that may be personal or if you are a Business Beauty that is needing an efficient bookkeeping system for tracking financial records for your business.
If you've read our blog post on Stacking Your Coins 101 then you should know that it is never too late to start saving money. When we have income coming in there is a rule that goes Pay Yourself First. Paying yourself first is significant for living a healthy & wealthy lifestyle because before our money comes to us fees are being taken out, the government is getting paid, and health insurance is due if you have a retirement account with your job that is automatically deducted as well so when our money does reach us what is left should first be paid out to you. You can do this by putting your money in a high-yield savings account, the percentage of which you pay yourself is dependent on what you can afford to save which is determined by your expenses, the cost of your lifestyle, and other priorities that you may have to take care of with your money. If you would like to know more about a high-yield savings account keep reading.
High-yield Savings Account
If you're looking to grow your savings, a high-yield savings account is a great place to start because they offer a higher ROI (return on investment) than your usual savings account. The first thing to consider when opening one is the interest rate--you want something that's going to give you a substantial return on investment or else you have to ask yourself what other vehicle can I put this money into to gain a better rate of return. One of the benefits of having a High-yield savings account is that you can get 4.0% annually depending on the banking institution so it is important to do your due diligence, You want to look out for these aspects when choosing which bank you are going to grow that relationship with
Inspect if there is a minimum fee, associated with opening the account, a monthly fee for keeping the account open, and a penalty fee if you take money out of the account or close it, by doing your research you can find banks that don't make this a requirement.
Shop around for offers when choosing which bank you will open your High-Yield Savings account with. Many banks will have offers such as "Get $250 for opening a High-yield Savings account with us" while those sound amazing in theory you want to ensure that you are reading the fine print because there will be a minimum amount of money that you have to put into the account and time frame that you have to keep that money in the account without touching it to qualify for that 'free' $250. Generally, the minimum amount that you would have to invest in the account would be $5,000-$25,000 with a 90-day sitting time frame so Sis please read the fine print!
Lastly, make sure that it's FDIC insured (Federal Deposit Insurance Corporation). By law, traditional banks and accounts like these are insured up to $250,000. That way, even if something goes wrong with the bank holding your money and they go under, there's still some kind of insurance protecting those funds in case anything happens!
Build An Emergency Fund
The first step to building an emergency fund is knowing how much you should save. The answer depends on your income and expenses, but a good rule of thumb is that you should have enough money in savings to cover 3-6 months of living expenses.
If you're just starting out and can't spare much from your budget at the moment, start by saving what you can. With an emergency fund consider opening an additional bank account at a different bank from where you conduct a majority of your transactions but also not a bank that will make it an inconvenience to retrieve your money if and when an emergency does arise. Doing this is more of a psychological tactic because you are less likely to touch that money if it is not as easily accessible which we want to keep in mind with an emergency fund. While having an emergency fund is important, creating an opportunity fund is just as important because while it is nice to have money sitting it is even better to create opportunities for your money to grow.
Tiffany Alice also known as @thebudgetnista is the author of "Get Good with Money: Ten Simple Steps to Becoming Financially Whole" her book is a highly recommended must-read as it sheds light on the powerful concept of building wealth. In this book, you will find helpful resources that will aid you in your journeys such as worksheets, checklists, and a tool box full of knowledge.
Invest in Yourself
The 'Opportunity Fund' is a tool that allows you to save money for opportunities. It's designed to help you move past the fear of saving and hoarding money so that you can start investing in vehicles that will drive you forward in life such as businesses, stocks, real estate, peer-to-peer lending and so much more!
We all have passions, interests, talents, and abilities that we want to explore and develop and we all want a chance to be fulfilled by what makes us the happiest. It could be a hobby, it could be education, or it could be a business. No matter what it is, investing in yourself will help you reach your goals and make the most of your life.
The benefit of having an opportunity fund is that you can learn how to monetarily benefit from investing in yourself which then only accumulates more wealth for you!
Set Financial Goals That Make You Excited
Setting achievable financial goals is an important part of creating a plan for yourself. A great way to start is by creating a 10-year plan, which will give you an understanding of what you need to do to reach your goals.
Here's how we suggest getting started:
1. Create a 10-year plan. Work backward by starting at year 10 then year 5 then year 3 then year 1. This should include your goals, and where you want your life to be at each point (career, where you are living, financial health, relationships, and state of mind)
2. Now that you have this information, create an action plan for each goal in your 10-year plan. What steps will it take for you to get there, and what behaviors will you have to improve on to get there? what habits will you have to develop to achieve success?
