[Music] well hey you guys okay so I have a question for you how much money would you need to make you feel very financially secure well according to a recent survey most people say that they need at least $186,000 to feel financially secure making that a year mhm $186,000 now for reference the median household income is around $75,000 now $186,000 a year might feel like a lot to you or maybe not enough I guess it really depends on where you live your lifestyle how much you currently are making if you have kids too hello child care costs uh maybe if you got a mortgage you know pre 2021 when rates were down or maybe you got them post 2021 and now the rates are higher so it can depend very much on where you are are in life but why do most Americans feel like they need more than double of their annual income to feel financially secure well on oneand life has just gotten more expensive I mean everything from food and gas and all of it and I'm sure you've noticed the difference in your grocery bill or when you go out to eat things are just way more expensive and our money doesn't go as far as it did 5 years ago in fact $100 in224 is about the same as $81 in 2019 and if you've got kids you're probably spending way way more on child care than ever before I know a few firsttime moms and I'm like oh my gosh I'm sorry this is your first experience cuz it's so expensive it's crazy then of course rent housing prices and interest rates have risen through the roof over the last couple of years which again makes people feel like they're just not getting ahead and you guys it's a lot I mean people are really feeling this and it's really easy just to blame the economy and Americans haven't been making though the best decisions with their current money than they could as well and with that I'm talking about debts yeah 77% of American households have at least some type of debt and the average amount of debt per adult is around $667,000 so it's no wonder that people really are feeling like they don't have enough money you know when everything that they make is going out to debt payments and when you get used to living a certain lifestyle then you end up slowly spending more more which is called lifestyle creep which is very real again your expectations of life and your standard of living and expectations is just higher at a certain point and it continues to rise a little bit each time you just want nicer and nicer things without even realizing it can be subconscious too so that is why I am a firm believer that feeling financially secure is less about your income and more about how you're managing your income so let's talk about five things that you can do to feel financially secure number one I would look at your house in situation because for a lot of people their mortgage is what's keeping them from feeling financially secure now real estate is something that I think should be in everyone's you know Financial portfolio I want you to be a homeowner but if you have felt pressured especially in the last you know two or three years of like oh you got to get a house you got to get a house you got to get a house more people are going and getting a mortgage that can't afford it and what's really difficult is we talk to people that you know 45 50% of their income is going to their house and in that case you are house poor because if half of your income is going just to one expense which is always going to be your largest expense you'll always rent or your mortgage will be highest on your budget but when it's taking up that much of your income you don't have as much left to go and you know pay for other bills or to to do anything you want so you know it is really powerful to look at that part of your budget and what you're paying so again ideally it's no more than 25% of your take-home pay so if you are house poor this is a really big Point here so don't I don't take it lightly but I would consider downsizing I would say hey maybe I have to move out an extra 10 or 15 miles from where I want to be because again I know this isn't an easy decision just say oh we'll just move but sometimes you do have to make a big change to get yourself in a stable place and housing might be one of those for you also the second way to become financially secure might be a career change so again I don't say this lightly these are some big moves but for some people you've been in the maybe the same job or the same industry and you haven't you know looked at other options because when it comes to your income this is a really powerful way to build wealth but also taking care of your basic needs so if you're out there maybe there's growth opportunities for you maybe your current role is paying significantly more somewhere else and again I'm not I don't want you to just you know job hop all the time I feel like that's kind of like the end thing like oh my gosh every like 18 months you're just find a new job but the idea is if you're not being paid market value or you don't see a growth trajectory for your income where you are this could be something to look at and say hey maybe I change you know jobs or maybe I change complete career paths and that happens for a lot of people uh because again it's just going to give you options so that's something to think about again big change I don't take that lightly by saying that to you but again think about it all right number three is to ditch your debts so you guys debt is one of the biggest reasons people do not feel financially secure I when you look at the average car payment for a new car you guys is over $700 today I mean that's wild if you have two of those it's $1,400 going out in debt payment so whether it is car payments student loans credit card debt all of that if you pay all that off and do a budget just for fun on having no payments how much money would you have like what what would that feel like and I guarantee you You' feel a lot more secure without that money going out to debt all right number four is to build your emergency funds so a lot of people feel financially insecure when they don't have money saved in the bank which is totally understandable so that is why you need an emergency fund so having extra cash set aside and not relying on like your credit card well my credit card is my emergency fund no I want you to be your emergency fund so get $1,000 as quick as you can after you pay off debt you bump that up to 3 to 6 months of expenses and again that just gives you some breathing room that really is the cushion between you and life is that emergency fund all right lastly number five you knew it was coming Rachel's a big fan of this one get on a budget that's right seriously to feel secure with your money you have to know where your money's going you guys I mean I can't stress this enough a budget helps you see where you need a cut back on your spending it shows you maybe where there are places that you're spending that you don't even realize cuz things are on just autodraft and like you are able to see a clear picture of your money and your situation and so making sure that you're doing a budget every single month is so key cuz again you can cancel subscriptions eating out all of that but it's really hard to do that unless you see what is going on so the easiest thing you can do right now when it comes to budgeting is going to everydollar.com Rachel and creating your first budget for free so I will leave a link in the description so you can go ahead and check that out and download the every dooll app to get started because here's the deal you guys there is no magic number when it comes to feeling financially secure some people feel great and they're making you know $60,000 $70,000 some people are feeling stressed making $200,000 so again it's not always about the income but it's what you're doing with your income that matters and the sooner you start changing your money habits the sooner you can break that paycheck to paycheck cycle now if you haven't already watch my episode on why people making $200,000 are still broke make sure to check that out all right you guys remember to take control of your money and create a life you love
