Introducing my financial Advisor, Carla! She is both Venezuelan and German making her the most unpredictable type-A friend in my life. She'll remind me hours in advance to show up to her house exactly at 8pm and when I do, she won't be home because she'll have forgotten we made plans. "What, you're at my house? Ooh yah! Ok I'll come back home." I love her more than most humans so I put up with it. This combo also makes for a frugal yet fabulous woman. On a modest income, she still manages to wear nice clothes and seems to be traveling the world every other weekend yet somehow still has money in the bank. How does she do it?!
She reveals all.
Carla's Money Tips for a Fabulous Life
1. Buy a red wallet
A Santeria spiritual guide once told my mom to only have red wallets because they attract money. My mom passed this knowledge on to me when I was 16. Since then, I have only owned red wallets and my account has never been in the negative. I’ve had a coral-ish one since 2013, so I guess it doesn’t have to be exactly red, but anything close will work.
2. Never have cash on you
Deposit all of your cash into your checking account. Paying with cash is the easiest way to lose/waste money. You always get change that you either lose or end up giving away to other people. Even the pennies – those add up! It’s also hard to keep track of your spending for this same reason.
3. Keep track of your spending
I recommend using a credit card that you pay off entirely every month (credit card interests are super high and never worth paying, unless you had a big emergency spending). Pay everything with this credit card, and pay it off on the 1st of every month. Most credit cards have this date set for your payment, but if yours doesn’t you can change it. This way you will know the exact amount you have spent at the end of every month, as opposed to spending from your checking account with a debit card, where things can get confusing and you might not see clearly how much you have spent on groceries, going out, shopping, drinks, etc. Obviously, there are certain things like insurance, rent, and bills that you can only pay with your checking account. But it’s also great to see those things as a separate category.
4. Credit cards
I’ve become addicted to credit cards that give you miles when you spend money. I particularly recommend the ones that give you a ton of miles if you spend a certain amount within the first 3 months. The Chase Sapphire is the best credit card on planet Earth. They will give you 60,000 miles that you can use with any airline when you open an account (you have to spend $4,000 within the first three months. Here are a few ways you can do that (because there is no reason why you would spend $4,000 in three months, unless you are Sarah Moore back in May 2016).
- Pay for the entire bill at dinners and have people Venmo you after.
- Call your parents and tell them you will pay for that new Eco washing machine they’ve wanted to get for so long. Then have them Venmo you too.
- Get creative!
If you decide not to travel (why would you ever do this?), you can redeem the miles as cash. 60,000 miles=$600. Also, since you will be paying everything with your credit card, you will be getting MORE extra miles/cash. Life has never been this fabulous before.
Other credit cards I recommend
- Chase Southwest Airlines
- Citi Bank American Airlines
- Chase Freedom (not for miles but they give cash back)
- American Express Delta Airlines
NOTE: all of these cards, except for Chase Freedom charge annual fees. Just call them before a year has passed and say you’re going to close you’re account because you cannot afford the fee (which is true, right?), and they will immediately waive it for you. I’m not sure if you can do this again the second year. But if they can’t waive it, just close the account – and remember to redeem your miles before doing so!
5. Savings Accounts
Capital One 360 is the best one because they don’t require a minimum amount or charge any fees. The interest rate isn’t great but whatever. If you can invest your money in stocks or something else you should. I hope to do that this year, but I don’t know enough about it yet so I will skip talking about this. I am constantly and compulsively throwing money into my savings account and you should too. I don’t like seeing extra money sitting around in my checking account because I’ll end up spending it. If you’re not in a great financial situation, start of with a minimum to put into your savings. I started with 50 bucks a couple of years ago. Then set goals every month of how much money you can put in there. But keep doing it because it will motivate you. Even if it’s just $10, but I’m sure you can do better than that.
These are the basic rules I live by. There are other ones such as: never pay full price for clothing or stuff because it’s not worth it, go to the grocery store on a weekly basis because otherwise you’ll forget what you bought and your food will go bad, eat at home as much as possible because cooking is good for the soul and body and wallet, freeze your ripe bananas and turn them into banana ice cream or put them in a smoothie.
Save money, be fabulous.