Getting Good with Money Summary

Money struggles don’t have to define your life. You can create financial freedom with simple, practical strategies and a willingness to change.

1. Understand Your Money Personality

Financial troubles often stem from behavior, not numbers. Jessi Fearon identifies four types of money struggle personalities: Floaters, Daredevils, Spenders, and Avoiders. Recognizing which category you fall into is the first step to overcoming these challenges.

Floaters live paycheck-to-paycheck, feeling stuck in a financial loop. They often give up on setting goals because progress seems impossible. Daredevils, on the other hand, live without savings, relying on credit to make major purchases, which keeps them vulnerable. Spenders justify buying as “deals” but consistently overspend. Avoiders feel overwhelmed by long-term goals like retirement or paying off student loans, leading to burnout.

Changing financial behavior starts with self-awareness. For example, Floaters should focus on consistent budgeting, identifying areas to save. Daredevils can benefit from building a safety net savings account to avoid living on credit. Spenders need to understand their spending triggers and set limits. Avoiders should simplify their priorities and make an actionable plan for their financial future.

Examples

• A Floater might start tracking every expense to identify unnecessary spending.
• A Daredevil could commit to saving a set amount from each paycheck for emergencies.
• A Spender might set personal rules like a 24-hour waiting period before making big purchases.

2. Create a Quick-Start Budget

Budgeting doesn't have to be overwhelming. Fearon’s quick-start method simplifies the process, focusing on short-term planning and zero-balancing your account.

The process starts with your current checking account balance. Subtract all bills due before your next paycheck, and allocate the remaining funds into categories like groceries, entertainment, and savings. The aim is to account for every dollar so your balance hits zero, ensuring every penny is used intentionally.

Doing this regularly fosters crucial money habits. It makes people more aware of income versus expenses, which helps them take control of their finances. Though traditional budgeting advice emphasizes monthly savings, Fearon suggests addressing immediate bills first without fixating on savings goals during tough times.

Examples

• Allocate $300 for groceries and stick to it by creating a specific shopping list.
• Use the quick-start budget to ensure funds are set aside for utilities before discretionary items.
• Check account balances weekly to adjust spending based on what’s left.

3. Build an Emergency Fund

Life is full of curveballs, and an emergency fund acts as a financial lifeboat. Fearon recommends saving enough to cover six months of essential expenses.

Start small and work up to your goal. For instance, calculate your monthly essentials – rent, food, utilities – and multiply by six. This might feel daunting, but moving step by step makes it easier. Avoid dipping into this fund for non-emergencies; its purpose is to safeguard against unexpected situations.

Although saving might slow debt repayments, it prevents falling back into debt during a crisis. Emergencies like medical bills, car repairs, or job loss can derail finances, but having this buffer offers peace of mind while working toward financial independence.

Examples

• Begin with a goal of saving $1,000 as a starting point for your fund.
• Automatically transfer a portion of each paycheck into a separate emergency account.
• Reassess your budget every few months to increase contributions toward the fund.

4. Tackle Debt Strategically

Debt can feel overwhelming, but with a clear plan, it’s manageable. Fearon outlines two main strategies: the snowball and avalanche methods.

The snowball method involves paying off smaller debts first. Success boosts motivation, propelling people to continue their progress. On the other hand, the avalanche method targets debts with the highest interest rates first, saving money in the long run. Both approaches require consistent budgeting to ensure minimum payments, followed by allocating extra funds for additional payments.

No matter the plan, the golden rule is simple: stop adding new debt. Shelve credit cards and avoid taking loans during repayment. Resolving debt takes discipline, but small victories lead to permanent financial control.

Examples

• Use the snowball method to clear a $500 credit card balance before larger debts.
• Choose the avalanche method to reduce a student loan with an 8% interest rate.
• Dedicate every tax refund or bonus toward your repayment plan.

5. Mortgage Repayment Isn’t Just About Low Rates

Many assume a low-interest mortgage isn’t worrisome. However, the Total Interest Percentage (TIP) reveals how much you truly pay over time.

Consider a 30-year, $300,000 mortgage at 4% interest. Over three decades, you could pay over $200,000 in interest alone, raising the total cost. This motivates many to pay off their mortgage faster. Use amortization tables or calculators to determine how extra payments impact the loan duration and total cost.

Higher monthly payments lead to shorter loans and long-term savings. Even small changes, like sending an extra $100 toward the principal, can shave years off the repayment schedule, freeing up resources for other goals.

Examples

• Use an amortization calculator to see the savings from paying your mortgage in 20 years instead of 30.
• Contact your lender to confirm no penalties for early repayment.
• Commit to applying bonuses or extra income toward the principal balance.

6. Stretch Your Budget with Small Adjustments

Finding extra room in your budget requires creativity and persistence. Trimming unnecessary expenses and boosting income helps achieve financial goals more quickly.

Start with everyday costs like groceries. Cooking at home saves more than ordering takeout. Prioritize shopping with a list to avoid impulse buys. Next, examine subscriptions or memberships that aren’t used often and consider canceling them.

Increasing income is another option. Job changes, side hustles, or selling unused possessions can contribute extra funds. Negotiating household bills, like internet or electricity, might lead to surprising discounts.

Examples

• Save money by meal prepping instead of eating out multiple times a week.
• Sell clothing or electronics you no longer use through online marketplaces.
• Call your utilities providers to negotiate reduced monthly rates.

7. Commit to Behavior Change for Long-Term Freedom

Financial success is about habits, not just numbers. Fearon emphasizes that managing money is 20% math and 80% behavior.

Recognizing harmful tendencies, like impulse spending or avoiding budgets, helps redefine your relationship with money. Making consistent small adjustments over time leads to remarkable results. For instance, cutting back on non-essentials or celebrating milestones helps build financial confidence.

Approaching finances as a step-by-step process keeps burnout at bay. It’s not about perfection but about continuous improvement and loving the life you’re building.

Examples

• Pick one habit, like tracking expenses weekly, and stick to it for three months.
• Reward yourself when you hit financial milestones, like paying off a car loan.
• Replace browsing online shops with enriching hobbies like reading or workouts.

8. Prioritize What Matters Most

Fearon encourages aligning your spending with your core values. Reflect on what truly matters and aim to reduce spending in areas that don’t bring joy.

This might mean downsizing to a smaller home or switching a fancy car for something basic. Redirect those savings toward meaningful goals, like retirement or travel. Aligning money with values inspires a sense of control and satisfaction.

Examples

• Cancel unused subscriptions and reallocate funds toward a family vacation.
• Replace pricey outings with free activities like hiking or park visits.
• Plan purchases by asking, "Does this align with my goals?"

9. Start Small to Build Momentum

Success with money doesn’t happen overnight. Focus on quick wins to power through longer financial journeys.

Small steps like saving $10 weekly or paying off a minor debt builds confidence. Gradually increase these efforts over months. Even slow progress, when consistent, compounds into significant change. Celebrate each milestone as a sign you’re heading in the right direction.

Examples

• Begin saving with coffee money by brewing at home instead of buying daily café drinks.
• Apply any extra change toward debt repayment, no matter how small.
• Mark milestones on a financial calendar to stay motivated.

Takeaways

1. Create a personalized budget using the quick-start method and visit it weekly to feel in control of your cash flow.
2. Start an emergency fund, even if it's just $100, and add to it consistently over time for peace of mind.
3. Evaluate your lifestyle expenses and align spending with your long-term goals, cutting unnecessary costs to save more.