How to Make Your Money Work for You—Income & Budgets & Debt, Oh My!

Money can’t buy happiness, but it can buy back time from the daily grind, and time is priceless. So if you've been following along, we’ve already talked about the year of “2020 Vision” and how the past 12 months have added up to a total outlook transformation for life to come.

In my last post, we talked about a few financial building blocks which have served as foundation pieces for The Serenity Project—an experiment in winning the wealth-building game. We talked about vision, goals, objectives, and the small details that create the big picture. Now let’s talk about processes, strategies, and where to learn how to do this stuff.

The following post contains referral/affiliate links which may save/earn both you and me some money on products/services, or provide me with a small commission that doesn’t cost you anything, as we’re supporting one another in winning the wealth-building game together. Deal?

Streamline Processes (Where can I strategically simplify my finances?)

With a clear picture of monthly income/output, discussed previously in terms of creating a zero-based budget, it quickly becomes easy to see where there’s room for improvement. In today’s world, with a little legwork and online investigating, combined with a few basic disciplines and best practices, I’m finding that the more I can put on autopilot to support my goals, the better. Along these lines, as part of my total outlook transformation in 2021, here are a couple of my new favorite things...

Strategy #1: Control food costs. I love food. I love cooking big meals. I love eating out. I love experiencing restaurants and trying new things. I don’t love seeing how much money I spend on food. That’s the hard part about a zero-based budget—it shows you the truth about yourself. Not only have I been in the habit of grossly over-spending on dining and groceries, I also tend to use busy schedules as an excuse to eat out or eat poorly. I want to eat healthier, but meal planning and shopping and cooking takes a lot of time, and I usually end up spending that time on other things, and next thing you know, I’m giving up on life and grabbing Mexican after work because it’s just across the street on my way home...

Well, in today’s world, there’s no excuse for me to allow myself this sort of laziness anymore. These days, I’ve put my grocery budget on autopilot (while increasing my quality time and promoting my household’s physical health) by using meal kit delivery services. I’ve tried a few different ones and narrowed down to two favorites:

1. Home Chef if you like to spend a little time cooking yourself (30-50min per recipe), or
2. Factor if you just want to eat a quick, healthy, pre-cooked meal without any brainpower required (2.5min in the microwave) and spend your time elsewhere.

Not only do I know I'll have healthy portions for every meal, I'm also saving a ton of money on impulse purchases now that I can plan on a set, weekly budget amount for meal delivery orders. These services make my wallet and my waistband happy.

Strategy #2: Set it and forget it. If there’s one thing the psychology of money has shown time and time again, it’s that the more we can automate when it comes to spending and saving, the better.

With today’s smartphones, autopay discounts, online banking options, and investing apps, it’s possible to schedule most, if not all, of a typical monthly budget to happen on its own, without wrestling temptations or struggling over decisions about what to do with that paycheck burning a hole in your pocket.

With my zero-based budget as a basic tool, I’ve made use of auto-transfers and online bill pay options for years. Now I’m using this tactic to grow my investments behind my own back, too.

Using the Stash app for beginner investors, I’ve set a weekly schedule to automatically invest 10% of my weekly pay into a selection of my favorite stocks, ETFs, and REITs, so my portfolio keeps growing over time without having to think about it. As far as budgeting goes, I know that money’s already “gone” before it gets to me, so I don’t have to agonize over decisions between “Do I save it?” or “Do I spend it?” My money’s already going to work for me, whether I pay attention to it or not. Win!

Get the Debt Ball Rolling (Which money will have the most impact?)

Now, everybody’s situation is different, and everyone has their own unique context for decision making, as far as which targets or objectives to prioritize first. For me, my long-term ambition is to build an income-yielding investment portfolio that provides financial freedom for the future—but first, to free up money to put toward that investment portfolio, my immediate short-term focus is to aggressively eliminate miscellaneous personal debt. Here are a few ways I’m approaching this...

