THE CPA CHICK
Get to know Javon!
My parents had me at the young age of 16 and financial literacy was never discussed in my home. During my Junior year in high school it became very clear that I was going to be the first in my family to attend college so I had to figure out how to pay for college.
I know how it feels wanting to be financially free but having no clue where to begin, and that’s why I created The CPA Chick. My goal is to help you learn about financial literacy and break the cycle of living paycheck to paycheck so that you can live free and be able to afford the things you love to do.
I've been in charge of my financial journey since high school and I'm extremely passionate about financial literacy. The CPA Chick started in 2019 after I made a post on twitter about me closing on my third multifamily unit. I got tons of questions asking me how they could follow in my footsteps. I decided to create a brand that would help educate those around me about financial literacy.
7 Steps to Financial Freedom:
1. Set Attainable Financial Goals
If you’re not currently disciplined when it comes to your finances, setting goals that are unrealistic is an express train failure. But if you set realistic goals they will help guide you even when things appear to be tough. When critical financial decisions need to be made, your goals can help you focus on what’s important.
For your goals to be effective, they need to be personal. Right now, one of my goals is to travel more often. I’m able to do this by ensuring that I have an attainable financial goal. I set up a “Travel Savings Account”. Every Friday I have $50 automatically drafted from my checking account to my savings account. By the end of the year I’ll have $2,600.
One of your financial goals could be to pay down student loans or credit card debts. You could use the method mentioned above and by the end of the year you’ll have $2,600 to put towards credit card, student loan, or any debt/expense of your choice.
If you don’t have any debt, the $2,600 can be used to start your emergency fund. An emergency fund is a readily available source of assets(cash) to help individuals navigate financial dilemmas such as the loss of a job, unexpected illness, or a major repair to your home or car.
2. Track Your Spending
When I first started my journey to Financial Freedom I tracked every penny I spent. This allowed me to save money to buy my first home. Shortly after the purchase of my home I stopped tracking every penny because I felt I was disciplined enough to keep track of my finances without reviewing my expenses every month. I was advising people to track their expenses, yet I wasn’t following my own advice.
I regretted that decision to stop tracking my finances so I vowed to start tracking them again. I’m glad I did. I was able to see some trouble spots. Shopping and self-care expenses were triple the amount I budgeted for! I quickly made the corrections. It doesn’t matter how you track your expenses, the most important thing is that you do it. You can use free apps from app stores or a notebook. Whichever method you choose, just be sure to stick with it!
3. Budget! Budget! Budget!
Once you’ve been tracking your expenses for a few months, use the data you’ve collected to develop a monthly budget. Personal budgets are used for managing an individual’s or a family’s finances over a short or long period of time. The internet and app stores are filled with budgeting sheets and apps to help you budget your finances for free.
Personally, I use the budget templates found in excel because I can arrange the template to fit my specific needs. Below is a beginners budget worksheet. Please find the budget sheet that works best for you.
****insert tab that leads to budget worksheet on resource page****
Spend less than you earn! Even if you do nothing else on this list, spending less than you earn will put you ahead of your peers.
4. Lower your monthly bills
At least once a year, you should review contracts and agreements with your service providers. Please read the contracts/service agreements to make sure everything matches your current needs.
Ask for lower rates - If you currently have cards with high interest rates that you’ve had for quite some time call to ask about lowering the rate. Companies value loyal customers and often times they will reduce their rates. All you have to do is ask!
Inquire about bundle deals - Most companies currently offer bundle deals that aide consumers in saving. But, be careful. Most companies that offer bundles deals want to keep you under contract.
Read the fine print - Early terminations of contracts tend to come at hefty cost.
