My Beginner's Guide to Personal Finance (Step by Step)

This is my guide to Personal Finance. If you're a beginner just learning about Personal Finance, or you're already a pro wanting to solidify the basic principles, this video is for you. In it, I cover budgeting, methods to pay down debt, establishing an emergency fund, saving for goals such as retirement or buying your first house.

In this video I talk about the 6 different phases of how I view Personal Finance. Each phase depends on where you are in life, but in general can be summarized below.

Phase 0 - I view this phase as someone who is still in school or just out of school and has somewhat of a safety net to learn skills, build credit, and establish some independent income. In this phase, I think the most important goals are to establish credit (with a secured credit card), paying bills, and also to start learning how to make money.

Phase 1 - in this phase, you're hitting self sufficiency. Which means that you make more than you spend. It's in this phase you want to start building your EMERGENCY fund which is about 3-6 months of monthly expenses saved in a bank account that you will NOT be touching unless its specifically for an Emergency, as the name suggests. This will really help you have a safety net for yourself. It's also in this phase you want to continue to build credit.

Phase 2 - in Phase two you're completely self sufficient, you pay for your living situation, and your goal here is to increase your income whilst finishing off your emergency fund and pay down debt using either the avalanche or snowball methods.

Phase 3 is all about finishing off any debt that you might have, starting with the highest interest rate first, starting to contribute to retirement accounts such as an IRA, 401(k), ROTH IRA, or ROTH 401k. It is also possible that you may qualify for a 403(b). Continuing to keep your expenses low in phase 3 is really important as well.

Phase 4 you should be saving still - pride yourself on your savings. Also you should be building skills, other investments, and saving for bigger goals such as a house or income property.

Phase 5 is a phase that I haven't reached yet. I'm currently still in Phase 4 but I am hoping to get to Phase 5 which is that I will hopefully have big goals out of the way (buying my first home) and then I can work on figuring out how to get a high ROI out of my investments and continue to save and leverage my savings for investments into the future. It's also in this phase that you can really think about giving back. I would try to give back throughout all the Phases, but in Phase 5 you can start to focus on it a bit more.

I hope this video was helpful to you all.

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Disclaimer: I am not a financial advisor, any investment commentary are my opinions only.

[MoRasheed]

😢 I was living in Phase 2 for whole 2018: Living paycheck to paycheck, until I sold my car. I realised it was more of a liability than asset, now I bike everywhere. Great video bro

[pragathesi]

Immediately subscribed after I saw your rice video. Thank you for making these personal finance videos. You rock!

[forbesanderson]

This is such an eloquent, precise guide - top quality content! Can’t wait to see more.

[ambiance]

Love your content on EVERY platform! Keep going!

[gracehuang]

watching this video in 2023--love that you've made videos covering all the topics requested in the comments in 2020 by now!

[hecticnull]

Way better audio, great video. Keep up the great work!!

[aussiedeals]

Loves your rice video showing the gross inequality in the system, no text book or article can really show the magnitude of the problem. Your rice 🍚 video was the best, great work 👍

[anahu]

Terrific video! Thanks for sharing good knowledge👍🏾

[TaylorOwen]

I was one of the 58k people who found your channel from the rice video. Just commenting to say keep up the great work of making these videos. They all have great info and are helpful in this time. My mom taught me all the advice you had for those in your 20s... now that I’m in my 30s I’m doing fine but don’t know shit.

[ctiffany]

Like your video! It’s simple and practical

[cg]

Thanks for this, it really cleared the confusion if I'm going to save for my retirement fund together with my emergency fund.

[matthewdo]

Found your videos on tiktok, I'm going into college next year and am I'm planning to max out my roth ira this year when i turn 18! thanks for the great content!

[richardcastillo]

I appreciate this! Keep up with the great video content!

[thefinancialneurologist]

Love this message! My goal is to retire at age 50, I'm a physician but I don't spend like one, though I do focus on experiences such as eating out and traveling and saving and investing the rest. Reading "Die With Zero" by Bill Perkins really changed my perspective on focusing on splitting my life into time buckets and retiring early.

[jhbballlc]

You’re my super hero 🦸🏾‍♂️ thanks hero

[collyflower]

Giving back should start *way* earlier than Phase 5. We can donate our time through volunteering or our extra materials (clothes, household supplies, etc). Donating money is not just a feel-good action or a tax write-off -- it's an investment in your community and the institutions you value. More financial channels need to be emphasizing this instead of hoarding money for the sake of money.

[PhreshSpice]

Great tips. I just recently bought a new apartment and I am trying to keep track of expenses that I put to improving it. Can you recommend a good system or software to keep track of my expenses, mortgages, etc?

[carltondouge]

A video on different types of investment vehicles such as investing in individual stocks, mutual funds, index funds, Roth IRA, 401k, etc for beginners...

[loopyxhoopy]

I'm in my late 20's and making a decent income to live comfortably but want to start investing in stocks and funds - would be great if you made a video to cover how to start investing in these things as a total beginner!

[moonboons]

For phase 3, which retirement account do you recommend?