CHAPTER 14
Become Your Own Money Coach
We've covered so much together. You now understand what it means to be a financial adult and have a plan to show for it. That's worth celebrating. I mean it, go ahead and celebrate.
But before you run off into the financial adulting sunset, and look back and wave (and wink), we have to talk about what this all looks like moving forward. This isn't a one-time deal. Being a financial adult is a habit and a lifestyle.
It's a huge accomplishment to know what you know and to have a comprehensive plan, but the real magic is in maintaining that plan. It's in the updates, check-ins, and keeping your motivation.
To keep this all going, you need a financial coach (remember we talked about them in Chapter 8?). And I know the perfect person for the job. You.
But What Will You Actually Be Doing as a Financial Coach?
You will want to be your own cheerleader. You will make mistakes and get off track. I've been doing this awhile now and it still happens to me all the time. Yes, it's frustrating, but each of these missteps is a learning opportunity.
A money journey is an iterative process and mindset is really important. Come back to forgiveness, kindness, and slow and steady steps and you'll make some major headway toward your money goals.
Now before you get upset about this new role, know that these updates and check-ins don't have to take that long. What I'm talking about takes around two hours per month (but it can be less or more, depending on the complexity of your finances and how many people you're tracking spending for). And I'm going to give you the exact steps and framework so you can do it all yourself.
Enter one of my favorite times of the month, money parties.
Money Parties – The Gist
If you read my first book, The 30-Day Money Cleanse, you know about money parties. A money party is time we set aside to deal with our money. Because if we don't create and block off the time, it's not going to happen. Money parties are the most beneficial financial habit we can build. The financial plans you made are wonderful but unless you live and update the plan, you're not going to see the results of your hard work.
Here's everything you need to know to host your own money party.
Get Excited; How Will You Make It Fun?
I call them money parties for a reason. How will you make yours fun? Pour your favorite beverage, put on a money party playlist (link in the Financial Adulting toolkit!), light a candle, or get in your comfiest clothes. If you're not sure what will make your money party fun, it's okay to experiment. Try different things to see what feels fun and makes you look forward to your money parties.
Up the Ante with Rewards
It might sound silly, but rewarding ourselves really works. Is there something you can give yourself as a reward for completing your money party? It could be as simple as crossing it off your to-do list (so rewarding!) or watching your favorite show guilt-free. Again, don't be afraid to test things out. If something doesn't feel rewarding, try something else. And always follow through and give yourself the reward you decide on. If you don't, you'll start to learn it's not coming. This can derail your motivation.
Choose a Time and Day
Set aside two hours for your money party. Think about the time and day that will work best. Some like to have them during a leisurely weekend morning. Others prefer to jump in during the afternoon at work or in the evening when they finish work for the day. Don't spend too much time on this decision. If the time you choose doesn't work well, you can always change it.
Now put that time on the calendar. Even better, set up a recurring calendar reminder. How often should you have money parties? I recommend having a money party at least once per month. Some people like to have them weekly. The more frequently you have money parties, the shorter they will be, but you'll have more of them. So it's a personal choice. And again, if the frequency doesn't work, you can always change it.
Get Some Accountability – Create Your Dream Team
Accountability works. When we tell someone we're going to do something, there's a 65% likelihood we're going to do it. If we make a plan to check in with them, that goes up to 95%.1 You can get this accountability from a bestie, family member, colleague, or even your partner. I call these money buddies our dream team.
You don't have to share any money details with them; they are just holding you accountable for having your money party.
Set Your Money Party Agenda
It's time for the main event. What will you actually cover during your money party? There are some things you'll want to do monthly and others you can do once per quarter (every three months) or once per year.
The good news is, none of this will be new or surprising. You've done each of these things or similar things in the exercises in earlier chapters. Now we're updating, adjusting, and checking in. Head to the Financial Adulting toolkit to get your comprehensive money party checklist.
