Stuck inside due to Coronavirus quarantine? Tired of Netflix binges and scrolling through your Instagram? What a great time to learn something new, perhaps something like how to manage your money, eh? Perhaps something about this “financial independence” nonsense that Clo Bare has been talking about for a few years now.
Eh? Eh? Nudge, nudge?
Why not, right?
Suddenly all the things I’d been wishing for the last year happened– I moved out into my own space (YAY!), got some time to myself, stopped spending money on entertainment because of lockdown, and my social time has been limited since, well, COVID19 stepped into our lives and sent us all home.
That’s kind of the silver lining. We all have the gift of time now.
2020 came in fast and suddenly we have the opportunity to work on the things we’ve been putting off.
We have time to relax and take care of ourselves and we have time to learn new things, like personal finance and how to manage your money. Now’s the time my friends.
To aid you in your learning, I pulled a list of resources that launched me into action and started me on the path to handling my finances. These are books and blogs that I actually read and convinced me to get started on my debt repayment/debt-free by thirty-three plan.
Read Clo Bare’s Debt-Free by Thirty-Three Plan here.
Before we dive in, let me define a few things.
In this post you’ll see me refer to “FI” and “FIRE” a lot. FI stands for financial independence and FIRE stands for financial independence, retire early. There’s a whole movement on FIRE and FI, and most of these blogs are from people who have achieved FIRE.
In a nutshell, FI and FIRE are both about bumping your savings rate up to 50%, 60%, 70% or more so that you can retire early and pursue your true passions. Or sit at home and eat Oreos. Whatever your jam is.
The “RE” part of FIRE differs greatly for each FIRE journeyer. Some people want to “retire early” so they can start their own business (me) and some people don’t want to retire early at all, which is why they pursue FI, and not FIRE.
Anyway, that’s the nutshell. I’ll write a much longer piece about FI and FIRE and link to it here in the future.
But for now? We’re talking about resources just to get you started on managing your money! I reference FIRE folks because I truly believe the FIRE approach offers tons of valuable skills and lessons, even if you’re not trying to save 50% or more.
Sound good? Good. Let’s do this.
So without further ado, five resources arranged by category to help you learn how to manage your money. Best part? They’re all FREEEEEEE!
1. Debt Repayment and How to Manage Your Money 101: Dave Ramsey
Alright, if you’re a seasoned vet in the FIRE world you just rolled your eyes, didn’t you?
Dave Ramsey gets a lot of flack for being anti-debt which is not conducive to buying a house with a mortgage or working in real estate flipping homes for a profit or even being a landlord. He’s anti-credit cards, which is a sin in the financial independence world because TRAVEL REWARDS! Free money!
In line with his anti-credit and anti-debt approach, he prefers cash above all else and suggests using a snowball method to pay off debt, which focuses on choosing the smallest debt, paying it off and then using that money to tackle the next smallest debt.
My Experience with the Snowball Method
I used the snowball method because I didn’t have any high-interest loans when I first got started, although, my car debt is what I tackled first. That loan interest rate was a little bit lower than my student loans at the time, but I wanted the psychological benefits of paying that shit off.
Student loan payoffs would take YEARS to pay off, so I wanted that quick win of paying off my car in less than a year from when I started budgeting. Smartest move according to math? No. Smartest move according to my psychology makeup and need for motivation and quick payoffs in order to stay the course? Yes.
Snowball debt plan is controversial advice, especially if your smallest debt is at a 20% interest rate, but supporters of the snowball effect believe the psychological benefits of the snowball debt motivates people to keep going. Fair points on both sides of that argument.
People also think he’s crazy for suggesting people pay off their home early even if their interest rate is 4% since that money could be better used to invest in the stock market which generally returns about 7% yearly. Again, fair points, but it all depends on the individual ’cause personal finance is… drumroll, please… personal.
Dave Ramsey: Gateway Drug to Managing Your Money
There are lots of reasons to hate on Dave Ramsey, and most are fair points. But when it comes to debt repayment, he’s the dude. He’s helped millions of people get out of debt in unbelievably short periods of time, and he’s kind of like the gateway drug to getting into all other areas of personal finance.
I suggest using some of Ramsey’s methods to start a budget and get out of debt, but not all. I’ll talk more about that in a minute.
