Plan With Minh
Plan With Minh" is your go-to guide for mastering financial planning, personal finance, insurance strategies, estate planning, real estate investing, stock and options trading, and everything in between. Whether you're building wealth or protecting it, Minh brings practical insights and expert tips to help you plan smarter, invest wiser, and live better.
Plan With Minh
Financial Foundations: Building From Zero
Money management shouldn't feel like navigating without a map. Drawing insights from Plan With Minh, we've crafted a practical guide to building your financial foundation from the ground up—no financial jargon required.
Your journey begins with a simple 15-minute exercise: documenting your current financial reality. By capturing your income, expenses, debts, and assets, you establish your starting point. From there, we explore how to set meaningful financial goals across different time horizons—short-term wins to build momentum, mid-term objectives that require sustained effort, and long-term aspirations that shape your financial future. The secret lies in specificity; vague wishes become powerful drivers when transformed into measurable targets.
The heart of your financial plan is the system that connects today's reality with tomorrow's goals. We break down the 50-30-20 budgeting framework, the power of automation, and the security of an emergency fund. You'll discover practical approaches to debt management, investment strategies centered on consistency rather than hype, and the critical protective elements every plan needs—from insurance coverage to basic estate planning. The most empowering revelation? Your financial plan doesn't need to be perfect; it simply needs to exist as a living document that evolves as your life changes. What could your financial future look like five, ten, or twenty years from now if you take control today?
Ready to transform your financial future? Subscribe to our podcast for more practical financial wisdom delivered in language you can actually understand.
Welcome to the Deep Dive. Today we're diving into something that affects pretty much everyone but can feel well a bit daunting building a financial plan from scratch.
Speaker 2:It really can feel like that, like trying to navigate without a map. Sometimes there's just so much information out there.
Speaker 1:Yeah, exactly, and that's what we want to cut through today. We've been looking into the Plan With Min podcast and our mission here is really to pull out a clear, step by step guide.
Speaker 2:Right, a foundational plan. Think of it less like a dense textbook and more like a practical user manual for getting your financial life organized.
Speaker 1:Precisely. We're aiming to skip the heavy financial jargon. The goal is practical steps, things you can actually use to understand and manage your money. If you just want someone to tell you what you need to know, simply.
Speaker 2:Then this is the conversation for you and the logical place to start. Something Plan With Min really emphasizes is figuring out where you are right now financially speaking.
Speaker 1:Makes sense. You need that starting point for any journey, don't you?
Speaker 2:You absolutely do. So. The first step is getting a clear picture of your current situation.
Speaker 1:Okay, so what does that involve Like? What are the key pieces?
Speaker 2:Well, first off your income, specifically what you actually take home after taxes.
Speaker 1:That's your starting number really Got it After tax income and then obviously what's going out each month, right your expenses.
Speaker 2:Exactly Got to track what comes in and what goes out. That's fundamental, but beyond that you need a really clear view of your debt.
Speaker 1:Oh, debt OK.
Speaker 2:Yeah, like, how much do you owe in total and what kind of debt is it? You know credit cards, student loans, maybe a car loan. The type matters a lot because of interest rates.
Speaker 1:High interest versus low interest, and it's not just about what you owe, it's also about what you own your assets.
Speaker 2:Precisely the podcast mentions listing things like cash you have in checking or savings, any retirement accounts, like a 401k maybe, or even other things like crypto or real estate if you have those. So income, expenses, debts, assets get it all down. And what's interesting is the source suggests this doesn't have to take ages maybe just like 15 minutes or so, to jot down these basics, the 15 minutes all down. And what's interesting is the source suggests this doesn't have to take ages, maybe just like 15 minutes or so, to jot down these basics.
Speaker 1:The 15 minutes.
Speaker 2:Yeah, just to create that initial financial baseline. It's like your personal balance sheet, a snapshot of right now.
Speaker 1:OK, I can see how that might feel a bit confronting for some people seeing all the numbers laid out.