Monthly: Run Your Numbers
Running your numbers is the most important part of your money party. You know that beautiful financial plan you made? At your money party, you'll enter in what actually happened that month in terms of spending, saving, and earning. You can compare that to what you had planned and update your plans going forward accordingly. Maybe you were a bit too optimistic about your takeout spending. Update your future projections to a more realistic goal. Maybe you canceled a subscription that you had in the plan going forward. You can take that out for future months.
You can do this in a spreadsheet or, if you hate spreadsheets, you can do it by hand or using an app. I use a spreadsheet and differentiate between projections (guesstimates/plans) and actuals (what actually happened) by making plans in a blue font and actuals in a black font. This will all happen in the same financial plan template you filled out, starting in Chapter 4.
Some Money Party Pro Tips
- Keep an account list. Keeping a list of your accounts and credit cards in the spreadsheet saves a lot of time. You'll want to include any bank accounts and credit cards where you have income or expenses come through. If your money party is for March, log in to the first account and start with the transactions from March 1 (or the earliest date in March). If your first expense of the month is “Trader Joe's for $125,” you'd enter 125 into the “groceries” category of your template. Once you've entered in all the transactions for March, you can move on to the next account on the list.
- Have account usernames and passwords handy (or saved). Nothing slows us down at a money party like having to reset a bunch of account passwords. If the option's available, you can even bookmark each of the website pages you will need.
- Have a separate notebook or document open nearby. As you go through your expenses, you'll inevitably think of things you need or want to do, like cancel a subscription you're not using or call up a vendor. Instead of going off and doing this in the middle of running your numbers, write it down and save it for another time.
- Set a timer. If you don't finish what you want in the two hours, it's important to stop anyway. You can schedule more time later in the week. Having a money party is a new skill that we get better at (and quicker at) with time. How long it takes you your first time has nothing to do with how long it will take you in the future. I promise, they will go much faster!
- Take a guess (for “fun”). Guess what you spent this month. Write it in your notebook. This is for your eyes only.
Is there an app for that? If you use an app or software, you want to make sure you have a perfectly clear picture on your monthly income, spending (and in which categories), goal contributions, and what, if anything, is remaining. It's ideal too if you can have plans for future months and see an entire year total.
What if I don't want to do this? It's ideal to do this exercise every month, but if you know yourself and know you're not going to do it, you can start with a smaller task. Choose a category (or two to three) where you tend to spend the most or you think you might overspend. Tracking that specific category for the month is a great way to build up the habit.
You can also come up with a total spend goal and check in on that total (rather than individual categories). It will take some time to calculate what that total should be (don't forget to include sinking funds!) but as long as you spend within that amount, and are meeting your goals as planned, you know you are hitting your total spending goals.
Following are some FAQs for running your numbers.
What Do I Do About the Cash I Took Out at an ATM?
Ideally we categorize our cash because it's more informative to know we spent $20 on taxis than that we had $20 in cash. That being said, cash takes more work to track because we have to remember to track it ourselves – there aren't digital records like a bank statement. You can include any unaccounted-for cash in a line item called “cash” in your financial plan.
Should I Include My Credit Card Payments in My Expenses?
Regular credit card debt payments should be included if they are for previous purchases (e.g., you make a $100 monthly credit card debt payment). If you purchased dinner on your credit card for $35 and included that in “dining out,” you wouldn't want to also include the payment to your credit card to pay that down because you'd be double-counting the expense. This is another reason it's easier to not use credit cards we're trying to pay off.
What Do I Do About Items I Plan to Return?
If we purchase something using cash or debit, the money has left our accounts even though we expect to get it back. It can be helpful for cash flow purposes to include the purchase. Then, when you get the returned payment, you can take it out of your spending that month. This also holds us accountable for actually returning the things we plan to. If you aren't worried about cash flow, have a buffer in your checking account, or purchase and return the item in the same month, you might decide to just leave it out.
How Should I Handle Expenses My Work Is Going to Reimburse?
It's helpful to track reimbursable work expenses to make sure we get paid what we are owed, but most of us will want to do that in a separate area. Work expenses can throw our budgets out of whack and they aren't expenses that we're going to be paying for, so they don't need to be included in our monthly expenses. I usually recommend having a separate credit card for work expenses to keep this distinct and clear.
