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Funnel Money Toward Your Success

Updated: Jan 10, 2023

Chalk this up to things I wish I knew right out of college! I talk to a lot of my friends a few years out of school and I'm shocked by how they have no plan for their savings. This is the absolute best time to save, assuming you have much fewer responsibilities than you will have later in life with a family and house!

This isn't going to be a post where I tell you to never have fun and funnel every cent away.

You need to live your life!

But there are so many ways you can do both. I'm a fan of setting it all up and letting the passive savings roll in. These aren't tips for get rich fast but instead for balanced people that want to grow their savings over time. For now, I'm excluding investment opportunities.

Tip 1: Pay off your full credit card balance monthly

Do not pay interest month over month on credit card debt. Credit cards are fantastic for points and deals but it shouldn't be treated like funny money. If you are paying interest, call this a code red moment and operate in survival mode to get yourself out of that ditch. The average interest rate is b/w 15-18%, that is so much wasted money every month! Consider a friends and family loan to get yourself out of this.

There's no shame - but you can fix this!

Mini story time: When I first graduated college, I paid 4 months of interest on $1,000 of credit card debt and I didn't even realize it! When I came to my senses I was able to borrow the $ and pay it back about a month later. This saved me almost $200 for that one month.

Tip 2: Don't touch your savings account

While some people are great at tracking every burger purchased - this personally stresses me out. My approach is forcing only a personally approved amount into your checking account. Spend it on what you want but when it runs out, don't pull from savings!

An easy way to do this is to split your pay check every month with direct deposit into savings & checking. Find a comfortable spot in which your checking covers little splurges and enjoyable nights as well.

The way I do it:

- $XXXX to checking to cover rent/ food/ shopping

- 10% to ESPP (more to come on this below)

-6% to my Roth 401(k) (more detail below!)

-Remaining to savings account (20% of my pre-tax income)

Tip 3: Set savings milestones.

I'll break these into 2 categories: short term/ emergency and long term

Short term/ Emergency: It's a crazy world right now. What are key expenses you need to cover if you lose your source of income? 6 months of rent/ food/ basic needs is a good place to start. Personally, I am halfway through my MBA program and so I want to have at least 1 year of tuition so I know I can finish up the program. Maybe you have other financial obligations to family, loans, or medical bills - figure out how much makes you comfortable and how long you think it might take you to be back on your feet.

Long term: Once you have enough in your emergency fund, think about your long term goals. I eventually want to buy a house! Or a new car in a couple years.

Ask yourself: How long will it take you to get there?

It's not worth stressing about but it's good to know. If your math says it will take 10 years but you know you'll need a new car in 5 - this is the time to tweak your loose budget and make that amount going into your checking account smaller.

Tip 4: Accelerate savings with promotions & raises

You've finally got your first couple of promotions and are so excited to make more! CONGRATS!

Your next step? Keep your same budget as above.

Don't even touch your paycheck options. It will automatically bump up your ESPP, 401K and savings amounts while never changing the amount in your checking account. As you gain more $, you'll see your savings multiply while you live more and more below your means.

Tip 5: Don't turn down free money!

This includes opt-in credit card discounts & points, and rebate sites like Rakuten.

Opt-in: If you have a credit card with points, check periodically in the app for offers! Just this morning, I saw an offer for 5% cash back at Boudin. All I had to do was check a box and now I'm saving $ on the same sandwich I was going to buy anyways.

Search a little: Places like Nordstrom and other stores offer free price matching. It doesn't hurt to do a quick google while you are waiting in line!

Tip 6: If your company offers - take it!

This may not apply if you don't work in corporate America, but being from Silicon Valley I had to throw these in here:


Almost all major tech companies offer Employee Stock Purchase Plans (ESPP)! They have all kinds of hidden incentives for employees to join like: Stock discounts and price locks

How does this work?

-You elect to put X % of your paycheck in ESPP (if possible put the max!)

-During the period (often 6 months): It funnels money away from your paycheck

-At the end: It automatically buys stock

-The perk: If the stock price is $100 with 15% employee discount, you buy each stock for $85.

If possible, immediately sell the stock and now you've made $15 per stock!

This is a best interest rate you'll find anywhere!


The summary: Put at least enough to get the match & choose Roth option if early career

You may think: I am too young to think about retirement. I need to save for so many other things. You're right - to an extent. Personally, I'm not a huge fan of putting so much in 401(k) while you are saving for a house, paying off loans, etc because it is locked until retirement.

Match: Many large companies offer a 401(K) match. It is something like "50% up to 6% match."

In everyday English: If you put in 6+% of your salary, we'll add another 3%!

There are 2 options for 401(k): Roth vs Traditional

Traditional: You contribute pre-tax. When you take out the money at retirement, you pay the taxes.

But, at this point, you will likely be making more than you do now and have a higher tax rate

Roth: You contribute post-tax money, meaning you pay income tax like you normally would. It is taxed at your current rate which is likely lower than you'll ever have in the future.

You know how I feel about free money! This money will compound over the next 40 years and you'll greatly appreciate it in retirement.

Mini story: One summer I interned in Wealth Management. My team also did 401(k) plans and this time it was for a motorcycle dealership! Not your typical corporate office...

The owners asked us to come talk to their employees because participation was too low, even though they offered a match!

When we talked to the employees, we realized there was a HUGE distrust in the finance/ stock industry and they were worried about the safety of their money.

Our recommendation: Put what you can and if you want to be super conservative, just have it all in a high yield savings account. This option won't ride the market and you'll get the free match. Note: Marcus is a great option (currently at 3.3% as of January 2023)

If you want to be hands off, grab a target market fund and it will adjust your risk profile automatically


All this to say: This is what worked for me and I hope to do more deep dives. A lot of this is catered to a privileged audience that has extra income for savings and has companies that offer generous plans! Many of these tips are passive so once you set them up, you'll reap the benefits and can go live your life!

Any questions?

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