Tag: Budget

Last week has been eventful. As we all know, Russia has invaded Ukraine and the incoming news images look pretty scary. Apart from the complicated political situation the conflict also impacts the economy, as war always does. Politics aren’t my strong suit, but I can help you with money related questions so that’s why I decided to write this article. How does war impact the economy? There is not a short and simple answer to this but I’ll try to explain. Insecurity and connection A military conflict always brings a lot of insecurity about the future into the world, and if there’s one thing the markets don’t like it’s insecurity. In our modern society we are very much connected, and the same goes for companies. If a company has trade relations in a conflicted area, a war will obviously have consequences. A lot of industries struggled to survive and some didn’t quite make it. Now we are facing a new crisis. As consumers we will definitely feel this in our wallets. For example: my hometown Antwerp is well known for its diamond trade. A whole lot of those diamonds are imported from Russia. With Europe announcing economic sanctions to punish Russia for the invasion, there is no question about those diamond traders being impacted. Let me be clear: I am not discussing the right or wrong of these sanctions, this is not a page about politics. I merely want to explain to you how complicated this whole situation is and what is going on in the market. War demands energy The war also causes prices of gas and oil to surge, and those are a couple of the driving forces behind inflation. We are just coming out of a pandemic (that is: I sincerely hope we’re finally done now) that has left its marks on the economy. A lot of industries struggled to survive and some didn’t quite make it. Now we are facing a new crisis. As consumers we will definitely feel this in our wallets. How to protect your wallet from war impact So what can you and I do to protect the money in our wallet and to stay out of trouble? Here are a couple of my tips. Check your emergency fund Your emergency fund should contain 3 to 6 months worth of expenses. If that is not the case, it should be your priority to set aside money until you have your buffer. In this blog I discuss what an emergency fund is in detail, and why it is so important to have one. I also explain when you can use it and when not. Keep paying yourself first Paying yourself first when you receive your income it crucial. As soon as money hits your bank account, set aside at least 10%. What you do with it depends on your situation. First you should, again, make sure that you have a buffer. Once that’s full, you should put this money towards investments. Paying yourself first should be so engrained in your habits that you don’t even think about it after a while. Set up an automation and you’ll see that you won’t miss it at all. Analyze your expenses If you feel like you’re running low on cash it might be a good time to have a closer look at your expenses. It could be that there are things that cost you more than you realize. An expense tracker can help with that. I created an Excel template that you can download for free. Download it by clicking on the image below. Do not panic sell If you are already investing there’s a chance you have been nervous during the past few weeks. The market volatility has caused investors all around the world to have sweaty palms (to say the least), but I want to urge you to keep your calm. It’s true that it can be challenging to watch everything go up and down like the ocean in a thunderstorm, but you need – and this is an absolute MUST – to switch off your emotions. Emotions don’t do well on the stock market. If you find that hard think of it like this: you actually help the economy by staying calm. It is because of panic reactions that volatility gets worse so please don’t throw all logic overboard. Last summer I went surfing in Morocco and I came up with this metaphor: imagine you’re flat on your board, paddling and enjoying the water. Then all of a sudden the ocean gets rough and the waves get really high. You might start panicking and want to swim back to the shore, but you know what happens when you abandon your board in choppy waters? There’s a very large chance it will smash you on the head. It’s one of the first things they teach you: when you fall off, protect your head. Hold on to the board instead and ride out the wave, that’s what will get you safely to the shore again. Review your investing strategy Having a strategy is necessary when you get into investing. When hard times strike and your portfolio’s performance makes you anxious, then maybe it’s time to review your strategy. Maybe your have taken on more risk than you’re comfortable with, or maybe you haven’t diversified enough. It’s not easy to determine the right strategy for you, that’s why I talk a lot about risk profiles in my course ‘Newbie to investor’. If you wanna learn more, check out the information on my website or send me a message on Instagram, I’m always ready to help. The best cure for financial losses The very best defense against financial losses? Financial education. If you know how money works, you will know: how to prevent losing it how to get it back if you have lost it In ‘Newbie to investor’ I teach you: how to analyze your financial situation how the stock market works how you can create

Ah, love! It can be so beautiful, but what if money challenges your relationship? Finance can drive the best couples apart. Luckily I came up with 5 easy money management tips to keep the romance thriving. Love don’t cost a thing “My love don’t cost a thing” Even J-Lo said it, so it’s probably true. But what if money costs you love? Money makes the world go round, whether you like it or not. That means that finance has a way of shaking the fundaments of your relationship too if you don’t see eye to eye. In a society where it’s taboo to talk about money too much it can be a challenge to get down to the financial nitty gritty with your partner. It can feel very intimate to open up about your money mindset, especially when you have different ideas. Now here’s the good news:YOU ARE NOT ALONE! Arguments about money are amongst the most common reasons for divorce. Ouch. But can you tackle this problem? And if so, how? Money management for couples In a world where financial education is absent in the school system it’s hard enough already to make it work on your own, let alone as a couple. That’s why I came up with 5 easy tips for couples to get those money mindset issues out of the way. 1. Start with yourself Before anything else: get clear on your own money mindset. Do you lean towards saving or spending? Was money a problem when you were little? Are you into investing? Get to know your own opinions before challenging someone else’s. If you happen to stumble upon some limiting money beliefs of your own, then this is the time to work on them. 2. Don’t wait too long to discuss money with your partner I know, I know. When you’ve just met someone it’s all about the butterflies and you want to do nothing but fun stuff. I get it, you’re in love! But I’m gonna go ahead and be a party pooper: you need to start talking about money as soon as possible. When you just start dating you are interested to know if your partner wants to eventually get married or have children, don’t you? Finance is just as important to discuss because it has a huge impact on your future. 3. Be honest about your finances Honesty is crucial in any relationship, so it shouldn’t come as a surprise that you need to be. honest about your finances. Many couples have hit a bump in the road because not all of the information was out in the open. So if you have any debt or other money issues: put your cards on the table. If it’s meant to be you can work it out together. 4. Look for the middle ground What if you and your partner have very different ideas about money? This can be tough, but it’s not necessarily a ground for separation. In fact it can even be inspiring. My advice to couples with different opinions on money would be to sit down and interview each other. Get to know why they have certain beliefs. Questions you can ask: How did your parents talk about money? Was money an issue when you were little? Did you get pocket money? Do you talk about money with your friends? What does being rich mean to you? … Grab a drink and some snacks, you could be in for a long night. Remember to keep an open mind. You might get your significant other out of their comfort zone and maybe they can teach you a thing or two as well. 5. Think of yourself as a team It’s incredibly cheesy but yes, teamwork makes the dream work. You are no longer alone, you have a partner to rely on. Don’t keep score, because no one benefits from that. Learn from each other and don’t let ego run the game. Wherever there is mutual love and trust, there is almost nothing you cannot conquer.

