Money Hack of the Week: Automate savings and investments

• Did you know most millionaires automate savings and investments?

• Did you know you can set up multiple direct deposit accounts with your employer to “force savings” for yourself?

• You can also have multiple savings accounts with companies like ally bank and set up automatic transfers on a weekly/monthly basis 

Main Topic

• Getting out of debt!  

• 1st - need to analyze how we got here in the 1st place

• Can you increase your income?  

  • Look for opportunities to grow inside your organization - or if you’re a business owner, are there additional products/services you can offer to increase your cash flow? 

• Monthly budget is key - need to free up $$ to be able to live below your means.

  • Consider a side gig - temporarily to help you get out of debt

    • Drive for uber, make arts and crafts, shop for instacart, do doordash.  Do something that will generate a little extra money if you’re unable to come up with extra money within your monthly budget.

Other things to note:

• Debt consolidation (personal loan to decrease credit card debt)

• Credit card transfers

• 2 main concepts to getting out of debt: Debt snowball, debt avalanche

Here's how the Debt Snowball works:

1.    List Your Debts: Begin by making a comprehensive list of all your debts, including credit cards, personal loans, student loans, and any other outstanding balances. Arrange them from the smallest balance to the largest.

2.    Minimum Payments: Continue making minimum payments on all your debts to avoid penalties and late fees.

3.    Focus on the Smallest Debt: Allocate any extra money or funds you can towards the smallest debt on your list while maintaining minimum payments on the others.

4.    Pay Off Smallest Debt: Once you've paid off the smallest debt, celebrate this accomplishment! The key to the Debt Snowball method is the psychological boost you get from achieving these small victories.

5.    Roll Over Payments: Now that the smallest debt is paid off, take the money you were using to pay it off and add it to the minimum payment of the next smallest debt on your list.

6.    Repeat and Build Momentum: Continue this process, "snowballing" your payments from one debt to the next as each one is paid off. As you progress, your ability to pay off larger debts increases, creating a momentum that keeps you motivated throughout the debt repayment journey.

The Debt Snowball method emphasizes the importance of behavior and motivation in paying

off debt. While it may not be the most mathematically optimal strategy in terms

of interest savings (compared to the Debt Avalanche method), its psychological

benefits can be highly effective in helping individuals stay committed and focused on their debt repayment goals.

Here's how the Debt Avalanche works:

1.    List Your Debts: Start by making a list of all your debts, including credit cards, personal loans, student loans, and any other outstanding balances. Arrange them from the highest interest rate to the lowest.

2.    Minimum Payments: As with any debt repayment plan, continue making minimum payments on all your debts to avoid penalties and late fees.

3.    Focus on the Highest Interest Debt: Allocate any extra money or funds you can towards the debt with the highest interest rate while maintaining minimum payments on the others.

4.    Pay Off Highest Interest Debt: Once you've paid off the debt with the highest interest rate, take the money you were using to pay it off and add it to the minimum payment of the next debt on your list with the next highest interest rate.

5.    Repeat and Save on Interest: Continue this process, "avalanching" your payments from one debt to the next based on their interest rates. By targeting the high-interest debts first, you reduce the overall amount of interest you'll pay over time.

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