Why do I recommend him? Because Dave Ramsey was the first introduction to personal finance and budgeting I ever received. My parents used Dave Ramsey when I was a kid, and when I graduated high school, my mom gave me “The Total Money Makeover” by Ramsey. I didn’t read the book (still have it unread on my shelf– photo evidence below) but I DID eventually start using the envelope method to budget my $14 an hour job after college. And maybe I’ll read it someday.
Read more about how I managed money in college (and after) in “I’m $67k in Debt”.
The Famous Envelope Method
The envelope method is one of the most basic methods of budgeting pretty much ever. Basically, you label physical envelopes with different categories. Mine, when I first started were ”Gas”, “Entertainment”, and “Personal”.
I was young and living at home with my parents so my expenses were super low, but prior to starting this method of budgeting, I’d spend literally all of my paycheck, every pay period.
All of it!
It took some adjusting, but the envelope method allowed me to save $7k in six months, money I used to move to spend a month in Cambodia and then teach English in China.
Too Long, Didn’t Read (TLDR): Why I Recommend Dave Ramsey to Learn How to Manage Your Money
I recommend his stuff because it’s simple AF. And when you’re just starting out learning how to manage your money– you need simple and effective, which is exactly what the envelope method is.
And you have a massive support group because everyone and their mom (and maybe their mom’s mom) knows who Dave Ramsey is and might’ve done his program at one point or another. In short, you’ll be in good company.
2. Investing: JL Collins
JL Collins is famous for his stock series and his book “The Simple Path to Wealth”. I haven’t read the book but I have read the stock series and several other of Collins’s posts, and his blog has helped me better understand my 401(K), Roth IRAs, mutual funds versus index funds, retirement, and the 4% rule.
In his stock series, he covers lots of different myths and worries about investing right out of the gate. Like:
He’s also an entertaining writer which makes reading about dry topics like HSAs and RMDs bearable, and even enjoyable at times.
One article of his I particularly love is about home-ownership as an investment. He basically tries to outline what the WORST possible investment imaginable would be, without saying what that investment is. Here’s a sample:
- It should be not just an initial, but if we do it right, a relentlessly ongoing drain on the cash reserves of the owner.
- It should be illiquid. We’ll make it something that takes weeks, no – wait – even better, months of time and effort to buy or sell.
- It should be expensive to buy and sell. We’ll add very high transaction costs. Let’s say 5% commissions on the deal, coming and going.
- It should be complex to buy or sell. That way we can ladle on lots of extra fees and reports and documents we can charge for.
Don’t hate me. He’s not saying you shouldn’t buy a house. He’s saying MOST of the time a home isn’t a good investment. MOST OF THE TIME. In certain circumstances is it a good investment? Of friggin’ course.
My Opinion on Home Ownership as an Investment
My personal opinion? I think that people purchase homes because they want to purchase homes, and they feel better about purchasing them (cause it’s scary cause it’s the most money you will likely ever spend on anything) when they believe it’s a good investment, which most of the time, it isn’t.
And that’s okay.
A house is an investment if you’re bad at saving or if you plan to stay there a very long time or if you happen to buy right before your neighborhood experiences a boom. But your home doesn’t have to be an investment. It can just be a home that you really wanted to buy because you value purchasing a home. That’s fuggin’ okay too, my dude.
But I may be drinking the JL Collins and Millennial Revolution Kool-aid.
TLDR: Why I Recommend JL Collins to Learn How to Manage Your Money
His stock series is the actual mother fuckin’ bomb. Read it to learn about investing. That is all.
Speaking of personal finance bloggers who think purchasing a home is a terrible investment, let’s talk about Millennial Revolution.
3. Millennial Money aka Quit Your Day Job and Travel the World Full Time Wet Dream: Millennial Revolution
I’ve mentioned Millennial Revolution before. It’s one of the few blogs I’ve binge-read. You can check out my review of them at “8 Binge-worthy Personal Finance Blogs and Podcasts”.
Founders Kristy Shen and Bryce Leung retired at 31 to travel the world. THIRTY-ONE!?! Granted, they were both highly-paid computer engineers, but still. Impressive to say the least on their ability to stop their frivolous spending and save the majority of their income.
Millennial Revolution is a mecca of information for all things FIRE, and how to pursue financial independence. They are definitely more geared towards Millennials (did the title give them away?) which is why I list them as the millennial wet dream for millennials interested in getting a handle on them monies.