5. Start an emergency fund
For years I lived paycheck to paycheck. When an emergency would arise, such as a car repair, I would be forced to choose between paying my rent on time or repairing my car. Of course I would choose to repair the car because I had to get to work to make money. But since I chose repairing my car this meant my rent would be late. When you pay your rent late you’ll be charged a late payment fee. The late payment fee is an additional expense you didn’t have money for in the first place so now you need to take money from elsewhere and then something else will be late. Now you’re staring at another bill with yet another late fee in this never ending cycle because an unexpected car repair happened.
I thought there was no way out until I was able to build an emergency fund to account for unexpected expenses. Unexpected expenses can be car repairs, medical expenses, or even evacuation expenses if you live in a city below sea level. LOL
Start out with an attainable goal. In step one I mentioned how I put $50 a week into a savings account for my traveling expenses. There are 52 weeks in a year. If you were to put $50 in a savings account a week, in one year you would have $2600!
Now that $500 car repair isn’t so bad because you have already prepared for the expense. No more falling behind on bills and incurring late fees!
6. Get out of Debt
Are you struggling under a heavy debt load of student loans or credit cards? You should make it a priority to lower some of these burdens before you make big ticket purchases, such as a home.
There are two ways I suggest you pay off debt. The first method is to pay off the debt with the highest interest rate first. For instance, if you have credit cards/debts that have interest rates of 24.49%, 17.99%, and 28.99% you should start paying off the credit card/debt with the 28.99% rate first. The idea here is that the 28.99% rate is costing you the most money so you would need to get rid of it first because it’s costing you the most money.
The second method is called the debt snowball method. Pay your debts starting with the smallest method first.
1. Order your debts from lowest balance to highest balance.
2. Designate a certain amount of money to pay toward debts each month.
3. Pay the minimum payment on all debts except the one with the lowest balance.
4. Throw every other penny at the debt with the lowest balance.
5. When that debt is gone, do not alter the monthly amount used to pay debts, but throw all you can at the debt with the next lowest balance.
The debt snowball can give you awesome psychological payoffs, keeping you motivated to stay in the game. It's not mathematically ideal, but it will definitely help boost your confidence!
7. Earn Extra Money
You can meet a lot of your financial goals by reducing your spending and using the right savings tools. But nothing speeds up your progress like a boost in income. There are several ways to earn extra money. Asking for a raise, a second job, switching jobs, selling things, and side hustles.
Personally, the way I prefer to earn extra money is by having passive income. I realized that my job and my side hustle were very time consuming but it's what I love to do so at the moment I’m keeping them both.
Since I don’t have much free time I’ve invested money into acquiring rental property. My thought process is that people will always need somewhere to stay. Although having tenants creates wear and tear on the property, the work to fix the property can be outsourced to a contractors, electricians, plumbers, and etc. Thus, the only thing I need to do is collect the rent, set up appointments for the repairs/maintenance, and pay for the repairs/maintenance.
I’m able to do all those things with minimal time being taken away from my regular job and side hustle.
Set Attainable Financial Goals
Track Your Spending
Budget! Budget! Budget!
Passive Income Streams
When I first started my career I had two bachelor's degrees but I was making $10/hr working as a bank teller! I knew early on that having multiple streams of income would be the only way to efficiently and effectively get ahead in life. I set a plan into motion. Step 1: Get a better paying job. Step 2: Obtain my CPA license. Step 3: Create multiple revenue streams!
There are other ways to increase your monthly income. Such as getting a second job, selling items in your home you no longer need/use, and turning you hobbies into a side hustle.
Personally, I prefer passive income. Passive income can be earnings derived from a rental property, limited partnership or other enterprise in which a person is not actively involved. By choosing the right type of passive income, you can invest your time the way that you want to. Consider it a way of buying back your time.
Below are some legit ways to make money while you sleep:
1. Invest in Real Estate
Real Estate can be a great way to my money while you sleep. Look at it this way, individuals will always need a place to stay or locations to run their businesses. I decided to buy residential rental. If residential rental isn’t for you try crowdfunded real estate instead. I came across a company called “Fundraise”. With only $500 you can get started and invest in more than 48 real estate products.