Strategy #3: Cut loose. If 2020 served no other purpose whatsoever, it helped a lot of us start asking ourselves what really matters and what’s really essential. Personally, I’ve been complaining for years about the cost of cable TV and how my monthly bill keeps getting more and more expensive, while the quality of available programming with my paid package never seems to get any better… but I never got around to doing anything about it. Til now. After almost a decade as a Mediacom customer, with my “2020 Vision” coming clear and my priorities sharpening in focus, I finally did it. I cut cable, I subscribed to a couple of streaming services, and I’m saving over $100 a month... that I’m now putting toward extra payments on my personal debt. See Strategy #4.

Strategy #4: Start big. Some financial gurus suggest starting with your smallest debt balance and paying it off as quickly as possible, then putting that payment amount toward your next smallest debt balance and paying it off as quickly as possible, and so on and so forth. This is called a “debt snowball,” per Dave Ramsey's Complete Guide to Money. The rationale is that the "snowball" effect builds morale and motivation, as we see those smaller debts crossed off the list and work our way up toward the bigger debts.

I get that… but I prefer the “debt avalanche” approach. This strategy usually focuses on the highest interest debt, rather than the smallest balance, with the intent of saving the most money over the long term and putting that money which would’ve gone toward interest into paying off other debts instead. Make sense? In my case, my highest interest debt is a personal loan that comes with a cool 22.9% APR, which also happens to be my biggest monthly payment. That means the sooner I can pay off this loan, the sooner my biggest expense will be gone... freeing up a significant amount of cash each month to pay off other debts much faster. See Strategy #6.

Strategy #6: Roll over. Taking the “debt avalanche” approach, I’ve already got my next step of debt elimination planned out. Once my personal loan is paid off, I’ll add the amount of that payment to my monthly credit card payment, which will help me pay off that balance in a fraction of the time (and with a fraction of the interest) it would take otherwise. But meanwhile, that’s not all...

Strategy #7: Hit pause. Instead of just making minimum payments on a credit card that’s costing me interest, I recently took advantage of an introductory offer to transfer my balance from a high-interest card to a Discover card that comes at 0% for the first 14 months. This means that while I’m focusing on paying off my personal loan as quickly as possible, I can put that card interest on hold, so my credit card debt isn’t costing me any more money in the meantime. Now I can rest assured making minimum payments on my card, while making extra payments on my loan. Then, when my loan is paid off, I can make bigger payments on my credit card (remember, "debt avalanche") that will wipe out the remaining card balance before interest starts adding there. Even with a 3% transfer fee, the Discover card offer combined with this approach still saves me a ton of money in interest over the long run, freeing up the most money possible to aggressively pay off debt as quickly as I can.

Strategy #8: Repurpose. Last but not least, as anyone with student loans is aware, payments and interest on federal student debt has been paused at least through September of this year. That’s six more months the amount that normally goes toward student loans can go toward ruthlessly eliminating other miscellaneous debts, before my federal payment plan kicks back in! At this rate, I’ll have my personal loan and my credit card paid off this summer, reducing my monthly debt obligation by 54% by the time September comes around. Then I’ll have the freedom to choose whether to keep the debt avalanche going (putting that 54% worth of freed-up cash flow toward paying off my student loans or my mortgage), or to significantly increase the amount I’m investing in my portfolio for future growth and ongoing income from that point forward. The sky's the limit...

Learn and Leverage (Where can I gain the knowledge to keep moving forward?)

In the midst of it all, I’m a lifelong learner. I can nerd out about pretty much any subject. For the first time in my life, so far in 2021, I’ve felt the internal sense of freedom to truly embrace and enjoy the process of learning how to leverage resources and build wealth. I'm on F.I.R.E., baby! Here are just a few of the places where I’m having a whole lot of fun lately...