Weekly or Monthly – Up the Saving Ante with the Money Game
The Money Game turns saving more money into a game to make the process easier and a lot more fun. Here's how to play.
1. Calculate your Money Game number. Choose some areas of variable spending to include in the game (variable, meaning they change week to week and month to month). These areas can include dining out/takeout, drinks, Lyfts, groceries, shopping, and so on – everything you do on a weekly basis that's variable. Don't include fixed expenses like bills because our rent will be our rent (unless we move). No game in that.
How much do you plan to spend in each category? You have this mapped out in your financial plan so you can take it right from there. I like to look at this on a weekly basis. If you have $200 per month planned for dining out, you'll want to convert that into a weekly number ($200 × 12 months = $2,400 per year/52 weeks = $46/week).
2. Choose a goal (or two). Each week, you're going to track your spending in the categories you chose. If you spend under your Money Game number, you win and that amount goes toward your top-priority goal(s). Which goal(s) will it be? Look at your goals list (from Chapter 3). Which goals will have you excited to spend less during the Money Game each week? It's important to decide this ahead of time so you have some major motivation!
3. Track your spending. To play the game, track those variable spending categories for the week. You can start on any day of the week, but many people like to start on Monday and do their check-in on Sunday nights. You can play the Money Game less frequently and check in on these categories once per month, but I do find that we win more by doing it more frequently because we're more in touch with our spending week to week.
4. Transfer your winnings. At the end of the week, you'll total your spending for the week. If you spent less than your Money Game number, you win! If you spent more, try again next week. If you spent $200 during the week and your Money Game number was $250, you won $50. Congrats! That $50 gets to go directly to whatever goal you chose. As soon as you calculate your winnings, transfer the money to that goal immediately. You don't want something else to come up and take your winnings.
If you lose the Money Game, that's okay. We don't win them all. You can carry forward that loss into next week's Money Game. If you spent $300 and your Money Game number is $250, you start the week off with $50 of spending already on the books. If you lose multiple weeks in a row, your estimates might be too optimistic. It's probably time to adjust your spending plan accordingly.
Here are some other things you'll want to do at your money parties.
Monthly: Your Financial To-Do List of Things That Come Up
In between money parties, random financial things will inevitably come up. You probably already have a list of things you still want to do just from reading this book. Or maybe you noticed you were charged the wrong amount for a service. Whenever something comes up, add it to the money party agenda. If something urgent comes up, like you see fraud on a card or your account has insufficient funds, deal with that right away.
Monthly: Revisit Your Contributions to Your Goals
If you want to be saving more for any particular goal, see if you can make that work (or can get closer to making that work) by revisiting your expenses and income. This might be something you expect to do less frequently but it's important to revisit this often because you don't need to make monumental changes to make progress. Can you up the amount by $5? That's great, do it.
Monthly: Use and Adjust Your Sinking Funds
As you use your sinking funds, transfer the money over from your sinking fund accounts to your checking account (to reimburse yourself). Some like to make the transfers in the moment (i.e., right when they make the purchase) and others do it all at the end of the month. This is also a great time to check in on your sinking funds to make sure you are setting aside the right amount of money going forward given how much you plan to spend in each category. You can adjust your automatic transfers accordingly.
Monthly: Track and Celebrate Your Progress
Track your progress for each goal and decide on some rewards or ways to celebrate as you hit milestones along the way, as well as when you achieve the overall goal. You'll want to update your progress each month and celebrate accordingly. This can be extremely motivating and shows you how far you've come!
Need ideas? When you see a friend, share your recent win so they can celebrate with you (even something as simple as a “cheers” feels festive!). If you'd rather celebrate on your own, you can indulge in a frugal joy or use the money that would have previously gone toward a monthly payment to treat yourself. Think about what would be fun and something you would look forward to.
