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KO's Big 3 (Start here)

Updated: Dec 12, 2021

Disclaimer: Although my degree is in Financial Planning, I am not a financial advisor, accountant, attorney, or tax advisor. These blogs are for informational use and all advice is based on my personal research, my experiences, and my opinions. You have to do your own research and I do not take responsibility for any losses that come with my advice. Everyone has unique circumstances and consulting a professional is always the best option.

First things first, I want to clarify everyone's expectations and my intentions with this blog. This Money Series is not going to present any brand new, revolutionary information. I'm sharing information and advice to help educate the everyday person so that you are able to make wise decisions when it comes to your money. I will also try to use basic language so that my writing can be easily understood, but please comment down below if there are any terms I use that don't make sense, there is no such thing as a stupid question :) Another FYI, most of this advice will apply to people who have discretionary income (extra money to spend after your necessary expenses). If you don’t have extra income, it’s hard to implement my recommendations because there's not much room for change and adjustments to your spending.

Before we get into more specific money topics there are three things you need to set straight: Budget, Emergency Fund, and High Interest Debt.


Budgeting, budgeting, budgeting… everyone hears about it, few people actually do it. Why? Maybe because we’re lazy, maybe because we don’t actually want to know where our money is going, or maybe because we don’t want to take the time to do it. Whatever your reason is, I believe that before you do anything else with your money you’re gonna need to set a budget. It is not a recommendation it is a requirement lol, you need to know where your money is going. If you decide you don’t want to budget that’s your choice, but I don’t see how you will achieve the other steps without making sure you have enough money to do it.

Where do I start?

The #1 way people go wrong with budgeting is they set a budget WITHOUT looking at how much they are currently spending. This is the most time consuming part of the process, but it is important.

Step 1: Open the bank statement that represents most of your spending.

Step 2: Add up how much you are spending in each area: Rent/Mortgage, Utilities, Groceries, Dining Out, Entertainment, Shopping, etc.

Step 3 (Optional): For extra credit, go do this again for multiple monthly bank statements.

Step 4: THEN, you form the budget from those numbers you added up in step 2.

Step 5: Ask yourself, "Am I spending more than am I making?" If the answer is yes, that needs to be cleared up ASAP! Lower all that unnecessary spending and go freeze your credit card lol.

Most people when building a budget say, “I would love to spend $100 at Amazon every month”, BUT in reality they have spent $300 at Amazon for the past 6 months. They are somehow expecting themselves to magically start spending $100 every month, a $200 decrease. In my opinion, that goal is UNREALISTIC. Instead, look at your average spending and budget around that. For example, if you currently spend about $150 every month on clothes, you can make a goal of only spending $125/month. A $25 reduction is much more doable than trying to tackle your spending all at once. Smaller is better at first.

So for anyone reading this, I want you to open your calendar app right now, and schedule the time and day that you will create the budget. You gotta take the first step! (I am challenging you because I care about you and your money lol.)

Once you form the budget, you now have to track your expenses as you spend. This is the other part people hate. This step is all about discipline. Some banks categorize your spending for you, but their categories aren’t usually accurate so it’s best if you do it yourself. I used to use the app EveryDollar and before that Spendee, but I now pay for the app YNAB. I would recommend Mint, EveryDollar, or Spendee if you're just getting started, it takes 5 seconds to track an expense after you swipe your card. The Mint app automatically records transactions from your bank, but it can be confusing. Some people choose to use excel but the way I operate is if I don’t get it done now, I probably won’t remember to do it later and if I do remember, I won’t want to do it later. The decision is up to you, just make sure you choose what you're most likely to stick with, something quick and easy. Now that you have a budget, you know exactly where your money is going and can decide how much is available to go towards savings, debt, etc. DM me if you need help, forreal!!

Pro Tip: Budgeting can be hard in our “treat yo' self” and high-consumption culture as Americans, but being grateful for what you already have is also great. There will always be more and more and more to buy to keep up with everyone else. Ask yourself “Do I really need this?” and “Will I really use this?” before just swiping your card. Practice self control :)

Emergency Fund

The second important thing to do with your money is build an emergency fund. You think anyone knew COVID-19 was about to happen? No, you know why? Because life is unpredictable. Since life is unpredictable, you set aside an emergency fund. Emergency funds are for anything from losing your job to car expenses, house expenses, and anything unpredictable that costs a lot of money. You don’t want to rely on your credit card for these random large costs because credit cards are expensive. I recommend keeping at least 3 MONTHS OF LIVING EXPENSES in your emergency fund.

