We all have goals in life, whether it is to finish college, get the job that we want, get married and have kids, however, not so much of us think of achieving financial goals. We all want and have this thought in our head to make this amount of money but nobody really thinks about how to get that.
Today, I want to share my secrets and strategies of how I am changing my life and manage my money.
I started to think about achieving financial freedom in 2015 when I went back to my corporate job in 2014 and had my 2nd child in summer of 2015. Honestly it wasnt by choice but rather a big money lesson for me.
There is this quote by John C. Maxwell that resonated with me during my journey and it was “You’ll never change your life until you change something you do daily. The secret of your success is found in your daily routine.”
I had this massive credit card debt ($10K+ includes interest and fees) with Bank of America that was never paid off. The bank had sold the debt it to another creditor and since I wasnt paying it for years it caused like legal issues and I was slammed with a lawsuit. They tracked me and was able to take out $ from my bank and of course, I closed the account and opened another one. I was really running away from my financial problem. When I got to my corporate job, they found me and slammed my job to garnish my wages, at that time my options was either face it and pay it off or again leave my job. I didnt want to leave a good paying job because I was able to earn a steady income, pay off my current, debt, give back, invest and save. So in two years 2017 I had paid that credit card and this loan I had with my brother. I also was able to invest in my company’s 401k while paying my debt. It motivated me to go and payoff my other debt such as my 2nd student loan I had in 2013.
As a millenial, I didnt grow up being entitled like how the media is saying about our generation. I was born and raised in Hawaii by my 2 immigrant parents from the Philippines. My parents were hardworking, they had labor jobs and my dad worked 2 jobs all from the hotel & tourism industry.
I knew I didnt want to do what they were doing, I dreamed of working in a business office, professional, smart job so education was important to them and to me. I was a rebel growing up, due to the influence of who I was around but I can be proud to say I graduated high school and college when I was 20.
It wasnt easy to find a job that you like after college, I had to go through multiple interviews and do odd end jobs to find a way to earn an income because I have a student loan to pay and I wanted to buy all these nice things and do all these fun things while I was single.
Fast forward to 15 years later, I now am married with 3 kids. I started an online business called 7S Designs in my mid -late 20s because I wanted extra income that eventually will become a business so I can get out of the corporate world. I was doing it freelance but I worked so much at my full time job and took care of my kids, that it really wasnt a priority.
When I had my massage business and I decided to halt it for my corporate job and planned for my 2nd child in 2014. I had to shift my mindset. My children and my job are taking so much of my time and energy, so I asked myself what can I do online to earn an income to replace the cost of childcare and time at work that I never really cared about. I really was at my job to provide a living and benefits for my family and I. When you work as an independent contractor (Licensed MAssage Therapist ) and you have a partner who is also independent contractor who also didnt have steady income and benefits it was tough. back then I wasnt really good at managing money either. I didnt have much saved, I had a lot of credit card debt and student loans. I didnt know much about investing either.
In the fall of 2015, that is when I had to get financially educated and change something in my life so that in the next several years I didnt have to work for a corporate job.
I was hired full time at ATI in May 2014 and thats when I had benefits and increase in salary. I started working there 3-4 months as a temporary staff and officially got hired in May. The offered 401k and I invested maybe 2-3 % of my salary. It was automatic so I knew I already had something saved. I started to learn through reading online and watching youtube videos more about investing 401k, roth ira and then there was these new apps invented where you can start investing with change and or for this amount of dollars. Before you had to have $500 or even $1000+ to invest. I didnt even had that much saved at all.
My #1 Strategy: To automate investments and savings.
When you are employed, most offer 401k and Roth 401k and they match a percentage of it, so after 2-3 years in, my employer started offering Roth 401K and would match 4% of my salary, so if I put in $200, they are going to put $200 in for me. It’s really free money. I read about Roth and it made more sense for me to invest there because if somewhere in the future I need to access the funds like you want to use the cash to downpayment on your house, I would be able to withdraw without any tax penalties. You pay tax on it when you put in to the Roth, but you don’t get taxed when you deduct your contributions only on the earnings. You can fund your Roth for a total of $6000/yr.