Over the years you managed to save up for a rainy day. Good on you! This is an accomplishment worth celebrating because not everyone is able to save money. But what exactly is considered a rainy day? When do you tap into that buffer? I can help you decide when to use – or not use – your emergency fund. What’s up with your financial situation? Wether you are planning to start investing or not, it is always a good idea to have a closer look at your financial situation. Determining where you are at is the first step of moving forward. Analyze your spending behavior, check what goes out versus what comes in, and establish an emergency fund. Enter: emergency fund What is it? An emergency fund is a cash buffer for when anything goes wrong. Keeping your money 100% invested is not the best idea, you need to keep some cash at hand. You could save for short term goals (such as the purchase of a house, renovating the bath room, a trip, a wedding…) but you also need to save for emergencies. Where do you keep your cash buffer? You’re going to keep your buffer in a savings account. If you are able to find one with a high interest rate that’s awesome, but nowadays it’s nearly impossible to find a high yield account. Do NOT keep the money in your checking account. This account is for daily expenses only: groceries, bills, going out… It might sound obvious but you don’t want to know how many times I have seen people stash their whole capital in an active checking account. Why is keeping an emergency fund in your checking account a bad idea? There is no way whatsoever of telling your active budget and your savings apart. It is way too tempting to spend your savings if you have direct access to them through a debit or credit card. If you were to become a victim of phishing or fraud – I truly hope this never happens but better safe than sorry – you don’t want them to have easy access to all of your money. How much money should an emergency fund contain? Your emergency fund should contain 3 to 6 months worth of expenses. That’s the general rule of thumb, but I personally think 6 months is a lot. I prefer 3 months because of inflation, but you have to find out for yourself what amount you are comfortable with. If you feel more secure having 5 or 6 months worth of expenses as a buffer, by all means, stick to that. I would recommend 6 months as a maximum though, unless you are saving for a large project. Having trouble building your emergency fund? Do you find it hard to save? → Click on the image below to download my personal expense tracker FOR FREE! What is an emergency? When is a good time or occasion to actually use the money you saved? Let’s start by defining what an emergency is: An emergency is a serious, unexpected, and often dangerous situation requiring immediate action. Serious → the event is not to be taken lightly Unexpected → you couldn’t foresee this happening and were unable to prepare Dangerous → the event is impacting your life in a negative way Requiring immediate action → you need to make an urgent decision These are the objective criteria, but of course an emergency can look different to everyone. These 3 questions will help you decide what an emergency is to you: What is the impact on my life if I don’t spend money on this right now? Is the emergency serious? In other words: are we in the ‘must have’ category or the ‘nice to have’ category. Is there an alternative? Can I get the money somewhere else? Example: my washing machine breaks down. Impact: for me, a washing machine is very important. I used to not have a washing machine when I just moved out of my parents’ house and I know now what a luxury it is to do your laundry at home. I couldn’t live without it anymore, so my machine breaking down seriously impacts my life. Must have or nice to have: for me this is a must have. I do not have time to run to a laundry salon and wait for my laundry to be done. Alternative: can I put in extra hours at work or make extra money some other way on short notice? If that’s not the case, I will use my emergency fund. Examples of must haves: Fridge breaks down: you need a fridge to store your food. Without it, it will go bad. Period of illness: sometimes you need to prioritize your health (mental and physical) and take a paycut. It’s absolutely fine to use your emergency fund for this. Income disappears: losing your job is an emergency worth using your buffer for. Your savings literally buy you time to find a new job. They say money doesn’t buy happiness. It’s true that counting the money in your account doesn’t make you happy. But when going through a stressful time you don’t want any added financial stress. When to not use your emergency fund? Nice to haves are not emergencies. Maybe I am stating the obvious, but you would be surprised how many people use their savings to buy a pair of expensive boots. For your information: I’ll be the first to admit that boots can make you happy. But financial stress doesn’t, please keep that in mind. Examples of nice to haves: An expensive purse or piece of designer clothing. A new phone (when the old one isn’t broken). A pleasure trip that you know you cannot afford. What happens after you have used cash from your emergency fund? This is important! Once you have spent the money: let it go. Most of us dislike spending money because it hurts us. But being able to pay