Your Questions ANSWERED!!
Shownotes
Hello and welcome back to another episode of the Thrive With Money Podcast! I am SO excited about today’s podcast episode where I am doing a Q&A on the questions this community asked me on my Instagram page.
BUT before we get started, please take a moment to leave a review of this podcast! The more positive reviews the Thrive With Money Podcast receives, the more we are able to grow organically and create an even bigger impact in the world. It only takes about 15 seconds, and it would truly mean the WORLD to me.
How to pick an idea for a side hustle
UGH okay I absolutely loooove whenever I get asked this question, because I truly believe that starting a side hustle can absolutely change someone’s life (and from now on I’m going to refer to this as “starting a business” because starting a side hustle IS starting a business)
So, a little known fact about me and my journey to Save Live Thrive is that this is probably the fifth or sixth side hustle I’ve started.
Crocheting side hustle (I quickly realized that the amount of time it takes to crochet a scarf and the cost of supplies is just… a lot)
Teaching voice lessons
Makeup blog
Music education blog
Personal Finance Blog (Save Live Thrive!!!)
It’s okay to experiment and find what works for you.
Start by listing your hobbies, skills, interests, and experiences. I encourage you to just start a stopwatch and take 10 minutes to just write down everything that comes to mind.
This could be ANYTHING
Baking
Teaching
Drawing
Organizing
Painting
Editing
Writing
Whatever you do at your full time job
Literally ANYTHING
Brain dump it allllll on paper
Highlight the top 3 areas that really spark your interest, and then identify the one that you can see yourself showing up for consistently each week.
Because, I’m not going to sugarcoat this at ALL, starting a business takes a LOT of work. And there will be days where you are like “why the heck am I doing this?” so you want it to be a topic where you are actually interested in showing up for and engaging in each day.
Once you’ve picked this item, next you are going to do some market research to determine whether or not this thing is profitable. Because you’re starting a business to make money, so you want to pick a niche that will make you money.
How to stick to a budget, but more specifically how to budget on a low income
This is a question that is really close to my heart, because when I started my first budget, my total annual income was around $24,000.
The reality when it comes to budgeting on a low income is that you need to be very intentional about where every dollar is going.
Track your spending to see where your money is going
Particularly in categories like food (which, 87% of my clients report is the category they would like to cut back on)
Lower housing costs
This isn’t sexy and not the easiest thing to hear, but this is so important when you’re budgeting on a low income because housing is probably the biggest expense people have in a given month
Find a roommate
Find a different location
Downsize
Pay off high interest debt (the interest fees can really be killer)
My private student loan had an 11% interest rate, and each month it was accumulating about $120 in interest
Set up automatic savings transfers
Even $25 a month will add up over time
Find other areas to cut back on
Transportation
Insurance (shop around for other quotes to see if you can get the same or better coverage for a cheaper price)
Cancel unused subscriptions
Find ways to increase your income
This was a game changer for me because it gave me more money to work towards my financial goals. Also, if I had never started my very first side hustle, Save Live Thrive probably never would have been a thing
Is disability insurance worth it?
Okay I am SO glad this question was asked, because this is something that I talk to my students about inside of the Wealth Building Bootcamp, because understanding the different types of insurance coverage you need is SUCH an important part of mitigating financial risk AND maintaining your financial health
While investing deals with speculative risk (which has a possibility of financial loss OR financial gain), insurance can only be used to cover pure risks that have a potential for financial loss and no potential for financial gain. Insurance protects you from pure risks, which are types of risks that have potential for financial loss and NO potential for financial gain–especially when that risk is uncertain.
So there are 5 types of insurance that, at a minimum, I recommend everyone have (you may need more than this depending on your specific situation)
Heath Insurance
Auto insurance (which is also required by law in most states)
Life insurance
Homeowner’s or Renter’s Insurance
Disability Insurance
And, of these different insurance types, disability insurance is often the most overlooked.
So, disability insurance is basically a type of insurance that pays you a monthly benefit if you become disabled. There is short term disability insurance, which can start paying benefits within 2 weeks of a qualifying illness or injury, and cover you for a benefit period that’s usually between 13-26 weeks. You get those benefits until you can return to work or the benefit period ends.
But… what happens if you can’t return to work after 13-26 weeks? Long term disability insurance provides benefits for a longer period, and the benefit period is usually stated in years (5, 10, 20, or even retirement age, depending on what’s stated in the plan)
According to the Council for Disability Awareness, the most common reasons for short-term disability claims are:
Pregnancies
Musculoskeletal disorders
Injuries (sprains, fractures, etc.)
Digestive disorders
Mental health issues
The most common reasons for long-term disability claims are:
Muskuloskeletal disorders
Cancer
Injuries
Mental health issues
Circulatory issues
And seeing those causes is kind of eye opening, because those are pretty common things. I think a lot of people jump to the worst case scenario of some type of paralysis or something, and say “oh! That won’t happen to me” but these reasons are things that I know I hear people talk about fairly often.
According to the Social Security Administration, more than 1 in 4 20-year-olds can expect to be out of work for 90 days or more because of a disabling condition before they reach retirement age.
And, on TOP of all of that, according to a 2019 study published by the American Journal of Public Health, 66.5% of bankruptcies in the US were due to medical issues like being unable to pay for high bills or lost time from work. In other words, medical disabilities.
In a nutshell, disability insurance helps replace your income if you get seriously sick or injured and aren’t able to work and/or throughout your recovery. The need for disability insurance can vary depending on your career and various personal situations. But if someone has a profession where injuries are common, it’s a manual labor job (or job you would have no chance of working if you were disabled), or you’re the breadwinner, it’s definitely worth looking into.
How to Obtain Disability Insurance:
Employer-sponsored coverage
Buy it through the workplace (voluntary benefit)
Buy it through a professional association
Buy an individual disability insurance plan from an insurance broker or directly from an insurance company
How to decide which debt to pay off first
There are two different debt repayment strategies that I teach my financial coaching clients:
Debt Snowball
The Debt Snowball method is like the Debt Avalanche, but focuses on paying off debts in the order of lowest to highest balance.
While paying the minimum payment on all other debts, focus on sending extra money towards the debt with the lowest balance. Once that debt is paid off, roll what you were paying on that debt towards the debt with the next highest balance.
By paying off lower balance debts first, you quickly see the progress that you're making! This can help keep you motivated on your debt free journey.
Debt Avalanche
The Debt Avalanche method is a debt repayment strategy that prioritizes paying off debts in the order of highest to lowest interest rate.
While paying the minimum payment on all other debts, send as much extra money as possible towards the debt with the highest interest rate.
Once the debt with the highest interest rate is paid off, add the amount that you were paying on the debt with the highest interest rate into the debt with the next highest interest rate.
By paying off the highest interest debts first, you can save more money on interest overall.
Run the numbers, but ultimately pick the one that you will be motivated to stick to
That’s all I have for you today! If you loved this episode, please share it on your IG stories so that we can grow this community together and make some big waves in the financial wellness space.
See you next time!
Disclaimer: The content and information provided on this podcast is for educational purposes only and does not constitute professional financial, legal, or tax advice. For recommendations on your specific financial situation, you must additionally seek the services of an appropriate licensed legal, accounting, tax, insurance, or investment professional.