They also have a great series on investing which they have since turned into an investment workshop. Definitely worth checking out, and I actually read that series before I got to JL Collins. I particularly liked the following articles within their Investment Workshop series (all articles are FREEEEE):
- Investing with Debt
- Dividends, Glorious Dividends
- Understanding Your ETF’s
- Making Your Investments Tax-Free
- Picking your ETFs
- How to Invest for Free
I also binge-read their “How We Got Here” series, because it laid out step by step guide to how they started as major spenders (like spending $90 a day on eating out and clubbing type of spenders) to saving almost 80% of their income. I binge-read it because I’m jealous of their life, which is a great indicator that I want to be doing what they are doing, but also because their journey is like a map on how to get from where I am to where they are.
Their blog made FIRE appear accessible and relatable, and was one of the biggest factors in my deciding to pursue FIRE. Kristy and Bryce are young, funny, and fed up with the 9 to 9 grind. So, they decided to build a seven-figure portfolio to quit their jobs to travel the world and write children’s books. They now travel full time and do it on less than $40k a year.
GAH. I WANT.
My version of FIRE means I want the option of working or not. Even though I’m lucky and like my job, I’m not sure I want to “retire early”. But I sure as shit would love the option to take months off just to say– bye! Heading off to travel for a minute!
Watching their transformation helped me realize that people do the things I want to do, and it’s totally possible for me to do the same if I decide to put in some work.
TLDR: Why I Recommend Millennial Revolution to Learn How to Manage Your Money
Their blog motivated me, unlike any other blog. If you’re a millennial, and the idea of traveling full time without needing to work gets you hot? This blog. Read now.
It’s a great blog for people looking to dip their toe in the FIRE community, and it may make you dive headfirst. Even if you’re not interested in retiring early, the principals and skills you learn by learning about and acting on some FIRE techniques are valuable to anyone.
Like living below your means or cutting out spending that does not bring you joy (Marie Kondo FIREing, anyone?) Which brings me to Frugalwoods…
4. Frugality and the FIRE Lifestyle: Frugalwoods
I LOVE THE FRUGALWOODS.
Frugalwoods was started by a woman named Liz who started writing about her and her husband’s frugal habits and money slashing tricks to help them achieve financial independence and start their journey on a homestead.
She writes all the way through their money experiences, learning how to manage their money first in a super expensive city (Cambridge) and then how they made the transition to “modern-day digital homesteaders in rural Vermont.”
I like their blog because not only is Liz a super relatable and fantastic writer, but she teaches you how to manage your money through frugality. The skills and tactics she shares are applicable to anyone looking to manage their money, even if you’re not interested in FI or FIRE.
If the name didn’t give it away, they are EXTREME frugalists.
Like I-will-never-be-as-frugal level, but reading their story inspires me to spend less so I can enjoy more. But her tips teach me how to be a little more frugal and spend a little less money.
I really love her tips about groceries and cooking, explaining how her family of four eats on such a shoestring budget. Sometimes she’ll share the weekly menu and groceries bought, and sometimes she’s dive into philosophy about the natural alignment of frugality and minimalism.
Some of my favorite articles are:
- How a Year of Extreme Frugality Changed Us
- City vs. Country: Which is Cheaper? The Ultimate Cost of Living Showdown
- How We Live Frugally in the City
- How I Try to Align My Time and Money with My Highest Priorities
- When Spending Money Equals Happiness: Why I Bought a Roomba
There are seriously so many good articles it’s hard to pick just a few. Great if you’re interested in minimalism and values-based spending, which is exactly why I started budgeting in the first place. Where we spend our money shows us what we value. The Frugalwoods are the embodiment of this philosophy.
Plus, if quitting your job to run your own homestead so you can hike all day in the mountains of Vermont gets you hard, this is your blog and guide on how to get there in as little time as possible.
TLDR: Why I Recommend the Frugalwoods to Learn How to Manage Your Money
Frugalwoods will give you some amazing tips on how to be frugal. It will blow your mind just how little they spend, and how they simplify every aspect of their finances. I find them inspiring, and their blog aligns minimalism, environmentalism, mindfulness and frugalism in a very non-obnoxious way.
On to another frugal weirdo…
5. FIRE Bible and OG: Mr. Money Mustache
This post would not be complete without mentioning Mr. Money Mustache.