If You're Visual, Make a Physical Representation of Your Goals
This can be as beautiful and intricate or as simple as you want. For a simple one, I've included a goal bar chart for you to color in as you make progress. There are others in the Financial Adulting toolkit.
Okay, whew! That's what you'll do at your monthly money parties. If this list feels overwhelming, prioritize the following two items each month: (1) run your numbers (including an update of your projections) and (2) go through the financial to-do list of things that come up. Everything else can be done quarterly if need be.
Quarterly and Annual Money Party Checklist
Then there are some things you'll want to do every three months and every year.
Quarterly: Update Your Net Worth Tracker
Your net worth tracker is your moment-in-time snapshot of what you have and where. Quick reminder: your net worth is what you have (your assets) minus what you owe (your debts). You can update this every three months to see the progress you're making. If it's motivating and fun, you are welcome to do it more often. There's space to update it in the spreadsheet version in the Financial Adulting toolkit. If you have debt, you will also update your debt tracker once per quarter to track your progress.
Quarterly: Revisit Your Debt Paydown Plan
If paying down debt is a top-priority goal of yours, you can revisit your debt paydown plan once per quarter. Are you happy with how each piece of debt is prioritized? Do you want to increase or decrease your monthly payments? Because you will have all this information handy and updated, this shouldn't take you long to review. If debt paydown is a lower priority or you are paying off lower-interest debt like a student loan or mortgage, this doesn't need to happen every quarter. You can instead do a quick check-in each year.
Annually: Check in on Long-Term Goals Like Investing and Retirement
The stock market might have grown and the bond market might have shrunk (or vice versa). Getting your portfolio back to your ideal asset allocation is called rebalancing and you'll want to rebalance once per year for all your investments (retirement and otherwise). If your retirement portfolio is invested in target-date funds, you don't have to rebalance those accounts because target-date funds do the work for you.
What's the best way to rebalance? The simplest way to rebalance without incurring any taxes is to invest more money in the areas that need it. Let's say you want your portfolio invested 70% in a stock fund and 30% in a bond fund. Your recurring contributions are probably set up to go 70% to the stock fund and 30% to the bond fund. Great, makes sense.
When you check in, you see that your portfolio is now 80% in the stock fund and 20% in the bond fund. To rebalance, you want to beef up the bond fund to get back to that 70/30 split. You can change your recurring contributions to go 100% to the bond fund and 0% to the stock fund until it's back in balance. Check in each month and once the portfolio is back to the 70/30 split, you can go back to your 70% stock fund and 30% bond fund contributions.
When you buy and sell investments in your retirement account, you don't pay capital gains tax, so you can also sell some of the equity (stock) fund and buy more of the bond fund to rebalance in one fell swoop.
Every few years you'll also want to revisit the asset allocation you chose to make sure it's still aligned. If you used a questionnaire to figure out your asset allocation, revisit it. Or if you'd like to try another resource, go to Chapter 8 of the Financial Adulting toolkit.
Annually: Revisit Your Consumer Activism Criteria and Giving Plan, and Conduct a Spending Audit
While you might have a list of action items to accomplish from Chapter 6, you will want to revisit your criteria once per year and conduct another spending audit. From there you can create your consumer activism action items for the next year. You'll also want to relook at companies that you thought met or didn't meet your criteria, as the whole point of consumer activism is getting companies to change their ways! This is also a great time to check in on your giving plan. Do you want to give differently or up your contributions?
We also talked about the wealth gap and what we can do to help close it. Once per year is a great time to check in to reflect on the actions you've taken and what you want to do going forward. If your situation has changed, you might have a privilege you didn't have before that you can now use to help close the gap. This could be a changed position in a company, an improved financial situation, or even more time.
Annually: Reflect and Think Big – Make Your Annual Plan for the Next Year
Once per year we'll want to take a step back to reflect on how things are going and what you want the next year to look like. Just like you put your financial plan together for the current year, you'll want to do that again each and every year. It's a great time to revisit your big goals and decide if you want to change their priority.
You will project out your income and expenses for the next 12 months. To make it “easy,” you can even reread this book each year and go through all the exercises. Yep, I said it! This can be a yearly read! That way you have your plan ready to go before the New Year begins.
