Summary:

In this episode of Personal Finance Cat, we explore the popular and beginner-friendly 50/30/20 budgeting rule, a simple framework for managing your money without stress or spreadsheets. Originating from Elizabeth Warren’s book All Your Worth, the method divides your after-tax income into three categories: 50% for Needs (essentials like rent, groceries, and insurance), 30% for Wants (non-essentials like dining out and entertainment), and 20% for Savings and Debt Repayment (retirement, emergency funds, and paying off extra debt).

I explain how to apply this rule using a $4,000 monthly income as an example, showing how it breaks down into $2,000 for needs, $1,200 for wants, and $800 for savings and debt. You are encouraged to track your own spending and plug your numbers into this model for insight.

Final takeaway: While the 50/30/20 rule is a great starting point, personal finance should be tailored to individual goals. The key is spending with intention.

Summary:

This episode offers a practical guide for millennials looking to build wealth through investing. Here are some key points to consider:

1. Understand the Basics of Investing

Before we dive in, it’s important that we understand the fundamentals. Investing means putting our money into assets like stocks, bonds, or real estate with the goal of growing our wealth over time. We should also get familiar with key concepts like diversification, asset allocation, and risk tolerance to make informed decisions.

2. Set Clear Financial Goals

We need to define what we’re investing for. Whether it’s a home, retirement, or a big life event, setting clear goals helps us choose the right investment strategy. Typically, short-term goals call for safer investments, while long-term goals can take on more risk for greater potential returns.

3. Start Early, No Matter How Small

Time is our biggest advantage. Even if we can only invest $50 a month, starting early allows our money to grow significantly thanks to compound interest. We should consider opening a brokerage or retirement account and set up automatic contributions to stay consistent.

4. Educate Ourselves on Investment Options

We have several investment paths to explore:

- Stocks offer potential for long-term growth

- Bonds provide more stability and fixed income

- Mutual funds & ETFs give us diversification with less effort

- Real estate can be a solid option for those interested in property

5. Keep an Eye on Fees

We should be mindful of investment fees, as they can quietly reduce our returns over time. Looking for low-cost index funds or ETFs and comparing platforms will help us minimize expenses and stay aligned with our financial goals.

6. Stay Informed and Adjust Our Strategy

Since life and the market are always changing, we should stay informed and revisit our investment strategy regularly—at least once a year. Adjusting based on new goals or circumstances keeps us on the right track.

7. Avoid Emotional Decisions

It’s easy to react emotionally during market dips, but we need to remember that investing is a long-term journey. By sticking to our plan and avoiding panic, we’re more likely to reach our financial goals.

Summary:

In this episode, I discuss how parents can set up an IRA for their children to give them a significant financial head start. While IRAs are typically seen as tools for adults, kids with earned income are eligible to contribute, making it possible to benefit from decades of compounding growth. A Roth IRA is usually the best choice for kids because contributions are taxed upfront—ideal since children typically have little to no tax liability.

Parents can open a Custodial Roth IRA on behalf of their child using their Social Security Number and by choosing a brokerage like Fidelity or Vanguard. Eligible earned income includes jobs like babysitting, lawn mowing, or working in a family business—with proper documentation.

In 2025, kids can contribute up to $7,000 or the total amount of their earned income, whichever is less. Contributions don’t need to come directly from the child—relatives can match the amount earned. Once funded, it's best to invest in long-term growth options like index funds or blue-chip stocks.

By starting early, even modest contributions can grow into substantial savings by retirement. This strategy not only builds wealth but teaches kids lifelong financial skills.