Trapped by Your Lifestyle – Washington Post and Top 3 Tips for Your Tax Refund

Fearless Finance, my web-based personal finance platform and mobile app designed for the majority of Americans who want clear insight into their financial health and don’t see a simple path to financial freedom, is now available. I designed Fearless Finance to fill the gap in the financial planning space: a platform and app that would give users a complete 360 degree look at their finances (spending, saving and goals), a simple mobile app for tracking the two expenses that matter most for staying on plan and ultimately, control of their own financial wellness.

This weekend, Tom Heath of the Washington Post’s Value Added column interviewed me and talked about Fearless Finance. Take a look!

As my newsletter subscribers, i want to extend a limited time offer to you. Use promo code “Launch20” and get 20% of a one-year subscription or a one-time run of Fearless Finance. You get the mobile expense tracking app free with your monthly or annual subscription. If you’ve been hesitant to see me in person, Fearless Finance may be a great option for you.

Users on the platform:

  • Only have to run the program once a year or whenever there is a major life event like a new job or marriage.
  • Don’t need a budget just need to track two things each month with the easy to use mobile app.
  • Linking your accounts is optional, no pressure

The mobile app (available for IOS and Android) allows you to track full discretionary spending and groceries through the month to stay on target and not overspend. If you stay within your targets on groceries and discretionary spending, and use your Rainy Day Savings for unexpected expenses, you should be able to save as planned and therefore reach your goals. If you choose to link your credit card and checking account, the app will automatically scrape transactions, which are then auto-categorized to make it as easy as possible. If you choose not to link, you can add your transactions manually. No line items or budgets to worry about.

One of the best reasons to run Fearless Finance is to see if you are “Savings Secure.” You have some money for unplanned, required stuff that happens like root canals, and car repairs (Rainy Day Savings), and 3-6 months of expenses in case you experience a total loss of income (Emergency Savings). Now, it’s tax time and you are looking forward to a nice refund check. How do you decide how to best use the money? Vacations, debt pay off OR savings security?

  1. Make sure you have $3k for Rainy Day Expenses ($1500 if you rent) and at least ONE MONTH of expenses for Emergencies
  2. Save for large upcoming one-off or Annual expenses (e.g. CAMP! or braces), because if you don’t have money when these expenses come up, you will charge them and you’re back on the cycle of credit card debt
  3. Pay down credit card debt when #1 and #2 are satisfied.

Here’s the key: you MUST have some liquid savings for stuff that happens and big upcoming expenses to KEEP YOU OFF CREDIT CARD DEBT. There’s no sense putting your tax refund toward credit card debt FIRST when you’re going to have to charge more stuff as it comes up. Having liquid funds is the only way to get off the credit card/debt dependence cycle and it usually means putting off paying down debt for a few months to amass some savings. It’s seems odd to hear a financial planner tell you to wait to pay off credit cards, but it’s okay to do if you are trying to amass some liquid savings first.