Speaker 2:It definitely can be. The numbers might not be what you hope they are, but just taking that step, getting that clarity, that's huge progress.
Speaker 1:Acknowledging the starting point. Ok, so once you've done that, once you know where you stand, what's next?
Speaker 2:Well then you start thinking about the destination. Where do you actually want to go financially? This is all about setting goals clear, realistic goals, right?
Speaker 1:Not just vague wishes and Plan With Min had a useful way of thinking about this, didn't it Like different time frames?
Speaker 2:Yes, exactly A three-tiered approach Short-term goals, mid-term and long-term.
Speaker 1:Okay, so walk us through that Short-term is what like? The next year or so.
Speaker 2:Typically, yeah, about one to three years. Things like building an emergency fund We'll definitely talk more about that or maybe paying off a high interest credit card Things you can tackle relatively quickly.
Speaker 1:Gives you a quick win maybe Builds momentum.
Speaker 2:That's the idea. Then you have midterm goals.
Speaker 1:These are usually in the three to seven year range. Okay, like what Saving for a house down payment?
Speaker 2:That's a classic example. Or maybe saving up to start a small business, things that need a bit more planning and sustained saving.
Speaker 1:Gotcha and the long term ones. That's the big picture stuff.
Speaker 2:Right, seven years or more down the road. Retirement is the big one for most people, obviously, but it could also be, you know, achieving financial independence earlier, or perhaps planning to leave a legacy, requires consistent effort over many years.
Speaker 1:And the podcast really stressed making these goals specific. Wasn't it Measurable?
Speaker 2:Oh, absolutely critical. It's the difference between saying I want to save more money, which is kind of fuzzy.
Speaker 1:Right Versus saying something like I will save $10,000 in the next 12 months for a down payment on a car. Much clearer.
Speaker 2:Exactly that specificity gives you a real target. You know what you're aiming for, you know how to track it. There's that phrase they used.
Speaker 1:Money flows where your focus goes.
Speaker 2:That's the one Clear goals. Give your money direction. They provide that focus.
Speaker 1:Okay, so we know where we are. We have some specific goals. How do we actually connect those two points? How do we make progress?
Speaker 2:Right, that's where the system comes in. The podcast talks about building the engine for your financial plan. It's the set of habits and tools you use.
Speaker 1:The engine. I like that. So what are the key parts of this engine?
Speaker 2:Well, the absolute foundation is budgeting, understanding and planning where your money goes each month.
Speaker 1:OK, budgeting. And they mentioned a specific guideline, the 50-30-20 rule.
Speaker 2:Yeah, it's a really popular starting point. Basically, the idea is you divide your after-tax income roughly like this 50% for your needs.
Speaker 1:Needs. So like rent or mortgage, groceries, utilities, transport, the essential.
Speaker 2:Exactly the must-haves. Then about 30% goes towards wants.
Speaker 1:Wants. Okay, so that's the fun stuff Eating out, hobbies, entertainment, new clothes.
Speaker 2:The non-essentials that make life enjoyable. And, crucially, the remaining 20% is allocated to savings and investments or paying down debt beyond the minimums 50, needs 30, wants 20 savings debt.
Speaker 1:It seems like a decent framework to start with. It's not super rigid.
Speaker 2:No, it's flexible and it acknowledges you need money for essentials and for things you enjoy and for your future goals. It balances things.
Speaker 1:Okay, budgeting is one piece. What else is in this system?
Speaker 2:Automation. This is a really powerful one.
Speaker 1:Ah, setting things up to run automatically.
Speaker 2:You got it. The podcast puts it nicely Automation beats motivation. Set up automatic transfers.
Speaker 1:Like from your checking account to your savings account each payday.
Speaker 2:Exactly, or to your retirement account, like your 401k, or even extra payments towards a specific debt. You make it happen without having to think about it or rely on willpower each time.
Speaker 1:Takes the decision-making friction out of it. I like that Sort of paying yourself first automatically.
Speaker 2:Precisely, it builds consistency. And speaking of consistency and safety nets, another huge part of the system is the emergency fund.