2. Dividend Income
Dividend income refers to any distribution of a company's earnings to shareholders from stocks or mutual funds you own. If you are going to go this route, make sure that you educate yourself and pick solid stocks you can depend on for dividend income for years to come.
3. Rent out space in your home/Airbnb
Do you have an extra room in your home that you rarely use? Why not rent it out to someone looking for short-term rental on Airbnb. Millions of people use Airbnb to find a place to stay instead of staying at a hotel. You can hire a maid service to clean and prep the room before and after a guest leaves. If you hire a property management company, then this will eliminate work on your end and make it truly passive income.
4. Sell products on amazon/ebay
Millions of consumers shop on amazon and ebay daily. Do you have items lying around your home that are in good shape that you don’t use? Sell them and make some money!
5. Buy vending machines
A successful vending machine business can be a great way to make passive income. The key is to find the right places to install your vending machines. Check with local businesses, companies, and agencies that have tons of workers in their buildings on a daily basis and see if they need vending machines. Be sure to ask the workers what items they prefer to have in the vending machine and then stock accordingly. If you want to reduce the amount of time that you are involved, consider hiring someone to stock the machines for you.
6. Create a useful mobile app
Do you have a unique idea for an app you believe people could benefit from? Every app on your phone is making money for somebody, somewhere. This could be you!
7. Buy a laundromat
Personally, I’ve toyed with this idea for months lately and I think I’m going to give it a go if find one that’s already for sale. All you would need to do is hire someone to manage the day-to-day operation, then you can “soak up” all the profits. My reasoning for buying an existing laundromat is that the startup costs are pretty high. Commercial washers and dryers are not cheap! It makes sense financially to buy an already established laundromat rather than starting one from scratch.
8. Event/Party Rentals
Millions of people are looking to rent a variety of items everyday or occasional use.
Products you could rent out:
-Chairs and Tables
-Table Clothes; Chair Covers
All you need to do is find something that will fill the need of a potential consumer. Just make sure that you have a proper rental agreement signed by both parties. Also, get paid in cash beforehand, and get a current photo ID and secondary proof of address from renters. Lastly, always request a security deposit.
As you can see there are tons of ways to make passive income. Hopefully, one of these passive income streams inspires you to start making money while you sleep. Let’s get those passive income streams started!!!!
Start Your Journey
TO FINANCIAL FREEDOM
Can you imagine what would happen if you found extra money in your monthly budget? Could you build an emergency fund? Would you finally take that vacation you’ve been dreaming about for years?
This guide can help you learn to save money on and everyday or even a monthly expenses. It could also help you set funds aside for the future.
The first thing you need to do is get serious about your budget. I would recommend the 50/30/20 budget for smart money management. Devote 50% of your income to necessities, 30% to wants and 20% to savings. This means if you make $1,000 per paycheck $500 would be for things like bills, $300 would be for things such as entertainment, and $200 would go to your
Money Savings Tips
Simple tweaks to your can help you save money over time. Below are a few things I used to get myself on track when I first started my journey to financial freedom!
1. Use an automated savings tool: Find and app or a bank account that does the saving for you. Digit and Qapital both automatically transfer small amounts from your checking account to a separate savings account. All you have to do is sign up an the app will do the savings work for you.
2. This may be extreme but trust me it works! I suggest that you open a bank account at a small bank that not located everywhere. Possibly a credit union.
a. Open the account and DO NOT get a debit card for the account
b. Set up automatic drafts from the account your paycheck goes to and have say $50 a week go into the account at the credit union If you don’t have a card it makes it harder for you to roll up to an ATM and to get money. In order to get money from the account you would have to physically go to the bank to make a withdrawal! I hate to admit it but we’ve become too lazy to do things in person.