Other Things to Do Each Year
- Pull your free credit reports (annualcreditreport.com) and check them for errors. Some people like to pull them all at once and others like to pull one every four months as a way to check in all year long.
- Map out your medical expenses for the next year and update contributions to your HSA or FSA (if applicable).
- If something in your life has changed, revisit your insurance. Do you need a new type of insurance? Do you have enough (or too much)?
- Prepare and file your taxes. If you think of ways to make next year easier, update your system.
- Are you happy with your current banks and credit cards? Check in and decide whether you'd like to make any switches.
- If you've had any major life changes, update your will and your beneficiaries.
- If you contribute to a dependent care FSA, you must reenroll each year. Don't miss out on those pretax expenses if you have them!
How to Keep Your Motivation Up
This last chapter shows you the actions to take to maintain, update, and live your plan, which will be the key to your success. You can do it! Financial adulting is a habit and a lifestyle and when things get busy or when we make mistakes it can be hard to keep going. Everything gets a little less shiny over time, but that's where the real magic is.
I asked some of my very brilliant finance friends to give their best pieces of advice for keeping up your motivation. Here's what they said:
Yanely Espinal, YouTuber known as @MissBeHelpful and director of educational outreach at Next Gen Personal Finance: I followed as many relatable financial accounts as I could across all my social media platforms when I first started out on my big goal to pay off $20,000 of credit card debt in my mid-twenties. I built my support network and then I'd tap into it and ask people who used hashtags like #debtfreecommunity or #debtfreejourney what strategies worked for them. The words of encouragement and stories of inspiration alone kept me going! When all else fails, remember that as humans, we're wired for social connection.
Chelsea Fagan, founder and CEO of The Financial Diet, a digital media company about personal finance: Create a plan that involves many small steps that you can celebrate, including preplanned ways that you are going to celebrate them. Make sure that there are moments along the way where you're really acknowledging and rewarding yourself. There are a lot of studies that show that even just the anticipation of something is often just as fulfilling and rewarding and enjoyable as doing the thing.
Erin Lowry, author of personal finance series Broke Millennial: My absolute favorite strategy for keeping motivated with a financial goal is to nickname my bank accounts. Many banks and credit unions will allow you to change the name of an account from something generic like 15785217 to “South Africa Trip” or “Quit My Job” or “Down Payment.” The more specific you can get the better, like “Down Payment June 2025.” It's helpful to have a reminder right there for the moments that you're tempted to skim a little bit out of the account for an indulgence today or avoid contributing entirely.
Financial Adulting Checklist
- Commit to being your own financial coach.
- Plan your first money party.
- Get a money buddy for accountability.
- Go through the monthly, quarterly, and annual money party checklists or get them from the Financial Adulting toolkit.
- Test out some strategies to keep your motivation up all year long.
- Choose how you will celebrate finishing this book and building your Financial Adulting foundation.
- Continue to use the Financial Adulting toolkit and the book as a reference and resource going forward.
- Follow @thefiscalfemme and join our community (link in the Financial Adulting toolkit).
Congrats!
You did it! You are now a financial adult. I've said it throughout this book but please celebrate this milestone. You deserve it! Remember, being a financial adult means:
- Taking small, consistent steps that add up to big results
- Facing what's happening with your money
- Feeling confident in your financial plans
- Knowing you will get to have and experience what you want in life (which is the whole point of having money anyway!)
- Understanding the critical context of equity and personal finance
- Recognizing that your privilege can and should be used to help close racial and gender wealth gaps, and/or realizing that you may be starting at a disadvantage due to historic and systemic obstacles
Use this book and the Financial Adulting toolkit to come back to when you have a question or want to make your financial plan for next year.
It's been an honor and pleasure to join you for this part of your money journey.
Note
- 1. Stephen Newland, “The Power of Accountability,” AFCPE, https://www.afcpe.org/news-and-publications/the-standard/2018-3/the-power-of-accountability/.