*I currently automate my Roth IRA through Vanguard and Stash.
My #2 Strategy: Opened multiple bank and brokerage accounts and automate an XXX dollar amount or percentage of my paycheck.
When I started to get financially educated in the stock market and investing, I thought I need to have multiple bank and brokerage accounts. Currently I have the following:
Bank: Personal with U.S. Bank checking and savings
Bank: Business with Nevada State Bank checking only
Bank: Bluebird with AMEX checking only
Brokerage account: Vanguard – IRA and stock investments
Brokerage account: Stash – stock investments, IRA
Brokerage account: Acorns – stock investments and IRA
I have most of them automated. The most that I currently use is US BAnk and NSB accounts.
Vanguard, Stash and Acorns I have them automated from my bank accounts to fund my investments.
I am currently employed part time for my spouse business but theres no benefits, its small and new local business. I also run and manage my online businesses such as this blog and my digital marketing business on www.aj7screative.com. so it makes sense for me to have multiple bank accounts.
My #3 Strategy: Pay off debt if you still have them.
I heard about Dave Ramsey 7 baby steps to Financial Freedom and I’ll be honest, I did try it but I never continued it. Every now and then it comes up online and I ask myself if I should restart and if this plan will work for me. I know it does work, I just dont know if I want to go thru these steps.
As you know I was in massive credit card debt, at 2015 I had 1 active credit card, 1 big collection from BOA credit card that was automatically being garnished every paycheck (every 2 weeks), I didnt have a car loan well actually I had to pay my spouse for my Toyota Sequoia that he paid cash for, student loan i broke into 2 parts A&B they were $2-3K each from my massage school and then 1 loan with my brother who paid for my MAC. I didnt pay it off within a year to avoid the interest fees and it was crazy amount and I ended up paying for Mac and additional 500-1K extra on interest alone. Overall I probably had close to $25-30k in debt.
If you know about Dave Ramsey 7 baby steps, he suggest to pay off the ones that had less rather than higher interest because it was easier to get rid of something that had less and in turn cause an effect for you to continue to work on paying off the next one and so on.
But for me, I didnt have a choice on paying offthe BOA credit card at a later time, they would garnish 25% of my income after taxes and benefits every paycheck( I got paid every 2 weeks), so I was paying $600-700/month. that was more than my rent $550. I am thankful that God provided me more income thru my job that I made a choice to face my fear and eliminate a big pain in my life. I definitely learned a big lesson in life and money management. I am still learning, I still have some debt but not crazy amount.
BEcause of accomplishing this big goal, it did cause an effect for me to pay off the next debt which was my loan to my brother and then one of my student loans.
My #4 Strategy: Have a big goal and stick to it.
being Financially free will open a lot of opportunities especially now that TEchnology allows it. You’re able to have some freedom in your life. The money that you owed to pay your debt, can now be used for something you want to do that makes you happy, makes you feel good or someone else feel better. The goal is to really get educated in finance, they dont teach that when youre in high school and its something you need to learn on your own or from some mentor/teacher,. budgeting makes sense for most people, I dont think it is for me, I think its’s just being aware of tracking your money.
My #5 Strategy: Have multiple sources of income.
I dont recommend relying on 1 -2 sources of income. Dont rely on your job, dont rely on just the stock market. You really need to have at least 3-4 at minimum. The average millionaire has 7 sources of income. Our millenial generation mindset most will want to be a millionaire but as for me, it would be nice to reach that number but because I already know I dont need that much to live a happy and comfortable life.
Managing money is a learning process and I hate to admit it, but I love to shop for luxury items, travel and dining experiences and these do cost alot, but I got a grip on these expenses. Another thing that prevented from spending on these things was the pandemic in 2020. You couldnt travel much, dining was more available for takeout and delivery. I have to say I overdid spend online items such as Amazon.
With that said, I hope my strategies will give you an insight of how to manage money. Anything is possible if you really want it. My life quote is to keep going if its’ something that you love or passionate about, somewhere out in the world, your story can inspire someone or multiple people.