Make sure to check out the full post below!
(Additional breakdowns coming in future posts)
In Part 1, we talked about why parking money in a brick-and-mortar bank keeps you stuck in the wrong mindset — money sitting idle isn’t your employee, it’s just dormant cash waiting to be spent. Financial freedom starts when you make money work for you.
By now, you should be looking at better savings options, like a high-yield savings account or a money market account. For reference:
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Vanguard Money Market Account: earning around 4% interest
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PNC Standard Savings: earning just 0.01%
Enough said.
Now it’s time to get brutally honest about debt and income.
Debt: Facing It Head-On
Dave Ramsey’s Total Money Makeover ( 👈 Click the link!) lays out the “Debt Snowball” strategy, which we’ll touch on in the next step. But for now, while you’re building your $1,000 cushion, start gathering your numbers.
This can take time. You may have to dig. I’ll give you an example: when I was in my early 20s, I had $3–4k in an old 401k I’d completely forgotten about. Years later, when I actually looked into it, it had grown to nearly $18k. That’s the power of compound interest.
👉 What to include as debt: credit cards, personal loans, student loans, anything you are making a payment to.
👉 What NOT to include right now: mortgage (and in my opinion, car payments if your rate is under 5%).
Why? Because in today’s world, dependable used cars that last 10+ years without repairs are rare. If you have a decent rate, the market is still averaging 8%, so technically you’re making money. That said, if you’re driving something you can’t afford (like buying a Corvette on $45k income with no assets), that’s not debt management — that’s self-sabotage. To Dave's point, don't live outside of your means and do research to find a vehicle that you can EASILY afford. Time matters as well. If you have a 7 year loan, that is one to tackle and you should consider that debt.
📌 Personal note: When I bought my truck (who now is called Rusty), I rolled $14k in negative equity into the loan. That was bad debt. We tackled it, paid it off, and now I plan to drive Rusty until the wheels fall off.
Practical Steps:
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Write down every debt, smallest to largest (Ramsey’s snowball method).
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If you and your partner are visual people, grab a budget planner and track your habits. 👈Click the link!
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If you carry credit card balances, consider lowering your credit limit. I love using one credit card for all bills (safer than debit cards), but keeping the limit low reduces “just browsing” temptation.
💡 Mindset check: Shopping must have a purpose. Otherwise, it’s a financial leak.
Also — check your subscriptions. You’d be surprised how many “zombie charges” quietly drain your money each month.
Income: Your Real Starting Line
Log your base pay only. If you’re on commission, do not average it. Bonuses and commissions are unpredictable, and depending on them is one of the fastest ways people fall back on credit cards.
Yes, this makes your budget feel tighter. But here’s the upside: when you stop spending bonuses and base everything on guaranteed income, your emergency fund, debt payoff, and later investments will accelerate much faster.
I know this from experience. As someone on commission myself, it wasn’t easy to track — but once I did, I was shocked at how much waste disappeared.
And to my friends who say, “I only make $X, so I can’t save anything,” — I hear you. But that’s a mindset problem we’ll tackle in a future post. For now, just get the real numbers on paper: income vs. debt.
✨ This is not a net worth check — don’t include equity or asset values. Focus only on the income that comes directly to you.
✨ If an asset generates income that’s automatically reinvested, or if you keep rental/property income separate for repairs or reinvestment, leave it out for now. Think of it as a future bonus to yourself.
The Real Work
Step 0 isn’t glamorous. It’s not even fun. It might take 1–3 months of tracking before you have a clear picture. But once you do, you’ll:
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See habits and behaviors clearly.
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Find waste you didn’t even realize was draining you.
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Get ready to fund that first $1,000 emergency cushion.
Focus this week: Identify 5–10 financial habits you and your partner consider “waste.”
⚠️ Side note: date night is not waste if it’s planned and budgeted. Going out for dinner once a week, or bowling, or cocktails with friends — those are healthy and important. Waste is when you stack that with DoorDash, Chipotle, and another pair of Nike's (my wife) even though you have 5 others... “just because.”
Next Step
Congratulations — you’ve done the hard part. You’ve opened a high-yield savings or money market account, tracked your income, mapped your debt, and faced some tough truths. Now comes the most rewarding part: building that first $1,000 emergency fund — your financial buffer against life’s curveballs.
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