The Only Money Plan You Should Follow For The Next 3 Months
Track your cash flow, then follow a financial priority order: starter emergency savings, employer match, high-interest debt, full emergency fund, then investing.
- Review three months of statements and include irregular bills to calculate income, spending, and savings.
- Cut or renegotiate major costs, then automate payments toward debt and emergency savings.
- After expensive debt and emergency savings, invest regularly in low-cost diversified funds and work to grow income.
The priority order and examples are clear from the notes; the video adds no essential walkthrough. · Best for: People rebuilding their finances or unsure what to prioritize over the next three months.
A five-part 90-day reset: understand your finances, build cash reserves, reduce major expenses, automate your plan, invest in order, and increase income. The central principle is to do sound financial actions in the right sequence.
Measure your finances and calculate runway0:50
- Review the last three months of bank and credit card statements; use a spreadsheet, app, or AI to categorize spending.
- Convert irregular bills into monthly amounts—for example, divide a six-month insurance bill across six months.
- Calculate runway using essential expenses. The example uses $3,500 monthly essentials: $10,000 covers about three months; $21,000 covers six.
- Start with at least $1,000 in emergency savings, then work toward three to six months of essential expenses.
Prioritize employer match and expensive debt4:20
- A 24% credit-card balance can cost more than the uncertain long-term return expected from stock investing.
- The speaker's order is: pay bills, build a small emergency fund, get the employer match, pay high-interest debt, build a three-to-six-month emergency fund, then invest.
- Consider the employer match terms when deciding how to split money between matching contributions and debt payoff.
Find savings in large expenses6:07
- Focus first on housing, transportation, and food rather than assuming small cuts will transform your finances.
- Compare the full cost of housing choices and account for vehicle payment, insurance, maintenance, and depreciation.
- Shop insurance and review eating out, discretionary purchases, and phone costs; the example suggests these changes could free up $400 monthly.
Automate the plan and invest simply10:17
- Automate the monthly allocations; the example directs $600 of an $800 surplus to credit-card debt and $200 to savings.
- When the card is paid off, redirect that payment toward the emergency fund, then investing.
- For investing, the speaker favors low-cost diversified index funds such as VTI or an S&P 500 ETF; consider international stocks or bonds based on age, risk tolerance, and time horizon.
- Invest a regular amount on a regular schedule. The $400 monthly, 30-year, 7% return example is hypothetical and excludes inflation, taxes, and fees.
Increase income14:43
- Look beyond expense cuts: pursue a raise, a new job, job hopping, or freelancing.
- Keep a record of your work and results in a 'brag book' to support a raise request or job interviews.
- The speaker gives examples of side businesses including baking, growing garlic, selling eggs, and arranging flowers.
Step by step
- Review three months of bank and credit-card statements; total monthly take-home pay, expenses, and savings.
- Separate essential expenses from discretionary spending and convert irregular bills into monthly amounts.
- Build at least $1,000 in emergency savings.
- Contribute enough to receive an employer match, considering the match terms.
- Pay down high-interest debt, then build emergency savings toward three to six months of essential expenses.
- Automate transfers and payments; redirect freed-up debt payments to savings and later investing.
- Invest regularly in low-cost diversified funds, and pursue ways to increase income.
Tools & resources mentioned
- Excel or Google Sheets — track income, spending, and irregular expenses.
- VTI — broad U.S. stock-market exposure, as described by the speaker.
- S&P 500 ETF — another simple, diversified investment option mentioned.
- FDIC-insured high-yield savings account — hold emergency savings.
- ESG — short-term Treasury ETF example mentioned for emergency savings.
Notes are AI-generated from the video's transcript and may miss nuance.