Stash. In addition to using the Stash app to build my portfolio, I’ve made use of the built-in recommendations, learner library, and email newsletter to get acquainted with investor lingo and take my first stab at diversification. (Cost: $1/month for a basic account, which the weekly #StashStockParty is paying for in stock rewards so far)

Motley Fool Stock Advisor. Starting out with no money and no investing background, this was a bit of a leap of faith for me, relying on a sense of do-gooder spirit gained from these authors—as well as a 30-day refund option if I regretted making the move. So far, I’m a couple months into my one-year Stock Advisor subscription as a newbie investor, and I've already come a long way! While I might not renew this subscription for next year, the guidance and research I’ve gained in my first few steps on my investing journey have been really invaluable, and I'd definitely recommend the resource for other people starting out with no clue, like I did. (Cost: $99-$150/year depending on promo codes , which can be found all over the internet with a little Googling)

Coursera. This one's my next frontier… Now that I’ve got my feet under me and I’m understanding the general nuances of investing and trading, I’m ready to get serious about making this my way of life. And Coursera’s specializations and professional certificate programs in investing and portfolio management, business finance, and data analytics are getting my geek juices pumping. I can’t say I’ll ever be interested in a career with a wealth management company or any other type of formal financial advisory role, but with such affordable, self-paced online education available at my fingertips, you can be darn sure I am interested in getting my hands on the real-world know-how to put this information to work in my own life... And if I can do it, can you? (Cost: $39-$59/month subscription for university-level education that can be offset with the refer-a-friend program, so we can all help each other learn affordably in just a few hours a week, and basically none of us have any good excuse for not learning how to do this stuff)

Strategize Income Streams (Where else can I find extra money to put toward my goals and objectives?)

Of course, if you’ve spent any time at all reading about F.I.R.E. or wealth-building or entrepreneurship, you know it’s all about the side hustle and the multiple streams of income. Personally, as I already mentioned in regard to Dave Ramsey’s “gazelle intensity” mindset, I’m of the mind that it’s important to maintain some quality of life now, rather than assuming I’ll have time to enjoy my life later. In other words, I don’t plan on working myself to death for the prospect of a comfortable retirement. I used to be a workaholic, and it’s not worth it. I don’t want to sacrifice today for “someday.” I want to be present where I’m at and enjoy the people I’ve got.

So in all things underlying The Serenity Project, for as much as I believe financial freedom is a real aspiration to work toward for the future, I also believe every money move should align with my values and priorities in the now. Yes, I’m willing to work hard and learn a lot and set goals for myself. No, I will not make the love of money or the idea of getting rich the main focus of my life. That said, I’m still finding ways to strategize multiple income streams that add value, exercise my skills, and support my goals. Here are just a few ways I'm putting my money to work for me...

• Primary full-time employment (45 hrs/wk): living expenses & extra loan payments
• Secondary part-time job (15-20 hrs/wk): extra loan payments
• Side gig one night a week (5 hrs/wk): extra loan payments OR play money for investing
• Rental income from small plot of farm property (0 hrs/wk): taxes & savings
• Donating plasma (3 hrs/wk): play money for investing
• Paid surveys online (while donating plasma 3 hrs/wk): play money for investing
• Dividend income from investments (0 hrs/wk): automatically reinvesting to compound over time
• Vocal content monetization (whenever I feel like popping over here to write a post): money for investing while sharing what I’m learning (priceless)
• Affiliate marketing (as much as I remember to include some referral links here and there while I'm already writing a post): money for investing while sharing useful tools (priceless)

That’s where I’m at so far… I’ll share more about the ins and outs of all of these things along the way. In the year ahead, I plan to continue writing about my experiences as a beginner investor, using the Stash app to build a portfolio in the stock market. I’m not saying you should do it, too—I’m just gonna try it myself and let you know what happens. I’m learning as I go, so if you’d like to come along for the ride, we’ll be learning together, hopefully doing our small part to turn the tables and win the wealth-building game, for the good of greater society.

Does that sound overly ambitious to you? Maybe we just haven't allowed ourselves to think big enough before.

If you like anything you read here, please share this article with your social media networks to get more people thinking about how we can all start winning the wealth-building game. Like to connect? Drop me a line: jeanmillersays {at} gmail.com.