To start comparing quotes and simplify insurance-buying, check out Policygenius: Thanks to Policygenius for sponsoring this video!
In today’s video, we’ll talk about how to budget your paycheck so you know exactly what to do when you get paid.
One of the biggest takeaways from watching my channel is that you need to pay yourself first so your money works for you and not someone else.
One of the biggest mistakes that people make is not paying themselves first and before they know it, their entire paycheck has already gone to things other than themselves and building their wealth.
Watch until the end of the video for my thoughts!
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⏰ Timestamps ⏰:
0:00 – Intro
0:37 – Step 1
1:52 – Step 2
3:16 – Step 3
4:27 – Policygenius Spot
5:51 – Step 4
7:14 – Step 5 IMPORTANT
10:22 – My Thoughts
11:23 – WBF University
11:57 – LOL
ABOUT ME 👇
My mission is to provide my viewers with actionable content that enables them to create financial wealth. My videos reflect my real-world experience as a real estate investor, stock market investor, student of finance, and entrepreneur.
This channel allows me to share my passion for personal finance, stock market investing, real estate investing, and entrepreneurship. I produce content that I would want to watch, and because of that, I give 100% effort to every video that I make. I also believe in complete transparency and open communication with my audience.
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DISCLAIMER: I am not a financial adviser. These videos are for educational purposes only. Investing of any kind involves risk. While it is possible to minimize risk, your investments are solely your responsibility. It is imperative that you conduct your own research. I am merely sharing my opinion with no guarantee of gains or losses on investments.
AFFILIATE DISCLOSURE: Some of the links on this channel are affiliate links, meaning, at NO additional cost to you, I may earn a commission if you click through and make a purchase and/or subscribe. However, this does not impact my opinion.
Hey everybody welcome back to whiteboard Finance my name is marco and i’m here to Help you master your money and build Your wealth thanks to policy genius for Sponsoring this video but more on that Later in today’s video we’re going to Talk about how to budget your paycheck So you actually know exactly what to do When you get paid one of the biggest Takeaways from watching my channel is That you need to pay yourself first so Your money works for you and not someone Else one of the biggest mistakes that People make is not paying themselves First and before they know it their Entire paycheck has already gone to Other things other than themselves and Building their own wealth so let’s get Into this video stay tuned okay so step Number one is contributing to an Employer match if you have one okay this Can be something like a 401k a 403 b Roth 401k but some sort of tax advantage Retirement plan the reason that this is Step number one is that most of you will Have some sort of match of essentially Free money up to a certain percentage of What you contribute and what you earn so Many employers match the portion of Employees own contributions up to a Certain dollar amount or percentage so For example if you make a hundred Thousand dollars a year your employer May match up to 100 of a certain
Percentage of your salary uh in this Example we’re gonna use six percent of a Hundred thousand dollars so this is why It’s smart to contribute at least up to The max of what your employer match is So the max here is six percent in this Example and if your employer matches one Hundred percent of that you are Essentially getting an additional six Thousand dollars while simultaneously Lowering your taxable income by six Thousand dollars because a traditional 401k is a tax advantaged account you’re Reducing your taxable income so you’re Putting in six your employer is matching The six giving you 12 at the same time Reducing your taxable liability for the Year step number two is paying off high Interest rate debt so what is considered High interest rate debt well the logical Question is to ask yourself what else or What kind of return can you get with That money instead of paying down that Debt so remember paying off debt is a Tax-free risk-free guaranteed rate of Return so if you have a credit card that Is charging you 25 By paying off that debt you are making a Guaranteed rate of return of 25 I would take that return all day long And invest every single penny that i Have into that investment if i was Guaranteed 25 I consider anything above 6
To be high interest rate debt because That is a very healthy return on Investment with literally zero risk or Any taxable events the reason you want To pay off high interest rate debt is Because compound interest works both Ways okay it can work for you or it can Work against you say for example you Bought a playstation with a bunch of Video games and controllers Totaling a thousand dollars for example And you put that on a super high Interest rate credit card well now that Thousand dollar playstation could easily Become multiples more over time if You’re just making the minimum payments Minimum payments are bad Because this is constantly keeping high Debt in your life it will be one of the Biggest roadblocks to building wealth This is why step number two is so Important number three is to build your Emergency fund i could have maybe put This as step number two but the fact That paying off debt is a guaranteed Rate of return the math and finance nerd In me simply couldn’t pass that up Building out your emergency fund should Be anywhere between three to six months Of living expenses if you’re single Three months is most likely fine if you Have a family i’d lean towards six Months if you’re an entrepreneur or have A hundred percent commission sales role
I’d even lean more towards 12 months in This case i know this sounds super Conservative but if we went through a Period of 2008 all over again people Were losing jobs left and right and Unemployment was 10 and more having an Emergency fund allows you to create an Insurance policy on yourself and it Allows you to create a strong foundation On which to start building wealth from This is why these three steps are in the Order in which they are having too much Cash in an inflationary environment is a Losing proposition however when it comes To emergency reserves this is a Non-negotiable in my opinion once you do Reach that three to six months you need To start investing for retirement and Overall wealth building before we get Into step number four uh which is going To be investing here’s a word from Today’s sponsor policy genius i use Policy genius to find the right life Insurance for my family the peace of Mind knowing that my daughter is covered Just in case something happens to me is Priceless even if you have coverage Through your job that may not be enough Most people need 10x the life insurance That their company actually provides Typically life insurance gets more Expensive as you get older so it’s smart To get a policy sooner rather than later They even have options that offer