Example: Let’s say your rent, car payment, phone bill, utilities, groceries, etc. for the month total $3000, you should have 3 months x $3,000 = $9,000 saved up. If you want to go above and beyond you can save 6 months of living expenses, which would be $18,000. The decision of the amount of living expenses to put in your savings account is up to you; if you have very stable income you can choose to save closer to 3 months rather than 6 months. If you like to be safe, you can set aside 6 months. BUT if you have high interest debt (I consider high interest debt to be debt with interest rates higher than 10% AKA credit cards or certain types of loans), it may be better to just save up 1 month of living expenses (explained more in the next section).

Pro Tip: It’s very important that you DON’T put your emergency fund into the stock market or other investments that do not allow you to access it easily or may result in losses. You need to have this money available ASAP when you need it. I recommend putting your fund into a savings account separate from your primary account because you won't regularly be spending it. Major banks like Wells Fargo, Chase, Bank of America, etc. barely pay you any interest for keeping all your money saved in their banks. This is why I keep my emergency fund at Barclays Online Bank. Barclays was paying me as high as 2.20% last year, but ever since COVID, rates have significantly dropped and my savings rate is now .60%.😞 Other savings accounts that offer great interest rates include Ally or Synchrony Bank. When you choose your bank, make sure you pay attention to the minimum deposit requirement, minimum balance required, monthly maintenance fees, and withdrawal limits. Always focus on no minimums and no maintenance fees. Ally, Barclay's & Synchrony all require $0 to open an account and have no minimum balance requirement (as of Oct 2020). They do have a limit on withdrawals (6 withdrawals per statement), but this is standard with most savings accounts. To me, it seems like all 3 are pretty similar. Personally, I have had no issues with Barclays to this day.

Example of Online Savings: I put my $9,000 emergency fund in a Barclays savings account. Barclays pays me .60% interest which is $54 for the year. $54 doesn’t seem like much, but if you kept that same $9,000 in your normal WF, Chase, etc. bank you would only earn less than $1. Since the money is just sitting there, it’s definitely worth putting it into an online savings account. Remember this is also the lowest it has been for Barclay's, in a year with a 2.20% interest rate you would earn almost $200.

How do I save up that much money?

I recommend automating money to move into your savings account the day after you get paid. Don’t wait until later on in the month; because after all the bills and spending is out of your account, saving is the last thing you will want to do. Since you have made that budget you have already decided EXACTLY how much is going into your savings. BUT as I mentioned before if you have high interest debt (discussed in the next section) this may not be the best option for you. So for y’all who have no emergency fund, go ahead and open a new tab right now, and automate a portion of your money to go into savings every month. If you can't do it right now, open up your calendar and schedule a day that you will set it up. You can start with as little as $50/month if you feel uncomfortable and slowly increase it over time. Reading this blog is great, but taking actual action is better.

Pay off High Interest Debt

As I mentioned above, people with high interest debt should only save up 1 or 2 months of living expenses for their emergency fund. I consider debt with interest rates above 10% to be high-interest debt, but this is just my definition, there is no specific number that is used widely. Although it seems like a smart idea to finish paying off that credit card before saving any money… emergencies happen any time any day, and you don’t want to have to add more expenses onto your credit card because you still don't have an emergency fund. So yes, everyone should have SOMETHING in their emergency fund, even if you are trying to pay off your credit card.

The reason that it is smarter to pay off this debt rather than save up money or invest it is because that debt you are holding onto is extremely expensive. The stock market on average earns you 10%, your savings account can earn you 1%, but your credit card might be charging you around 20%.

Comparison: You continue to put money into your savings despite owing on your credit card. This is like your mom giving you $20 every week (yay!), but then also having to pay your dad $40 every week. What really happened? You lost $20.

So take the budget that you created and budget most of your extra income to go to paying off that credit card. The banks want to keep you in debt because they can get rich off of you. Once you get your bill down to $0, then it is time to focus on saving, investing, or your other goals. After paying off your debt, make sure to remember to save up at least 3 months of living expenses. (Most student loans are not above 10% btw so check yours to make sure but student loans will be discussed in a separate blog.)

Pro Tip: People don’t ever say this, but paying off debt is an investment! Don’t go out trying to invest your money if you have a credit card bill of $2,000 with an interest rate of 20%. 99.9% of the time, the investments that you go and find aren’t returning 20%. Yes, they exist, but they are rare, risky, and hard to find. Do yourself a favor and pay off your entire credit card bill, every month, forever.

This was the introduction to the Money Series, but I know there were probably some confusing things mentioned or things that I didn't explain well so pleaseeee comment down below with any questions you have! You can also DM me on IG if you prefer that. I really want people to be empowered to make financial decisions that you want and understand rather than being confused by financial jargon that banks and other professionals like to use to trap you.

*This is your reminder to create a budget and automate money into your savings account to build up an emergency fund.

Share this with ya friends and let me know what other money topics you want to hear about!

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