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Summary

In short, personal finance is how you align Your Money With The Life You Want To Live. This can be as simple as seven steps

Money is the root of all evil
Money is the means to an end
We tell ourselves stories about money because have a hard time connecting the tangible with the financial
Think of money a different way: Money is Your Life Energy
You trade an hour or a month of your life for an hourly wage or a salary
You are never getting that time back. It is gone forever.
If you make $15 anh o u r an d s p e n d$ 30 on lunch, you just spent 2 hours of your life working for that lunch
Money is what you get in exchange for the precious hours of your life. Spend it Wisely.

To get smart about your finances, you need to figure out what you’re working with
Start with your assets
This is anything you own that has monetary value
On a spreadsheet, make two columns - put the asset name in one and the dollar value in the other
This could be the money in your bank accounts, under your mattress, investment, and anything you could resell for some money, like a car
Be honest about what you could sell things for
Now we’ll lay out your liabilities
This is money or goods you’ve borrowed
Write these down in two columns
List all debt - like credit cards, student loans and money you owe your parents
Total up both sections
Take your total assets minus your total liabilities and you have your Net Worth
There’s a good chance the number will be negative
There’s no shame to be had here
We want to work on getting that number positive over time
The most important thing is to set a baseline and we’ll go from there

Budgeting is actually two things
- goal setting for the next month and the future
- tracking progress towards these goals
For many, budgeting monthly is a good cadence
There’s many ways to do it, here’s an easy one to get you started
In another tab of your spreadsheet, make a column with all your spending categories
These are things like:
- Rent
- Utilities
- Groceries
- Transport
- Monthly minimum debt payments
Use your previous month’s activity as a guide to customize this for yourself
It’s OK if you miss things initially, just course correct at the end of your first month. No shame
Track every dollar that goes out
In a separate chart, track your total monthly income, total monthly spend, and what the variance is
If it’s positive, that means you’re saving money that month
If it’s negative that means you’re losing money or taking on debt
Even if your net worth is negative, you need your monthly balance to be positive
If it’s negative, trim expenses or increase earnings until it is
this will give you positive cash flow that you can improve over time
Work to make more than your spend, even by $10 to start

Once you’ve confirmed you have enough cash flow to support your present, you can start saving for your future
In your budget, allocate money for your savings goals before you allocate towards other expenses
This is called ‘paying yourself first’ and is more psychologically effective than simply saving after the fact
Here is a sample idea of what to save for:
- An emergency fund for 1 month of your usual expenses
- Repay high interest debt (10% or higher) i.e. credit cards - don’t carry a balance at all costs
- If your employer has a matching pension fund, increase your contributions to the max that will be matched and no more. This is free money
- Increase emergency fund to 3-6 months
Do not invest your emergency fund
It should be liquid so you can use it whenever you need it

Increasing your savings gives you psychological and financial safety to start taking calculated risks in hope of greater rewards
This shouldn’t be stress inducing
low risk is better than no risk and high risk. the sweet spot
Investment could be in this order:
- Education/Skills - best upside for $s p e n t - i . e .$ 200 photoshop course gives you a baseline marketable skill that you can improve for life
- Meaningful experiences (growth travel) - do anything but go sit at a resort. Go somewhere foreign to you and talk to people
- Mid-Term Expenses - i.e. car or expected increase in rent from moving out
- Index Funds - buy cheap, diversified ones

Eventually you’ll be in a solid enough financial footing to start accelerating your financial investing
Here are some laws of the investing universe to help you aong
- time and compound growth will win. Period
- minimize risk instead of maximizing losses
- diversification is key to lowering risk
Index funds obey these laws
They are a low mtc path towards passive income and financial independence
Here are some tips to help you get there:
- 1.Max out tax sheltered investments:
  - 1.TFSA
  - 2.RRSP
  - 3.Company Pension

^All have their unique uses
Buy the haystack, not the needle
1. 1. Most can’t beat the market over time
2. 2. Avoid fees at all costs
3. 3. Don’t get upsold
4. 4. Get comfortable self-managing