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Away at least 15 percent of your net Income into retirement so if you net a Hundred thousand dollars in a year you Should be putting away at least fifteen Thousand dollars of this this is where I’d like to incorporate the roth ira uh So if you’re not familiar uh the reason I like the roth ira is because it’s Incredibly flexible and you’re Contributing to it with after tax Dollars this allows whatever investment You have in the roth ira to grow Tax-free so upon retirement you will not Have to pay anything on the growth Within this account at the time of this Recording you’re allowed to contribute Up to six thousand dollars per year into A roth ira and you’re allowed to Contribute seven thousand dollars if You’re age 50 or older the rest should Then go into your employer tax advantage Account the other thing i like about the Roth ira is that you’re actually able to Take out what you’ve contributed without Any penalties and you’re actually Allowed to tap into some of your gains Without the penalty if it falls into Certain life categories such as medical Emergencies first-time home purchase Things like that these rules can change But at the time of this recording it’s Super super flexible and if you don’t Like what you’re invested in at the end Of the day it can just become a
Glorified savings account because you Can always pull out what you put in step Number five is to fill up your buckets So i could have taken this video to the Next level by talking about paying off Low interest rate debt prepaying college For your future children if you decide To have them and other things like that However i think that for most people Step five is where we stay disciplined And are able to actually enjoy life with The money that we make this is where i Introduce my bucket system so after Steps one through four are completed you Will hopefully have money left over for Expenses which you should have a good Understanding of how much these expenses Are and should pay them off responsibly After steps uh one through four are done And you’re also done paying all your Monthly living expenses let’s say you’re Consistently able to save one thousand Dollars a month or let’s pretend this is That thousand bucks right here so this Thousand dollars needs to be funneled Into your buckets these buckets are Essentially just different savings Accounts investments accounts cds or Bonds it’s completely up to you but i Prefer to keep this in an easy easily Accessible liquid account so i keep mine In a money market account your buckets Can be whatever you want them to be but Here are the five buckets that my wife
And i use in our personal lives so Bucket one is savings and emergency Which we discussed in step number three Bucket two is investing bucket three is The house fund bucket four is a car fund And bucket five is a travel fund i know Some of this is going off the screen i Apologize You should automatically be filling up These buckets based on your leftover Savings every week or every month you’re Able to do this easily and most savings Accounts or brokerages they actually Allow you to do this automatically so if You’re getting paid from your employer And this is the money left over in your Checking account you should Automatically have your money going into These buckets you can pick you can make Up your own buckets okay i’m just i’m Just talking about paying yourself first So with that money that thousand dollars That’s left over every month in this Hypothetical situation instead of Blowing it and not having any idea of Where it went you already have a job for Those thousand dollars every single Month month in and month out you know That x amount of dollars is going to Travel x amount of dollars is going to Savings x amount of dollars is going to Whatever you have earmarked for these Buckets this is where i say you know Take your life to the next level enjoy
The money you’re making have a bucket That really means something to you it Could be Saving for a car it could be a toyota Yaris it could be a porsche 911 turbo i Don’t know but the beauty of these Buckets is that you’ll always know if You have enough money to do the thing That you want so let’s take a travel Bucket for example If i know that i want to go to hawaii And it’s going to cost me you know five To ten grand Depending on how long i go and i don’t Have five to ten grand in that bucket i Know that i can’t afford to go to hawaii If i look at my car fund and i have ten Thousand dollars sitting in there i know That all i can afford is a ten thousand Dollar car uh repair maintenance Whatever car expense if you will I know that i can’t afford the 911 turbo Porsche right so this also keeps you in Check and it also prevents you from Lifestyle inflation so i hope this Bucket system helps okay so as always i End the video with my thoughts um you Don’t necessarily have to do these Things in order i suggest you do them in Order um you can follow dave ramsey’s Seven baby steps You can follow The money guys their financial order of Operations you can follow what i
Described here today obviously personal Finance is personal but i feel like this Is a good way to do everything in order That way you’re maximizing your money And also paying off debt while also Building a strong foundation with Emergency funds And then you can get into investing and More risky things like that so just keep In mind investing it’s a young person’s Game wealth building is a young person’s Game you have time on your side but That’s not to say that you can’t make up For it later in life this is just Putting you on a really good track so as Always if you got value out of this Video uh please hit the thumbs up button Thank you for sitting through today’s Sponsor as well that’s how i pay the Bills that’s how i keep Being able to create content like this i Hope you got value out of this video uh Please give the video a thumbs up please Subscribe and hit the bell if you Haven’t already and as always check out The link in the description below it is The waiting list for whiteboard finance University i will be traveling here for A couple of weeks i will have to delay The release of the university but i’m Working on hiring more professors and Also building out the content ahead of Time so it’s going to be a great product It’s going to be live streams with me
Fully transparent of what i’m buying Selling q a every week it’s going to be A very exclusive community of people That enjoy my content along with a ton Of financial education knowledge As always thank you so much for watching And have a prosperous day I think i went a little uh crazy with my Uh Office write-offs here I want to be making videos forever People let’s go [Music]