Mr. Money Mustache, also known as MMM by his cult following, is the original gangster of the FIRE movement. I talk about him in my last blog post about personal finance blogs and podcasts, and he’s the best place to go for getting a good and deep understanding of the FIRE movement and how the hell it’s possible to retire early.
He’s definitely extremist, so he’s not everybody’s cup of tea, but I do think a lot of his information is really valuable. His blog is where I first learned about and then understood the 4% rule.
Side Tangent: The 4% Rule
The 4% rule is the rule in which FIRE folks set their retirement goal. In a nutshell, the 4% rule dictates you to save enough money in your investments and retirement accounts in order to be able to pull out 4% safely for the rest of your life. For some, that’s safely $500,000 if you live off of $20k a year. If you live off of $100k a year, then your retirement accounts need to be at $2,500,000.
See how frugality and spending less can allow you to retire early? It’s that simple.
Read “The Shockingly Simple Math Behind Early Retirement” article here to learn more about the 4% rule.
Like all the blogs I’ve mentioned, his writing is also entertaining, but he’s definitely extreme and an incredibly frugal. If you need a textbook on how to get your money in order by spending as little as possible and start saving like a boss, he’s your guy.
He doesn’t update the blog all that often anymore, but the core pieces that he does update are still quoted and used often in the most popular FIRE blogs and podcasts.
Why I Like MMM
I like MMM because he takes every possible argument you have against pursuing FIRE and explains to you why you’re wrong.
I fuggin’ love it.
He’ll take any excuse, any lame “but this..” and he’ll turn it on its head just to argue it sometimes. And then he’ll argue in favor of the argument he just argued against, because WHY NOT?! He’s retired and got time.
And boy does he have plenty of time to cover every topic imaginable.
Grocery bill? He’s got it.
Energy efficiency? That too.
Starting a co-working space? Sure, why not?
Bicycling and coronavirus? MHMMM.
But he talks about consumerist society and how we’re destroying the world. He talks about how minimalism and frugalism equals environmentalism and he talks about how to pursue your passion after achieving FIRE.
He’s a big pile of FUCK YEAH until you get to a post you disagree with him and then he’s a FUCK OFF DUDE.
It’s a love-hate relationship. But I mostly love him and notice that when I say FUCK OFF DUDE, it’s not because he’s wrong, it’s because I’m not willing to do it. Like dumpster diving or never eating out.
Some of my favorite MMM Articles are:
- Great News– Early Retirement Doesn’t Mean you’ll Stop Working
- Getting Rich: From Zero to Hero in One Blog Post
- The 4% Rule: The Easy Answer for “How Much Do I Need for Retirement”
- Killing Your $1,000 Grocery Bill
TLDR: Why I Recommend Mr. Money Mustache to Learn How to Manage Your Money
He’s the OG. He’ll answer literally any question you ever have about pursuing FIRE and if you don’t want to pursue FIRE, he’ll explain to you how to retire someday and how to stop spending so much keeping up with the Jones.
So there you have it! These are my favorite resources on how to get started in managing your money. Let’s do a quick run down summary for those who scrolled to the bottom, shall we?
5 Free Resources to Help You Learn How to Manage Your Money:
- Dave Ramsey: Easiest way to get started. Envelope method and debt-free for the wiiiiiin!
- JL Collins: LEARN TO INVEST.
- Millennial Revolution: Millennial “I just want to quit my job and travel the world wet dream”. ‘
- Frugalwoods: Frugal King and Queen, learn how to spend less money.
- Mr. Money Mustache: FIRE Bible. Everything and anything you could ever want to know about the world– I mean how to manage your money.
These days, there are so many good resources out there to help you learn how to manage your money. If it’s something that’s been on your list for a while, friggin’ do it. We’ve got the gift of time in this shit storm of the coronavirus, so do some real self-care and take control of those finances.
Questions? Comments? Resources?
This blog only gets better if my readers ask questions, even if it means providing constructive criticism to what I’m leaving out or missing. You got feedback? I want to hear it. Pop your thoughts in the comments below or send me a DM on any of my social channels and I will respond! I want this blog to be a resource to the readers who come to it and you can help by sharing your thoughts, even if your thoughts are just “Hey dude! Love this shit. Keep going!” All communication is appreciated to know I’m not writing into oblivion.
Got some resources you just NEED to share with the world? What did I miss? Got any you recommend I check out or someone in the comments check out? Share your knowledge with the Clo Bare community by commenting below or sharing this article with your own suggestions!