The Three Es: How to Rethink Your Money Post-COVID
Money is on everyone's mind right now. Nearly all of the respondents to a recent Brit + Co online survey said they want to make more money. But many times we just don't know how. The fear of asking for a raise, launching a dream business, and investing takes over and instead of taking on the potential risk we don't take action.In this week's Teach Me Something New podcast, Brit and Anj talk about money myths, investing, and launching a business in an economic downturn with financial expert Nicole Lapin, bestselling author and co-host of the podcast Hush Money.
"Whatever is going on, the biggest enemy is between your ears. We need to get over that and understand that this is a huge opportunity. Great fortunes are made; great businesses have been made during economic downturns," said Lapin. To start, you need a budget. "I think of a spending plan like an eating plan that allows for small indulgences," she says. She breaks that down into your essentials, your endgame, and the extras and post-COVID that means: "The essentials would be about 65 percent of your overall spending plan, the endgame should be 30 percent and the extras are 5 percent of your spending plan," says Lapin. Here's how it would work:
The Three Es
Essentials: Your essentials are everything you need to live on every single day: your housing, your food, your transportation. The first step Lapin says is creating a balance sheet for yourself, where you figure out everything you have coming in and everything you have going out and they should match up. Brit's new favorite app Copilot can help you figure that all out so you can watch your spending. "I like to put systems in place so I safeguard myself against myself. That's through automation," says Lapin. She also suggests reaching out to your major bill collectors (car insurance, rent, utilities, cable, phone, mortgage) for relief programs in place for times like these. "If you aren't negotiating you absolutely should be," she says.
Endgame: Your endgame is your future self, your savings, your retirement, and your investments, says Lapin. The secret to learning how to invest is learning the language of investing. Check out Brit + Co's *free* Investing 101 course for a primer. "It's not that complicated, so don't let the language intimidate you.," says Lapin. This is also a good time to think about your future self. In our recent online survey, 34 percent of Brit + Co readers said they're in their job for the paycheck. It's time to change that. Lapin notes that many successful businesses started during an economic downturn (Trader Joes, GM, Disney, her own). "I think right now you can do a side hustle with very little risk and there are ways to take things virtually," says Lapin. "If not now, then when?"
Extras: The extras are your lattes, mani-pedis, whatever does it for you, says Lapin. "Allow yourself the equivalent of a Hershey's Kiss so you don't end up binging on a big old hunk of chocolate cake in the middle of the night because you're so starved and deprived." Just 5 percent of your budget should go toward the extras right now. "You still have to treat yourself but just slightly and the fact that the world is basically closed really helps you do that," says Lapin. "There's really nothing you should be splurging on right now."
Be sure to tune into this week's Teach Me Something New podcast for more gems from Lapin on making more money.
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Theresa Gonzalez is a content creator based in San Francisco and the author of Sunday Sews. She's a lover of all things design and spends most of her days momming her little one Matilda.