Easing into personal finance is like kissing for the first time. It sounds cool, you know you want to do it, people tell you it’s awesome—and yet, you still botch it. And man does it feel weird the first time. 

Just as your fourteen year-old self practiced kissing your hand or a peach, you’re going to need some good practice and pointers to master your own personal finances. And then there’s your kissing style—yeah, I’m calling you out. You know, that one guy who somehow produces a hurricane inside his mouth and hoses your lips every time you kiss. It may seem like I’ve digressed, but I promise I have a point: everyone’s personal finances will look different to what matches their lifestyle (like your kissing style). But the underlying theme is that your personal finances can improve.

We’ve listed below some of the questions we’ve received most frequently over the years. Although we’ve kept our responses very brief, we intend to dig deeper into each question in subsequent posts. It always helps, though, to know exactly what questions you have. So if any of the questions below jump out to you, or you have a few of your own, please comment below or email us at chad@wallstreetminimalist.com and we’ll put your question at the top of our list!

So, as we jump into a list of FAQ, we want to just briefly highlight who this website is for. We won’t pretend to know or cater to old geezers who need extremely specialized finance assistance. Our experience and knowledge is perfectly suited for us younger folk. True to minimalism, we intend to keep the finance tips we provide intentionally simple but effective and thorough.

 

Will I need to spend lots of time on my personal finances?

No way! Ain’t nobody got time for that. There might be a learning curve upfront, but once we get your financial “system” working for you, you’ll spend VERY little time—10 minutes—each week checking in. Your financial system will consist of automated bank accounts that save, pay bills, and invest for you without you having to do anything. You’ll learn simple ways to earn additional income every year through credit card bonuses and conscious spending. And you’ll learn how to spend generous amounts of money on the things you love most without ever having to worry that “it’s not in the budget.” Sound too good to be true? Think there’s a trade-off? Read on! And subscribe at the end of this post so you don’t miss anything!

 

To live on a minimalist budget, won’t I have to give up tons of stuff?

Although you will be living with less, you will find that you’re happier as you spend MORE on the experiences you love. That’s right, you will be spending more on the experiences that you enjoy most. Spending isn’t a zero-sum game. Not everything you buy provides you the same personal value. For example, I really like clothes, but if you asked me if I would rather buy 30 shirts or a short vacation, I would definitely do the vacation. Why? Because those dollars to pay for vacation time are worth a lot more to me than they are for the shirts.

 

How do I figure out what makes me feel rich? What should I spend my money on?

One of the most fundamental questions that most people never ask themselves is, “what makes me feel rich?” This could literally change your life. By understanding what your definition of rich is and what experiences contribute to that feeling of being rich—like eating out at every bomb restaurant in New York, or traveling the world—you free yourself of the need to spend money on Sally’s definition of rich. Or Bob’s. If clothes don’t make you feel rich, find ways to cut back! If eating out doesn’t make you feel rich, cut back! If your definition of rich is overcoming every popular rock climbing destination in the world, truly you should be able to drop those dollar bills faster on climbing than Kanye drops his mic. Kanye out.

 

How extensive does my budgeting need to be? Will I need to track every expense?

When I was 10 and my dad first sat me down to budget, I had two things on my mind: (1) this sucks and (2) “seriously Dad, I make $5 per year.” Yet, my dad was awesome and helped me track every penny I spent on my debit card. Still to this day though, I hate budgeting in the sense that most people understand it. You know, “don’t spend money, don’t spend money, don’t spend money.” That is absolutely not the way to live your life. Instead, we want you to live like an intelligent minimalist. Learn what makes you feel rich and on what experiences you want to splurge. And then spend away! By ridding yourself of the excess crap in your life that doesn’t contribute substantially to your happiness, you will free up your “budget” for experience splurging. Definitely more to come on this question and topic soon!  

 

How do I get started with credit cards? Which one is right for me?

I absolutely love this question because the answer is unique for each person reading this. There are, of course, several cards that I could recommend to you right now. But I don’t know your current life situation—what expenses you have coming up, types of rewards you want to receive, your credit score, upcoming credit applications, etc. There are several factors you should consider before getting your first or next credit card. Personally, I’m a big credit card churner and absolutely love reading up about current card bonuses and rewards. But I recognize you may not be. Finding the right card(s) definitely has its place in your financial system, so there will definitely be an extensive post about this to come! Subscribe below for updates. Until then, email me at chad@wallstreetminimalist.com and I’d be happy to help you out personally to find your next card.

 

What is a credit score? What affects my credit score?

Your credit score is really important. Basically, credit lenders access your credit score as a relative rating to determine your creditworthiness: i.e. how likely you are to pay back debt if you were ever given a credit card, mortgage, or loan. Building your credit score into the “Excellent” or 750+ range can take time, but if you understand the levers driving your score, it’s actually really easy! Things that affect your credit score:

  1. credit utilization – how much of your available debt you are using
  2. on-time payments – what percent of your monthly payments you have made on time
  3. derogatory marks – stuff like bankruptcies, foreclosures, collections… bad stuff
  4. credit age – average length of time your open and active accounts have existed
  5. number of accounts – total of all credit account types… mortgages, loans, credit cards, etc.
  6. hard credit inquiries – performed by some institutions when soft inquiry not sufficient

I’ll break into this more in a later post. You’ll learn how to manipulate your credit score to easily move into the “Excellent” range.

