you don't need a sixf figure salary to Achieve Financial Freedom in fact some of the most financially secure people I know don't earn huge paychecks they've just mastered the secret to making their money work for them and that's exactly what we're going to do in the next 10 minutes I'm going to show you how you can completely transform your financial life in just 6 months by following a clear month-by-month plan it's the same blueprint that's helped thousands of people go from paycheck to paycheck living to building real wealth if you're new here hi I'm I
qualified accountant and a former investment banker and on this channel we talk about all things personal finance and self-development let's start month number one have you ever heard of the ostrich effect this is a psychological bias where people actively avoid information that makes them uncomfortable especially when it comes to money so if you think about it have you ever delayed checking your bank account after a weekend of spending or ignored a credit card statement because you just didn't want to see the damage that is the ostrich affected action our brains convince us that if we
don't look the problem somehow doesn't exist the irony is that avoidance actually makes things worse stress builds up in the background small issues snowball into bigger ones and before you know it you feel completely out of control but the moment you face your finances headon something shifts Clarity replaces anxiety what if replaces what's next so this month month number one is all about ripping off that band-aid and taking full control step one one calculate your core four numbers these are the only four numbers you really need to focus on at this stage the first is
your net income so that is the amount that comes into your bank account after tax essentially your take-home pay secondly your fundamental expenses so your rent or mortgage your bills food I.E groceries Transportation anything that is fundamental to your day-to-day living then your future you any money that is already going towards savings and Investments third thing you need to know and finally your fund spending the fending that's left over for the Little Pleasures in life that make it that much more fun this when you start doing is going to make you feel a bit uneasy
you might discover you're spending more on dining out than you realized or that your subscription services are eating up a significant portion of your income but at this step knowledge is power and you'll see in the rest of the video why what we're doing in month one is so foundational to make this process easier I recommend using an app or a spreadsheet ideally one that does the calculations for you and is really easy to use because the last thing you need when you're doing something that feels like a chore is using a tool that makes
it even worse you just won't do it less friction is key if you want to use my intentional spending tracker it's linked in the description and it comes with a step-by-step video on how to set it up as well moving on to month number two this month your goal is simple save one month's worth of your fundamental expenses so if your fundamental cost that you calculated throughout month one is 2,500 that's your target amount to save up I know it sounds like a lot but this One Step alone moves you into the top percentile of
people who actually take control of the money a lot of people don't get to the stage not because they can't cut back but because their brain fights against it humans are wired for immediate gratification which makes saving feel like a loss but here's a reframe you're not depriving yourself you're buying Freedom so for the next month go all in cancel subscriptions that you barely use cook at home instead of eating out PS non-essential purchases and just know that this hit that you're taking in this month is temporary if saving that amount in 1 month feels
too aggressive spread it out to 2 months or 3 months but be honest with yourself don't use a stretched out timeline as an excuse to keep spending unnecessarily because the faster you build this the sooner you break free from the paycheck to paycheck cycle moving on to month three tackle bad debt and start building your emergency fund most people try to save and pay off debt at the same time but end up spinning their Wills that's likely because they treat all debt as equal and they don't know what to Target first we need to separate
the types of debt out some debt like mortgage or student loans can be seen as good debt and other types of debt like credit cards Consumer loans they're seen as bad debt it's stopping you from moving forward and comes with a really high interest rates so here's the plan rank your debt in terms of interest rate from highest to lowest for the debt that's over 8% prioritize paying off ASAP in that order that you listed it's the fastest way out how much should you put towards a step well you've already calculated what you have left
over from the tracker you filled out in month one it's it's the number that you have left after paying for all your fundamental expenses take as much of that number as possible and channel it straight into your highin debt repayment plan once you've cleared out your high interest rate debt instead of paying down the rest of your debt shift your focus to securing your emergency fund this way you're making faster progress start by Saving 3 to six months of your fundamental expenses so if you have a stable job aim for 3 months to start with
if you're income is unpredictable go straight towards the 6 months but don't get stuck here forever a lot of people pause their financial growth to keep stacking cash instead in month four you want to start investing whilst building out the rest of your emergency fund and by the way this emergency fund needs to be easily accessible but not too accessible so the best place is a high interest savings account it takes 10 minutes to set this up you don't know what account to use watch this video right here on things to look out for when
