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IE 144: Financial Planning Steps with Anna Sergunina
Today’s guest, Anna Sergunina is a certified financial planner. All of her childhood and young adult life she planned to become a doctor, but in college, she decided to switch majors because she was intrigued by finances and so she ended up with a Business degree instead.
She connected her desire of wanting to be a doctor and help people with her business major and has been a financial planner for the last 15 years.
The New Money Mindset
I find that we as women tend to shy away from the topics of money and financial planning.
The very first thing that I hired out in my own business was a bookkeeper because money was not something I enjoyed handling or felt that I was qualified for.
You have to have a healthy mindset when it comes to money.
You need to view money as a tool that you can use to help you get whatever it is you want – whether that is providing for your family, growing your business, or helping you achieve your goals and dreams.
Learning the Basics of Finances
Once you take on this mindset, you can start learning and mastering the basics of finances and how they work. You need a strong foundation for your personal finances.
The first thing you need to know is where your money is coming from.
This can seem straightforward but so many people don’t know what kind of deductions are being taken from their paychecks every week or if they are paying enough taxes.
The next part is how you are spending your money.
What does your expense line look like?
These are simple things to work on, but they are not always easy.
Paying Regular Attention to Your Finances
We have mindsets about budgeting being evil and think that if we have a budget, we can’t have live freely or enjoy ourselves.
Anna and her husband have “money dates” where they talk about their finances, discuss where their money is going, and decide if they are being wise with their income. This allows them to have freedom from worrying about their money.
If you are not looking at your money on a consistent basis, you will be creating more worry for yourself. Looking at your finances regularly and with that mindset of your money being a tool allows you to have peace, and possibly even enjoy it.
Creating a Budget That Works
The very first thing to do when creating a budget for yourself is to look at your monthly spending.
What really works for Anna is listing all of their monthly expenses and dividing them into two categories:
- fixed expenses – expenses that are the same every month – mortgage/rent, car payments, cell phone, etc.
- variable expenses – these expenses are ones you have a choice on how much you spend – groceries, eating out, travel, etc.
You will start to see what your bottom line really is and what you need to be bringing in as far as income.
Anna divided their expenses into two checking accounts – one checking account paid the bills each month, (fixed expenses) and one covered the things they just wanted to do (their variable expenses).
Having this separation provided clarity and peace of mind and prevented any problems from having two people tapping into the same account with their debit cards.
3 Financial Planning Steps to Help Prepare for The Future
It’s important that while we are paying our bills and living our lives right now, we are also thinking about the future.
Whether that is planning for retirement or buying a house, we have to take steps now to prepare for that.
There are 3 steps you can take to help you prepare for the future:
- Become clear about what you want. Identify your specific goals for the future. A financial goal is different from a wish or hope because you assign a specific date or time frame around it. Even if you aren’t 100% sure that it will happen, you have something to work towards.
- Work backward. If you know that in 3 years’ time, you need $100k for a down-payment on a home, what are you going to do right now to get to that goal? You can work on figuring out your savings ability, (as long as you already understand your income and expense situation) and invest your money so that it grows.
- Commit to your goal. The big reason these goals don’t work for most people is that they don’t stay the course. Life happens, and sometimes you don’t want to pay attention to your finances, which is why you fall off the wagon. This is where those money dates really come in handy.
Setting Aside Money For the Future
Once you have your fixed expenses taken care of, if you have money left, you should set at least 10% aside towards saving for the future. If you are able to do more, do it.
There are creative strategies you can put in place to help save more towards retirement, like opening a retirement account that allows you to defer more taxes.
A lot of freelancers don’t know what is going to be coming in month to month, based on ads, projects, or affiliate income. It’s important that, no matter how much is coming in, once you understand your expenses, you are able to start putting that money aside to help save towards the future.
Savings should be the first thing you pay out of your income each week or month, and the great part is that you are paying it to yourself. Eventually, this will become natural, and putting money towards saving will feel like auto-pilot.
The 28-Day Challenge
I personally love challenges that give actionable items that propel our businesses forward. Anna’s is currently running a challenge called the 28-Day Challenge to Create Your Own Money Roadmap. The challenge includes online training broken down into specific topics.
Each day you have a module, (short videos) that cover these topics: goals, mindset, insurance coverage, life insurance, how to make money on top of our money, investment. Each day, you will be given something specific to do and a workbook to fill out, as well.
At the end of the month, you will see a whole lot of improvement that you didn’t know was possible. Once a week, there will be a live Q&A, so that you can ask your questions and find out how other people are experiencing the challenge.
Go check out the 28-day challenge and sign up. You need to be thinking about your financial future and this is a great tool to help you along the journey.