Season 2 is all about how to be good with money. Jillian takes the time to answer five reader questions about money management.
Q1: How Can You Become A Good Saver Vs. Spender?
This question comes from listener Sunny. She says,
I have a basic budget in place. I pay my bills on time and I’m paying down debt, but I feel behind in savings. I’ll transfer money to my savings, but then something happens and I transfer it right back. As you can probably tell, my emergency fund has little in it. How can I become a good saver vs. spender?
When you feel like you’re doing everything right, but not making progress it could mean you don’t have a big enough gap between your expenses and your income. Jillian suggests that Sunny look at her expenses and experiment pausing one of them for a month. Maybe it’s dining out or clothes shopping. On the other side, it might be time to seriously look at increasing her monthly income.
If you’re looking for a high-yield savings account for your emergency fund or short-term savings goal, check out CIT Bank!
Q2: How Do You Find A Financial Advisor That Believes In Financial Independence Principles?
Michael would like to find a financial advisor who is on board with Financial Independence. More specifically, he wants to know what questions he can ask the advisor to help make his decision.
Jillian states that any financial advisor should be comfortable talking about money. The best way she teases out if the advisor is comfortable talking about money is by asking them ‘How do you get paid?’. Their answer will tell you a lot. Often financial advisors get a commission from products they recommend, and how they answer will give you an idea if your best interests are a priority.
You need to ask ‘I just really want to make sure I understand how you’re compensated in the overarching scheme and in each product you are recommending.’
Q3: When Should You Learn To Invest?
This question is from Alisha, a retired widow. Her only income is social security. She has been able to use life insurance and savings to pay off medical debts after her husband passed away. Over time, she has slowly built up an emergency fund. Alisha wants to know if she should keep saving or learn to invest?
Jillian says her first priority should be to finish building that emergency fund and make sure it’s accessible. Keeping this money in a savings account with a high-interest rate is ideal.
Even if you’re 60,65, 70,.the reality is you might still have a long timeline for your investment.
Learning to invest the money after you’ve established the emergency fund will be the next step. Jillian reiterates that it doesn’t matter if you’re over 60. You still have a long timeline from that point for investments to grow. Money invested at 60 could be money you use at 85. Jillian’s pro tip is to be less risky with your investments at this point. Meaning you should opt for a portfolio that is heavier in something like Total Bond Market funds, which tend to be more stable than stocks.
Q4: How Can You Create A Better Relationship With Money?
This question comes from listener Lisa. She says,
I tend to squirrel away money and have a hard time spending it. I grew up in a single-parent household where we lived paycheck to paycheck, and I was very aware of the financial situation. Not wanting that for myself, Iput a good chunk of money into savings and I do my best not spend. As I ease into adulthood, it’s hard for me to come to terms with all the bills I need to pay and find myself denying things that typical adults need to purchase like furniture or clothes for work. How can I create a better relationship with money?
Lisa is doing a great job transitioning from where she was. She is obviously aware of her money and has developed some frugal habits. Jillian reminds Lisa that it’s important not to let money stress her out. Sometimes you need to spend money. It can even be an enjoyable practice when spent on things of personal value.
To get started, Jillian suggests she figure out her core expenses. These are items you have to pay each month no matter what. Then she needs to pick two or three things she really values. Next, create a discretionary fund to pay for those things and keep it funded as a part of the budget.
Since Lisa truly struggles with the scarcity mindset, Jillian recommends she write down how much she enjoyed each discretionary purchase. It can be a powerful reminder of why value spending is a necessary part of the budget.
Q5: How Can You Stick To A Food Budget?
Holly gets two common questions from friends and clients. She first asks how she can reduce grocery shopping expenses.
Jillian’s pro tip is to find ingredients that are naturally affordable. Ingredients under $1 is a good place to start. This could be onions, beans, rice or pasta. Next, find a recipe that leans on these inexpensive ingredients. Make one new recipe like this each week. Over time, you can build a repertoire of cheap meals your family loves.
Holly’s second question is about eating out. She asks how she can go out to eat with her two kids (or more) and stick to their budget.
Really analyze if eating out at a sit-down restaurant with kids is something you want to spend the money on. If not, how can you find alternatives for your family to have a fun experience? Jillian says that it’s not fun to go out with five little kids. It’s just not. Instead, they go out for small treats like ice cream. Or they opt for something like Costco pizza as a treat to bring home.
For more tips like this, follow Jillian on Instagram or watch Jillian on YouTube.