7 Financial Habits Changing My Life

https://www.youtube.com/watch?v=flRcG5OSztQ There are some real key financial practices that have allowed me to go from being nearly bankrupt to having paid of $22,000 of debt and build up a 4-5 month buffer fund. Here are 7 financial practices that are really changing my life. 0:00 - Introduction1:33 - Van update2:17 - #1: Earn More Money4:47 - #2: Pay Myself First6:25 - #3: Building Up a Buffer Fund8:41 - #4: Finding a Budget That Works For Me10:53 - #5: Reducing My Expenses15:17 - #6: Living a Minimalistic Life17:01 - #7: Loving The Work That I Do20:00 - Financial Freedom Is No Longer THE Goal Recommended Videos: The 15 Minute Budget The Power in Paying Yourself First Transcription: Ryan 0:00my financial situation has changed dramatically in the last 12 months. And there's some real key financial practices that I've been doing that have really helped me along this transformation. So 12 months ago, I was looking down the barrel of a potential bankruptcy thinking, I don't actually have enough money to pay the bills that I need to pay. I remember having a freakout moment, I was either in June or July of 2019, being like, I don't know what to do. Luckily, I had some income coming in, I was able to delay some payments didn't have to go through bankruptcy. But in the last 12 months, I've been able to pay off $22,000 worth of debt, and actually build up a four to five month buffer fund for myself as well. So I actually have enough money to get me through the next four or five months. So very drastic situation to Okay, I don't know how to pay these bills tomorrow. And I may go bankrupt too. Now, I paid off a bunch of debt. And I've got this buffer fund. And I'm looking like I'm in a position where I if things go really well, which looked they probably won't go as well as I'd hoped I could potentially pay off my debt by the end of the year, but probably take a little bit longer than that. So big transformation in the last 12 months. And there's some key financial things that I've been doing that have helped me along that transformation. So today, as I sit in the van, and as I have a morning coffee, I want to share that with you. Before I do, let me just show you what I've been up to. And I did a video a little while back and the van was a complete mess. And you can see that now I've kind of really set it up the bed is made, I've got my standing desk here. So I can just kind of stand and work on my laptop here. Or I can actually pull up my esci with a seat on it and actually hang out on that the battery for the van is charging at the moment, it's been dead for a while. So it should be good to drive around. And I should be able to actually work on the beach in here very soon. So I'm very excited about that. So you may see me filming on location pretty soon. But I want to share these financial things with you. And there's seven of them. The first one, and I think it's the most important and it's made the biggest change. And that's actually earn more money and focus on earning more money. 12 months ago, I was in a situation where I was not earning enough money to pay for private school to pay for my debt to pay for my rent. and reducing expenses was a big part of that my kids are no longer in private school. I'm currently not paying rent at the moment, but actually building up my income and growing my income has been what's allowed me to pay off my debt. And allow me to build up that buffer fund. So the way that I approach it is I run my own online business. But each and every day, I'm doing actions that are going to actually increase my income in the long run. So rather than just working for the income that I'm going to earn for the day, the work that I do is going to increase my income in the long term. So whether that be content for on property, or whether it be articles for other websites, all the work that I do generate long term income and build up my income over time. So I have a thing that every single day, I want to be publishing at least one piece of content that's going to build up my income. And that builds up slowly over time. In August, when I really kind of started along this, I think I made about 30 or $40 in August from the work that I was doing. But each and every month that has grown significantly to the point now where we're talking about 1000s of dollars per month that I'm earning from work that I've already done, and I'm continuing to do work today that will make my income larger in the future. So earning more money was really the biggest one because that just allows you to get on top of things so much easier. Because if you're not increasing your expenses, along with our growing income, which I haven't been doing at all, then as that income grows, that those extra chunks of money you can actually use to pay off debt, or you can use to build up a buffer fund, or you can use to save for your house deposit. So earning more money is the biggest thing. Now how you did that in your life may be different from me, it may be through your career, getting a pay rise, changing jobs, getting a higher paying job, and maybe through starting a side hustle and doing something on the side in order to earn some extra money. Or maybe it's through investing in property that generates positive cash flow, maybe through shares or crypto or however you plan to do it. But that focus on earning more money and not raising your expenses in line with the money that you earn has just been super key for me. The second thing and like I'm kind of going in order of what's been most important, and the second thing is paying myself first. So I've talked about this years ago and it's something that I use used to do, and I've started doing again or have been doing for the last six to 12 months. And that's when revenue comes into my business, a set percentage goes aside to pay myself first. So we've got percentages to pay tax, obviously, and things that you have to do for that, but then also percentage to actually go towards paying off my debt or go towards my savings on my buffer fund. And it's when money comes in. For me, a percentage of that instantly goes away. So I didn't even get the choice of what do I want to do with that? Will I use that for expenses? What am I going to do with that? No, it gets put aside, and its sole purpose is to pay off debt, or to build up my buffer fund or build up savings. And then I have to live off the rest and work out what to do with the rest. It's almost like that money is not even mine, because I'm paying myself first. Now you might not do a percentage for me, I do percentages because my monthly income fluctuates. But for you, you might do a set amount every single month from your paycheck, when you get paid on payday money gets put aside into a bank account, and you don't get to touch it, you then need to pay your rent or pay your mortgage and pay all your living expenses out of whatever's remaining. So pay myself first, it just automates that saving all that debt reduction process. And by automating it, and then just focusing on what I have left, that's happening anyway. And so like something I have to actively do, it's just happening every single time that I get paid. The third thing that's been really key for me, and that was actually building out this buffer fund. So in the past, I used to just be like, I would run on the line. And so every extra dollar that I had, I would either spend it, or I would invest it. And so but I got myself in a situation where it's like, okay, you don't actually have a buffer fund. So things go wrong, you might have a couple of weeks of money left over, but then you're screwed. And what I learned through the last, you know, year or two, especially through this period with the virus and everything that's happening, given enough time, you can work out a solution to your monetary problems, you can reduce your debt, you can take drastic action, like move back in with your parents, or you can grow your income, or you can get another job or something like that. But often you can't do that within a month. Sometimes it takes a couple months, sometimes it takes three to six months to do that. And so I would always see the financial advisors say, you know, have a buffer Vonda three to six months. And it's like, well, that's unrealistic, and not really needed. But then I got myself into the position where it's like, okay, that that actually is needed. And I do need that. And what a buffer fund gives me is nothing right now. The buffer fund right now is not adding any value to my life, other than the knowledge that it's there. But what I lost by not having a buffer fund was so big, because 12 months ago, when I didn't have a buffer fund and I was in a bad situation, then you have to take drastic actions and things that you might not do, or might not want to do or might not be in your best long term interest. And you just don't have the time to solve those problems. But with a buffer fund, it's like, Okay, I know that I can solve this problem. And I can do it in a way that's for my long term interest. So building that up was key for me. And that happened over time slowly built it out through paying myself first. And rather than pouring it all onto the debt to pay down quicker. It's like, okay, no, I had some restraint. But without that Bhagavan still make the debt repayments and everything. But that buffer funds there if I need it. And then if I want to pay off debt faster, I actually have to earn money on top of the buffalo fund that I already have. So having that been super important. The fourth thing, and probably one through four or really, really important, and that is finding a budget that works for me, I tried so many different budgets throughout my life. And part of the reason that I got into a not so great financial situation was that I was not actively budgeting for a lot of my life.