Smart & Simple Financial Goals with Nicole Lapin
"You cannot deprive yourself into wealth."
Do you need a reboot for your finance in the new year?
“Keep it simple!” is a friendly reminder from my long time friend and dynamic guest for today’s show, Nicole Lapin. Nicole is a multiple New York Times bestselling author, and she is here to share her expertise on wealth and finances.
She is currently the host of the CW’s business reality competition show, “Hatched,” and contributes regular financial reports to Dr. Oz, Good Morning America, and The Steve Harvey Show.
In this episode, Nicole impresses upon us to be realistic with our financial goals and boundaries. As someone who struggled financially and empowered herself to financial freedom, she knows what it takes to get the job done, and it’s much more simple than we think.
Nicole offers some simple tools for getting our finances on track, including her “three E’s” — essentials, end game, and extras — her fail-safe plan for achieving the financial goals and life we desire.
THE ROAD TO RECOVERY
- The first step is admitting that you have a problem.
- We all have problems. The only problem you can’t fix is the one you ignore.
- Many people are afraid of the numbers or math that comes with getting their financial lives together.
- The numbers are easy, the emotional work that comes with it is what makes it seem so hard. It’s what Nicole calls “the enemy between our ears” or “the mean girl or guy” that we have to tell to sit down and be quiet.
- In school, we learn the Pythagorean Theorem and how to dissect a frog, but we do not learn how to do a budget, taxes, or business plan. It’s unfortunate but that’s still no excuse for burying our head in the sand.
- Nicole shares that she grew up in an immigrant family and broken home without any knowledge of finance or the industry as a whole.
- She made a conscious decision to improve her circumstances. A great place to start for achieving your financial goals is breaking them down into baby steps.
- Anything intimidating broken down into baby steps is much easier to tackle.
- First, come up with a basic spending plan.
- Think about a financial diet in the same way you would think about a regular diet, in the sense that you allow yourself small indulgences so you don’t end up binge eating later.
- While other financial advisors tell you not to buy that morning latte, Nicole argues for it.
- You cannot deprive yourself into wealth. Rather, if you allow yourself to come up with a spending plan the same way you would come up with an eating plan, you won’t find yourself on a crash diet.
- Using a method that deprives you of the things you enjoy is not sustainable. Give yourself the equivalent of a financial Hershey’s Kiss and then put it into your budget.
- Putting those small allowances in your budget is actually a great way to keep you motivated.
“THE THREE E’s”
- Essentials. End Game. Extras.
- Essentials are allotted 70% of your income and include everything that you need to live (i.e. housing, food, transportation).
- End game is allotted 15% of your income and represents your future self and planning. (i.e. retirement, savings)
- You have to put on your oxygen mask before you can help others.
- For example, it does not help your children to save for their education before your retirement if you will end up sleeping on their couch.
- Extras are allotted 15% of your income and allow you the freedom to indulge without going overboard.
- These are general guidelines that you want to follow; there can be a little bit of flexibility, but keep the extras at no more than 15%. (It’s nice to have extra money there when you need it.)
- When the fun (extra) money is out, the party is over.
- Have good self-awareness for where your shortcomings are and prepare for those.
- For instance, instead of taking your debit card out with you to have fun, take out your extra money in cash so you don’t risk going over your budget.
- Self-awareness is a superpower.
- Many people say they want a million dollars but have no idea what they want or need that money for.
- First, figure out the life you want then reverse engineer to figure out how to get the money you need to live the life you want.
- A great way to identify your personal goals is by separating them into three, sometimes four, F’s.
- Family, Finance, Fun, and Fitness
- Then break down those goals into increments of 1,3,5,7,10 years because it becomes much more manageable.
- Nicole remembers feeling anxious when someone would ask her where she wanted to be in life in 10 years. Breaking it down in increments removes that pressure and makes it easier to answer the question.
- Studies have shown that people who have a cohesive narrative for their life are more likely to be successful. So, it’s important to be able to actually answer the question of where you see yourself later in life.
- Whether you want 10 kids or 10 cats, you need to account and plan for it.
- Once you identify your life goals with the three F-words, you can reverse engineer the plan for getting the money you need to serve the life you want. Maybe you will need a million dollars, but maybe you won’t need that much.
THE POWER OF RESPONSIBILITY
- Taking personal responsibility for any area of your life gives you the power to begin to change it.
- Stan Lee said, “With great power comes great responsibility, and with great responsibility comes great power.”
- Money is a language, like anything else. Nicole wants to make sure that people are not intimidated by the conversions surrounding money. Once you can speak the language, it does not feel as intimidating.
- Don’t be hard on yourself. It makes sense that you don’t understand everything when you are first learning a new language, it will get easier and you can become fluent if you stick with it.
SHARE WITH US
- Take a screenshot of this episode, tag us on social media (@NicoleLapin & @JimKwik) and share your greatest “aha!” moment from this episode with us.
- Remember to “Keep it simple!” Don’t stress about finances, it is not as complicated as you may think. Be intentional.
- For more from Nicole, check out her website.
- Get Nicole’s books or courses, here.
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