Every week, we ask our personal finance experts at Policygenius (and beyond) for their money pro tips. They spend all day helping people with money, so we figured they could share the wealth (PUN INTENDED). Want a sneak peak? Sign up for the Easy Money newsletter to see their answers ahead of time. Plus, you'll get a weekly dose of financial advice.
This week's expert is Carlos Oyaga, licensed adviser for Policygenius.
How do you budget? I keep a spreadsheet that lists itemized cashflow for each month of the calendar year. Focus is to keep housing costs under 25%, maintain a similar lifestyle even after windfalls and raises, and save and invest the surplus. In the coming years I am aiming to achieve the savings rate exercised by FIRE (financially independent, retire early) proponents.
Last thing you resisted buying: A pair of $20+ Smartwool socks
How did you resist it? Shopping with my wife helped — we keep each other accountable on our finances!
Last thing you splurged on: Our third anniversary dinner
Why’d you OK the splurge? We are really into food and this restaurant was featured on Netflix's Chef’s Table — we thought it’d be OK to splurge on a special once-per-year celebration
Current money goal: Saving for a down payment on a home
How you’re working toward it: We have a target date for when we want to buy, and we want have min. 20% downpayment to avoid PMI (private mortgage insurance), plus 3% for closing and moving costs. So we came up with a monthly savings goal and are ‘paying ourselves first’ each month so we can have the funds available by our target date
Money book, podcast, or blog you recommend: Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns by John C. Bogle, the founder of Vanguard Group and creator of the index fund
Most common money advice people want from you: “How do you tackle debt?”
What you tell them: Avalanche method — make at least minimum payments on all your debts, and accelerate payments towards the note with the highest APR
Money thing you’re most proud of: Most recently, we paid off one of my wife’s student loans with the highest APR and have funded our emergency savings fund with 6 months worth of monthly expenses (That's huge! Congratulations! — ed.)
Best financial advice your ever got: Financial planning is a simple concept, don’t spend more than you earn, have clear goals and a roadmap on how to get there, and stick with your plan. Additionally, it is important to have asset allocation and diversification strategies, or more simply put, don’t put all your eggs in the same basket
Worst financial advice you ever got: Put all your money in cryptocurrencies!
#1 money tip you give to people: Be aware of your finances, spend a few minutes per week analyzing your budget, and create a financial plan to achieve your goals
What would you do with a $1M windfall? Sleep on it, wake up the next morning and make sure the $1M is real. Then would pay outstanding debts, plan trips, maxout my savings account with the FDIC limit, buy two investment properties, donate to an organization that our family supports, and invest the rest in index funds.
Image: Nastia Kobzarenko