Also, banking hours tend to coincide with normal work hours. Usually, by the time we get off work for the day banks are usually closed. So now you can’t get the money anyway. So in short, make it to where getting the money would be an inconvenience for you and I guarantee you won’t ever touch that account unless it’s absolutely necessary!
3. Take manual savings actions: Currently I have a few friends participating in the $5 challenge. This means every $5 bill they come in contact with they put it aside in a savings jar. At the end of the year they count the money. One of my friends had over $2,000 worth of $5 bills!
4. Restrict online shopping: I often fall into the online shopping hole. When I feel like I’m spending too much money I leave my cards at home. One thing that helps me not purchase when I get to the checkout screens is not having my cards. But the most important thing is I NEVER fall into the "save your information for faster checkout” trick. I’ll have a basket full of items with no cards saved on file so this means I can’t buy anything. LOL!
5. Set savings goals: Think about why you’re saving. Are you saving to buy a home? A car? To take a vacation? Keep that goal in mind and it’ll help you stay motivated and focused. Remember to set specific and REALISTIC goals. If all else fails, always remember to spend LESS than what you earn per paycheck!
A lot of people want to know how I’ve been able to build what I have so far, the simple answer is that I started taking my finances seriously when I began budgeting in college. I’ll be honest, tracking my expenses and consistently sticking to a budget was very challenging at first. I was tired of living paycheck to paycheck and hoping that a financial emergency wouldn’t come up that would stress me even more financially.
The essence of a budget is telling your money where to go, but the HOW is up to you. Focus on the strategies that will work best for you and your individual financial situation when approaching how to budget. But first, you’ll need to understand the relationship between your income, your fixed expenses, and your variable expenses.
- INCOME (the money you bring in monthly AFTER taxes)
- FIXED EXPENSES (same amount every month like rent or recurring bills)
- VARIABLE EXPENSES (vary based on your lifestyle like a food budget, self care)
- REMAINDER (money left over after expenses are paid. Can be used to save, pay debt, etc.)
Below are some tactics I used when I first started budgeting:
1. Make a budget for every month BEFORE the month begins
In order to get ahead in life you need to think ahead. You need a new budget each month and you should set that up before each month begins. I advise you to create a new budget every month because you may have a unique event, such as a birthday coming up that you’ll need to work into your monthly budget.
I started out with using budgeting templates from excel. The templates are generic so please redo the expense categories to account for your specific expenses.
2. Set realistic budget goals
If you have 5 people living in your household $200/month for groceries isn’t realistic. Personally, I have a $50 a week budget for groceries and I only have one mouth to feed.
3. Track EVERY expense
Tracking every expense allows you to see where your money is going. Once this is done, you can start telling your money where to go. If you need assistance with tracking your expenses there are tons of free apps in the app store. A few of my faves are Nerd Waller, Acorns, and You need a budget.
4. Make adjustments
While we’re in the habit of tracking our expenses this will allow us to identify expenses we can cut. If you spend $5 a day at Starbucks that's $25 a week. $100 a month! Do you know what you can do with an extra $100. Personally, I would buy a coffee pot and other ingredients needed. Then I would put my “Starbucks Savings” into other areas of the budget. Such as a miscellaneous account to catch misc expenses like a birthday gift for a friend or etc.
5. Include “fun" in your budget
Another useful tool that helped me was actually including a “fun” category into my expenses. If you’re a faithful happy hour goer it makes sense to have a category for happy hours in your budget! It could also help you to limit your “fun” expenses to exactly what you have in the budget and not spend a penny more!
6. Budget to “0”
Always budget to zero. When you’re done with your budget for the month and notice that you have extra money put it into your savings account! DO NOT put the extra money in your “fun” budget! Putting extra money in your savings account will help you purchase those big ticket items you’ve been saving for sooner rather than later.
You will make mistakes. We all do. it generally takes three months before you get the hang of this budgeting thing, so be kind to yourself—at the start and throughout your new budgeting lifestyle. Because that’s what this budgeting stuff is....a lifestyle.