3. Make the choice to start becoming that version of yourself that you want to be in 10 years, doing just one thing a day whether that be educating yourself on something that will help you get closer to your goals, implementing a more effective routine, changing things that were not working for you before will allow you to become greater by 1% each day. At the end of the year, you've already become a 365% improved version of yourself than you once were.
Keep your 10-year plan with you in a visible place, whether that is your Lock Screen, favorite purse, on your wall or even just carrying it with you on the daily. This will serve as a reminder of what needs to be done and a remembrance of where you are going.
Grow Your Coin
There are a few ways that you can grow your coin, aside from money that you may receive in the form of a gift there is Active and Passive income. The goal that I believe a lot of us share is ultimately getting to a point of not having to actively work as much but being able to have income coming in from different streams in an overflow of abundance!
Having just one source of income can not only feel at times 'not enough' but is just like having all of our eggs in one basket. If that basket falls and the eggs break then what will you be left with? Creating multiple streams of income and more specifically more passive streams of income is what truly leads to the Financial Freedom & Freedom of Time that we are striving for. It has been shared that the majority of millionaires have at least 7 streams of income and I can guarantee you that all 7 of these income streams are not active but rather passive.
The difference between passive & active streams of income is...
Active income is money you earn by working—whether that means a traditional job or a side hustle that turns into a career. This kind of income is great, but it can feel limiting when you are restricted to what that income allows you to make. Knowing that a paycheck is coming in every week or two is great as a security to cover expenses and lifestyle costs but thinking of ways to build passive streams of income is what sets apart the 99% and the 1%.
Passive income, on the other hand, is money that accumulates with minimal effort once it has been established. An example of this would be selling digital products that once created and listed does not require any additional time to be put to sell. Another example of this would be investments such as stocks. While the stock market may fluctuate and there will be times that you are at a loss, the trend over the past 100 years is that it always goes up. Investing your money into different stocks for long-term wealth with little money is a great way to build a passive income without much effort.
Passive income streams are great because they give you more freedom to focus your time which is one of the most expensive aspects of life to do other activities that will allow you to enjoy your life and create more wealth.
Tiffany James is an excellent source of knowledge and the result of taking action when it comes to investing & growing your coin. You can find her @modernblkgirl on Instagram to learn how you can get started!
Cultivating A Wealth Mindset
The first step is to understand that you have the power to change your financial situation by changing your own outlook on money. If you can internalize this fact, then you've already taken the first step toward cultivating a wealth mindset -- and it will be much easier for you from here on out.
Next, comes learning about how other people have done it before you: what did they do differently from others? What lessons can we learn from their successes? What mistakes did they make along the way? By studying these questions carefully and taking notes on them as needed, we can begin building our personalized action plan for success based on previous successes in this area and lessons learned. "Think and Grow Rich" by Napoleon Hill is a world-class read that is ranked as the #2 Finance read with #1 being the Bible. This book takes you on a 20-year journey that Napoleon Hill ventured on by studying the richest people in America during the early 1900s. He studied their financial habits, mindset, and behaviors to create what we know today as one of the most-read, translated, and implemented books of all time.
Here are some tips for creating a wealth mindset:
Start with where you are now. What do you think about money? Is it scarce or abundant to you? How do you talk about money with others? Are you calling yourself 'broke' or know that money comes back to you 10x over.?
Express gratitude for all that you do have and what is to come. Believing in something before it physically manifests is the key to having effective affirmations & manifestations.
Always be learning! Read books on wealth, listen to podcasts about money management, and start creating healthy discussions about how you want to grow your relationship with money rather than where you are now with it—the more knowledge you have about wealth creation the more you will understand that money is energy and how we think about money & wealth starts with our mindset.
Marsha Barnes who is the creator of @thefinance bar is a certified financial social worker that has made it her mission to aid in your journey to financial wellness. On her page, you can find wealthy mindset quotes, affirmations & mantras to boost your confidence & shift your mindset.
Sis, did you enjoy this guide to leveling up your finances in 2023? Let us know in the comments. Remember there are many ways to improve the way you handle money, but it all starts with a bit of knowledge and action. Whether you're just starting out on your financial journey or have been working on improving your situation for years now, there is always room to grow & expand! When you know where you're headed, it's much easier to steer in that direction. So think about what financial situation would make you feel like a level-up success. Whatever your dream scenario may be, write it down on paper so that you can refer back to it whenever you need some inspiration or motivation!