choosing don't laugh at how awkward I was in that video it's one of the First videos I recorded on this channel but it's a good one so month number four start investing whilst you're topping up the rest of your emergency fund a lot of people think investing is complicated risky or something you do after you've saved for years but the truth is that the sooner you start the more wealth you'll build so first thing you want to make sure that you're maxing out your employer benefits this is the easiest form of free money if your
employer offers a retirement match contribut it enough to get it it's literally free money and a 100% return on your contributions if you skip this you're leaving money on the table step two open a tax advantage investment account where you invest matters just as much as what you invest in so if you're in the UK open up a stocks and shares Isa that's a taxfree investment account if you're in the US it's eoth Ira that's a tax-free retirement savings account you'll have different ones depending on the country that you're in these accounts let you keep
more of your gains instead of losing them to tax step three invest in Broad Market funds keep it really simple you don't need to pick stocks in fact most Pros can't even beat the market consistently so instead invest in index funds and ETFs they spread your risk across hundreds of thousands of companies the S&P 500 alone has averaged a 10.5% annual return over the last 20 years that's the power of long-term investing and step four keep building out your emergency fund without missing out on investing you don't have to choose between saving and investing you
can do both so at first you want to prioritize your emergency fund then you might want to shift to 70% towards going towards your emergency fund and 30% going towards investing then 50/50 and then once you've built up your emergency fund you can focus 100% on wealth building this way you're always moving forward building security and growing wealth at the same time month five increase your income every job should give you one of two things a learning opportunity or an earning opportunity ideally you want both but if you're getting neither you want to do something
about it either negotiate a pay rise or start exploring better paying opportunities in most cases switching jobs is the fastest way to increase your income and to really drive this point home I've got a video breaking down my salary year by year for the 9 years I spent in Investment Banking and you'll see exactly where the biggest pay jumps came and that's why I'm saying this if you're underpaid or undervalued don't just wait for your employer to notice make the move that benefits you and if you want to try something new create a side income
sell a skill start freelancing monetize a hobby or build an online income stream even an extra 200 300 a month can massively speed up your savings and Investments so that's month five increasing your income and then we're on to month six automate and optimize have you ever heard of decision fatigue it's a psychological phenomenon where the more choices that we make in our day the worse our decisions become and by the time we get to the end of the day our brains are so exhausted and so we default to whatever is easiest whether that's skipping
the gym ordering a takeout or just ignoring our finances and that's exactly why automation is one of the most powerful things that you can do for your finances is when you rely on manual decisions to save invest or pay bills you leave room for inconsistency some months you'll be on top of that and then other months when life gets busy you'll fall behind that's why the secret to financial success isn't discipline it's removing the need for discipline alog together so in this month we're doing two things first we're automating your entire money system bills and
fixed expenses you want to set up direct debits for rent for mortgage for utilities for insurance for debt repayments this prevents late fees and also protects your credit score then you want to automate your savings and Investments schedule automatic transfers to your savings your investment accounts your retirement fund and you already know what you can set up in this stage because you've already figured out what your finances look like you know how much you need for your fundamental living expenses and so you know what percentage you have available to be able to allocate towards your
savings Investments and you want to pay yourself first you want to put that into your own pocket before paying anyone else and then the rest is your every day spending use a separate account or a card for your fund money your daily expenses this makes budgeting effortless because when the money's gone you know that it's gone the second thing you want to do is review and adjust your financial plan because your financial plan isn't set in stone your income changes your expenses shift your goals evolve continuously checking with yourself and ask yourself are my automated
savings and Investments still aligned with my goals has my income increased if so can I increase my savings rate the financial world is constantly evolving new investment opportunities tax laws money saving strategies emerge all the time so the more you educate yourself the better equipped you'll be to capitalize on Smart Financial moves to stay up to date you could always subscribe to this channel I upload a new video every Sunday well most Sundays with the primary goal of helping you take control of your money and ultimately your entire Financial life and then I also throw
some self-development in there too so if you haven't already you can click the button below to subscribe and I'll see you next Sunday