Speaker 1:Right, the buffer for unexpected stuff. Life happens, doesn't it?
Speaker 2:It certainly does. Job loss, medical bills, car trouble, things pop up. An emergency fund is your cushion against that?
Speaker 1:How much should be in there? What's the target?
Speaker 2:The general guideline and what the podcast recommended is aiming for three to six months worth of your essential living expenses.
Speaker 1:Three to six months of needs? Yeah, okay. And where should you keep that? Not just in your regular checking account, I assume.
Speaker 2:Ideally no. You want it somewhere safe and accessible, but maybe not too easy to dip into. For non-emergencies, A high-yield savings account is often recommended.
Speaker 1:High yield, so it earns a little bit more interest than a standard savings account.
Speaker 2:That's right Still safe, still accessible, but working slightly harder for you. It gives you peace of mind knowing you can handle a financial shock without wrecking your long-term plans.
Speaker 1:Okay, makes sense. Budget automate emergency fund. What about the debt piece again, how does that fit into the system?
Speaker 2:Managing debt effectively is key. The podcast mentioned one popular strategy the debt avalanche.
Speaker 1:Debt avalanche Sounds intense. How does it work?
Speaker 2:It's actually quite logical you keep making the minimum payments on all your debts, but any extra money you can put towards debt, you throw it all at the debt with the highest interest rate first.
Speaker 1:Ah, ok, targeting the most expensive debt.
Speaker 2:Exactly Because mathematically, that saves you the most money on interest over time. Once that high interest debt is gone, you take all the money you were paying on it, minimum plus extra and attack the debt with the next highest interest rate.
Speaker 1:So it creates a well, an avalanche effect as you pay things off.
Speaker 2:That's the idea, but you know, the podcast also made a really good point. While the avalanche method might save the most interest, the best method is the one you'll actually stick with.
Speaker 1:Right. Consistency over perfection maybe.
Speaker 2:Absolutely. Some people prefer the debt snowball method, paying off the smallest balances first for quick psychological wins. If that keeps you motivated, great. The key is making consistent progress.
Speaker 1:Got it. So build the system budget, automate savings, build that emergency cushion and have a consistent plan for tackling debt.
Speaker 2:That's the engine. Once that's running, you can really start focusing more on the longer-term picture, growing and protecting your wealth.
Speaker 1:Okay, moving beyond just getting organized into building for the future. So investing comes into play here.
Speaker 2:Definitely, investing is really the primary way to grow your wealth significantly over the long term, outpacing inflation.
Speaker 1:But investing can feel complicated, especially for beginners. Where does someone even start? The podcast mentioned index funds.
Speaker 2:Yeah, index funds are often recommended as a good starting point. They're basically baskets of stocks or bonds designed to mimic a whole market index like the S&P 500.
Speaker 1:So you're not picking individual stocks, you're buying a piece of the whole market, essentially.
Speaker 2:Pretty much. That gives you instant diversification which spreads out your risk. Plus, they usually have really low fees compared to funds where managers are actively picking stocks.
Speaker 1:Lower risk, lower fees, easy diversification Sounds like a solid start.
Speaker 2:It can be and the key advice echoing the podcast is about mindset. Don't chase hype, chase consistency, think long term.
Speaker 1:Right. Avoid jumping on the latest hot trend. Maybe something like dollar cost averaging fits here.
Speaker 2:That's a great strategy to pair with index funds, Investing a set amount regularly, say every month, regardless of whether the market is up or down. It averages out your purchase price over time.
Speaker 1:OK, steady, consistent investing. What about retirement specifically? That's a huge long-term goal.
Speaker 2:Absolutely crucial, and the podcast really hammered home the importance of the 401k match if your employer offers one.
Speaker 1:The employer match. That's basically free money, right.
Speaker 2:It is. If your company matches say 50 cents for every dollar, you contribute up to 6% of your salary. You should try your absolute best to contribute at least that 6% to get the full match. It's an immediate return on your investment.
