Money Moves Mondays: How I Turned $5 Into Hundreds of Dollars!
So I am a HUGE advocate for the economic advancement of women, because as we all know…
"FIRST YOU GET THE MONEY.
THEN YOU GET THE MUTHAFUCKIN' POWER.
AFTER YOU GET THE FUCKIN' POWER MUTHAFUCKERS WILL RESPECT YOU."
- The Lox ft. Lil' Kim
I mean we all know respect should just be a given when you meet anyone, buuuut we also all know that people can just be trash sometimes.
In any case, it’s really important to me that as we strut into the new unapologetic age of women that we are also financially educated and liberated as well.
After reading Rich Woman by Kim Kiosaki, I was appalled to learn...
Rich Woman: A Book on Investing for Women, Take Charge Of Your Money, Take Charge Of Your Life
- 90% OF ALL WOMEN IN THE US WILL HAVE SOLE RESPONSIBILITY FOR THEIR FINANCES WITHIN THEIR LIFETIMES... YET 79% OF ALL WOMEN HAVE NOT PLANNED FOR THIS (Rich Woman).
- ACCORDING TO A SURVEY DONE BY CNN MONEY IN 2017...
* Fewer women (by 10 percentage points) said they have an emergency fund to cover their bills for a few months if they lost their job.
* About 30% of women said they're spending more than they earn each month compared to 19% of men.
Ever since learning about these crazy stats, I knew I wanted to be part of the voices that help change this all too common narrative for women.
So for this week, I wanted to share with you my $5 savings hack that has saved me a good $300-$500 a year!
So I got this hack courtesy of my amazing eyelash woman, Linda. She was telling me one day that she started this new thing where any time she got a $5 bill back, she would put it away in a savings container.
I thought it was pretty simple enough, so two years ago I started putting away every $5 bill I ever got in a little special wallet that I kept hidden from myself.
My rule was that from January 1st to whenever I got home for Christmas (which was usually on Christmas day), if I got handed a $5 bill I would put it away in my special wallet.
But that between Dec. 25th to the first, I would split my final total in half, and use one half as fun, spending money, and I would invest the other half into my future.
The first year I did this hack I managed to save $500!
I took $250 of that money, and I invested it in an IRA account.
IRA stands for "Individual Retirement Account", and is an investment option for those looking to save for retirement.
A 401k is essentially like an IRA, but it is employer sponsored. That means that you can only get one through your employer. The biggest benefit to getting a 401k is that many companies have a matching program, where the company will match a certain percentage of money that you put into your account. So it's basically free money the company is giving you to save for your future.
When you think about methods of investing (which I know can sound like a scary word to some), it’s one of the more basic and conservative forms of investing there is. I won’t get into too much detail for now, but if you would like me to go more in depth in the future, please let me know!
This year, I was using less cash, so I only managed to save $300, which isn't bad.
But instead of investing $150 into my IRA, I decided to invest that money into Yes Queen.
People will probably have their opinions about that choice, but for me, since I already save a regular amount to my IRA monthly, and I know that I want to turn Yes Queen into a business in the future, I felt that investing the money in Yes Queen now would give me sooner access to a return on my investment than putting it in my IRA would.
As we start to learn more about investing, and how to let it best serve us, one of the things you'll have to keep in mind is return on investment (ROI) and liquidity.
Whenever we invest in something, we want to calculate the ROI so that we know how long it will take for our investment to become profitable (ie. make us money).
As well as keeping in mind how "liquid" or cash available our investment is. So if we get into a rough patch, and need cash immediately, how easy would it be to get money from our investment right away.
Since I'm pretty young, I can afford to take on a little more risk and invest my money in things like businesses and stocks, because I still have enough working years left in me to recoup any losses.
But even then, any of the best investors will tell you that diversification (ie. not putting all your money in one option) is your best friend.
So I hope you take advantage of the $5 savings hack, but I definitely encourage you to at least put some of that money towards investing in your future.