 

How much should I be saving each month?

Our approach to this question is fresh and unrestricted. We believe most people can save more than 10% or even 20% of their salary. Instead of setting a percentage goal, we feel that setting a lifestyle goal is much more effective. Hannah and I have set a goal to live a $60,000 lifestyle in New York. Before you freak out and chastise us on all the money we’re going to spend LOL, do a google search for apartment rental costs in midtown. Did you do it?…….. Apartments out here are expensive, right? Ok, now that we’re on the same page hopefully, let me explain. First of all, according to one of those sketchy (and obviously super reliable) cost of living calculators I found on the interwebs, our $60,000 lifestyle would cost about $30,000 in Dallas, Texas. Clearly this calculator is wrong, but it should drive the same point home. We’re not living off of much! So, without giving you details into how much our combined yearly salary is, Hannah and I will be saving well over 20% this year. And we still get to do all the things we want to, because we understand what experiences we love most! And we’ve set aside A LOT of money every month towards these adventures. If you’re still not convinced that committing to a conservative lifestyle $ value and NOT monthly savings percentage is the best way to live, hold out a little longer. We’re pretty passionate about this principle, so you can expect a post soon that will help you realize that “finance professionals” have been doing it all wrong since forever. Seriously. You should be excited about this post to come.   

 

What’s the point of having both a savings and checking account? Which ones are best?

Savings and checking bank accounts are the backbone of your financial system, so it’s important you lock down the right ones. Having a dependable, no-fee checking account is step one. Automating the money you’re saving each month into a high-return savings account is essential. There’s something psychologically invaluable about putting money away each month into a savings account. You’re much less likely to feel the need to spend that money, and the carried interest you earn each month is celebration worthy. Which checking and savings accounts are best? More on that to come!

 

What should I be saving towards?

Travel, world-wide marathon races, mountain climbing, education, retirement. Basically anything. If you haven’t already, check out the question earlier above about determining your definition of rich: “How do I figure out what makes me feel rich? What do I spend my money on?” Everyone enjoys different experiences in life. As minimalists, we avoid saving towards things and instead try to experience everything the world has to offer. Of course, a good portion of our money goes into our retirement, but what’s the point of saving for retirement if you never enjoy the years that got you there. Save towards experiences that will make your life worth living.

 

I want to invest but I’m afraid of losing money. What do you suggest?

This is probably one of the hardest questions out there, but it’s also one of the easiest. The “finance professionals” you know have probably tried giving you bulletproof advice. Maybe they’ve convinced you that if you didn’t invest in Snapchat, you missed out on the next big thing. Or maybe they told you about that one tiny, obscure Moroccan company that’s bound to make you into a millionaire if you buy shares now. Well, I hate to break it to you, but people rarely beat the stock market consistently. This is great news for you! As an individual investor and normal person, you shouldn’t pick stocks. Instead, choose a low-cost index fund and let your savings rise naturally. An index fund is a fund that invests in a diversified portfolio of stocks across the whole market. So rather than feel the volatile swings of individual company stocks, you’ll experience a steady flow upward as the market grows. Still doubting me? Here’s two pieces of evidence for you: (1) the market has returned an average close to 10% per year since 1986 compared to the average hedge fund’s dismal 2%, and (2) Warren Buffett says you should invest this way. Ultimately, as a minimalist, we want to decrease the amount of time you have to spend selecting market indices and investing, so a post on automating this is on its way. Stay tuned and subscribe below for updates so you’re the first to know when it’s released!

 

Will this website be helpful to me?

Yes.

 

What makes your take on finance any different from the many other finance blogs out there?

The personal finance principles and automation techniques we teach are unique, simple, and effective. Too many “finance professionals” try to sell you these complex systems that are both unnecessary and impractical. They tell you you’ll need advanced budgeting programs, expensive investing services, and crappy bank accounts. And for what? A life that doesn’t allow you to enjoy what you love most. That’s where we’re different. Wall Street Minimalist will help you in three ways. First, we hope to help you discover the freedom and delight that comes from living as a minimalist. Not the minimalist who boasts about saving $10 on his phone bill, but rather the one who brags about his sweet vacations and endless city experiences. Second, we hope to show you through the personal experiences and adventures we share on our site that a minimalist budget is pretty relaxed and extremely generous where it matters most. And finally, we will help you build your automated personal finance system. The goal is to minimize the time you spend on budgeting, saving, and investing. We’ll help you put in the work upfront, so your finances will work for you to make you rich. We’ll be with you every step of the way, answering every question you have. No one else is teaching this stuff.  

 

What if I have more questions?

You’re our favorite. We could talk for days about personal finance, all in the hopes that together we can create a personal finance system for you that is automated and effective. We need your help though! Please comment with your questions below or email us at chad@wallstreetminimalist.com. We respond to every email and look forward to helping you on your way to a richer life!

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