Speaker 1:Hard to be free money. What if you don't have a fair own care? There's no match.
Speaker 2:Then you look at other options like IRAs, individual retirement accounts. There are traditional IRAs where contributions might be tax deductible now, and Roth IRAs, where contributions aren't deductible but qualified withdrawals in retirement are tax free. Both are great tools for building that nest egg.
Speaker 1:So investing for growth, planning for retirement. But we also need to protect what we're building right Insurance.
Speaker 2:Yes, Not the most exciting topic maybe, but so important. Insurance is your financial defense.
Speaker 1:What kinds are we talking about? Health insurance, obviously.
Speaker 2:Critical. A major medical issue can be financially devastating without it. Then there's life insurance, especially if you have dependents who rely on your income.
Speaker 1:To provide for them if something happens to you.
Speaker 2:Okay, Disability insurance is another big one. It replaces some of your income if you get sick or injured and can't work for an extended period. Often overlooked but vital.
Speaker 1:Protects your earning ability and liability insurance.
Speaker 2:Yeah, things like homeowners or renter's insurance, auto insurance they usually include liability coverage Protects you if you're found legally responsible for injury or damage to someone else. These policies shield your assets and your plan.
Speaker 1:So insurance is the shield. Got it, yeah? And one last piece mentioned was estate planning. Seems like something for much later in life, maybe.
Speaker 2:You'd think so, but the podcast made a good point that basic estate planning is valuable even when you're younger.
Speaker 1:Really Like what.
Speaker 2:Even just having a simple will. It makes sure your assets go where you want them to go if something happens, and checking your beneficiaries.
Speaker 1:Beneficiaries yeah, oh, like on your retirement accounts or life insurance.
Speaker 2:Exactly Making sure those are up to date is crucial. It often overrides what's in a will for those specific accounts and can make transferring assets much, much smoother for your loved ones, avoids potential headaches and legal issues.
Speaker 1:Okay, so even basic estate planning. A will updated beneficiaries provides important clarity.
Speaker 2:It really does. It ties everything together, protecting the legacy you're building.
Speaker 1:Wow, okay, so let's try and wrap this all up. We've covered a lot in this deep dive. Drawing from playing with mints. It feels like a really solid roadmap.
Speaker 2:I think so. It starts with that crucial first step Know your numbers. Understand your income, expenses, debts, assets. Get that baseline Right.
Speaker 1:Then set real goals Short, medium, long term. Make them specific and measurable, so you know what you're aiming for.
Speaker 2:Mm-hmm. Then build the system that engine Budgeting, maybe using the 50-30-20 rule as a guide, automating your savings and debt payments.
Speaker 1:Don't forget the emergency fund, that three-six-month cushion in the safe place and having a consistent strategy for managing debt, like the avalanche method, exactly.
Speaker 2:And, once that foundation is solid, focus on growing and protecting, investing smartly, maybe starting with index funds, thinking long-term, planning for retirement, taking advantage of matches.
Speaker 1:And shielding it all with the right insurance health, life, disability, liability, plus those basic estate planning steps like a will and beneficiaries.
Speaker 2:And you know, a key takeaway is that this first plan doesn't need to be perfect. It just needs to be functional, something you can actually start using.
Speaker 1:That's a relief. It's not set in stone.
Speaker 2:Not at all. Life changes right. Your income changes, your goals might shift, so you need to revisit your plan regularly, maybe once a year or when something major happens, and adjust it. It's a living document.
Speaker 1:A dynamic process, not a one and done task. That makes sense. So, as we finish up, maybe a final thought for our listeners to chew on.
Speaker 2:Sure, think about this If you start applying these principles consistently, knowing your numbers, setting goals, building that system, growing and protecting, even starting small, how could that truly change your financial future?
Speaker 1:Yeah, what does that future look like 5, 10, 20 years down the line if you're proactive now, it's about building that long-term security and freedom, isn't it?
Speaker 2:It really is. It's about taking control today for a better tomorrow.